In making Ohio University’s “OHIO Guarantee” over the past two years, OU officials sought at the advice of other schools around the country to create what they believe is a one-of-a-kind program.
From early proposals to Ohio University’s Student Senate in late 2012 to approval by Ohio’s Board of Regents in April, guaranteed tuition has been on the lips of OU officials for awhile.
Set to launch in Fall Semester 2015, the new tuition plan, called the “OHIO Guarantee,” will be the first of its kind for OU and possibly the rest of the country, according to university administrators.
“We haven’t found another public institution that’s doing (exactly) this at all,” said Craig Cornell, vice provost for enrollment management. “We think we’re going to be leading the pack.”
How guaranteed tuition affects OU’s funding
In a Post article from 2012, Executive Vice President and Provost Pam Benoit said that guaranteed tuition had failed at other universities because of an underestimation in expenses.
The university’s program promises students a fixed bill for four years, encompassing tuition, housing, dining and fees.
Under the guarantee, the university is essentially able to control only 25 percent of its revenue from tuition, or only one cohort at a time; the other 75 percent, which under the current tuition model would change with a tuition increase, would remain stable.
This possible deficit in revenue from tuition can be remedied by raising the incoming cohort’s tuition. The maximum amount tuition can be raised from year-to-year is currently two percent added to the current rate of inflation, totaling four percent.
“You have a decision every year as to what the next freshman cohort (tuition rate) will be,” said John Day, associate dean of academic affairs and associate provost for academic budget.
In the case that increasing tuition is not enough though, officials can look to other sources of to increase capital — primarily by cutting costs or dipping into the university’s internal “reserves.”
OU officials were not able to say how much money is currently in “reserves” by press time.
“We do have millions of dollars that are sitting on our balance sheet, but it’s not really appropriate to say that we should just spend those reserves,” said Chad Mitchell, OU’s budget director. Using those reserves would only be a solution for short term problems.
To compensate for a possible loss in its biggest revenue source, the university may have to rely more heavily on other forms of funding.
Since 2012, Ohio’s public universities have been funded by the state based on the number of degrees granted.
OU officials believe guaranteed tuition could push graduation rates up, netting the university more state dollars.
As of 2009, the most recent data available, OU’s graduation rate was 48 percent — lower than the state average of 54.7 percent and the national average at 55.5 percent, according to the National Center for Higher Education Management Systems.
“You put out more degrees … then you get more funding,” Day said.
Where does the plan come from?
Approximately 320 schools in the United States offered a fixed-rate tuition plan in the 2012-13 academic year, according to the National Association of Student Financial Aid Administrators.
Of the institutions with such programs, OU officials looked toward both the University of Colorado Boulder, a public school, and nearby University of Dayton, a private school, when considering how to construct their own tuition model.
Stephen Golding, vice president for finance and administration, worked at the University of Colorado Boulder in the mid-2000s.
While there, he assisted in the early developmental stages of what Colorado calls their “four-year tuition guarantee” with then Senior Vice Chancellor and Chief Financial Officer Richard Porreca.
Golding said that he used his connection with Porreca and other administrators at Colorado to help fine tune OU’s fixed-tuition program. This included tips for communicating the program to the Board of Regents and, later on, to students.
Unlike OU’s plan, Colorado’s tuition program only applies to out-of-state students, but Golding says his conversations with administrators were “very helpful” during the crafting of OU’s plan.
Colorado has seen an increase in graduation rates from 41 percent in 2004 to 47 percent in 2009, the most recent available.
Cornell admitted that officials also looked toward a private institution, the University of Dayton, which implemented what they call a “flat tuition” program nearly a year ago.
“The parents are the ones that have even greater appreciation for (fixed tuition),” said Robert Durkle, assistant vice president for enrollment management at Dayton.
“I haven’t seen in my time the kind of comprehensive program that we are proposing at Ohio University,” Golding said.
Varying opinions
Some members of OU’s Student Senate don’t favor the guaranteed tuition plan.
“While it may help the more privileged families within our university by providing some ‘financial predictability’, this program does little to solve the increasingly dire issue of student debt,” said Student Senate President Megan Marzec.
Conversely, students in Miami University’s Student Senate have recently expressed interest in a fixed-rate tuition plan, even passing a resolution in favor of one last year.
“The plan was regarded as pretty positive by students,” said Student Body President Cole Tyman. “There was not a large university-wide conversation, but most engaged students were in support.”
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