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U of I recommends 1.7 percent tuition increase

January 13, 2014

Online Staff Report

CHICAGO — For the second straight year, the University of Illinois has proposed a 1.7 percent tuition increase for incoming freshmen next fall that tracks with the rate of inflation and matches the smallest increase in nearly two decades.

The tuition proposal, along with recommended increases in student fees and housing, will be reviewed Monday by the Board of Trustees’ Audit, Budget, Finance and Facilities Committee, and then will go to the full board at its Jan. 23 meeting in Chicago.

If approved, guaranteed four-year tuition for incoming in-state freshmen would increase 1.7 percent again next fall — or the equivalent of 0.7 percent per year during the four years that rates are locked in under the state’s guaranteed tuition law. The tuition guarantee was launched in 2004 to help students and families plan for the cost of a public university education by fixing tuition rates for the four years required to complete most undergraduate degree programs.

The increase was recommended under an inflation-neutral tuition-setting policy enacted by the board in 2011 that aims to hold down student costs by limiting increases to cost-of-living indexes or below, barring significant reductions in state funding or other university support. The proposed 1.7 percent increase is in line with indices and projections for inflation.

The tuition recommendation matches the increase for incoming freshmen last fall — the smallest percentage increase since 1994 — and would increase tuition by about $200 a year or less on each of the university’s three campuses. A report was presented to the committee on proposed increases in tuition, fees and housing.

Tuition increases at the U of I have been trending downward. Following a 9.5 percent increase for 2010-11, tuition rose 6.9 percent for 2011-12, 4.8 percent for 2012-13, and 1.7 percent for 2013-14. All of those rates were locked in for four years under the guaranteed tuition law.

President Robert Easter said the proposal reflects the university’s commitment to student affordability, while maintaining the high-quality academic programs that make the U of I one of the world’s premier public research universities.

He said the university has been able to hold down student costs through ongoing cost-containment initiatives and ramped-up fund-raising efforts that netted nearly $435 million in gifts, grants, pledges and deferred commitments in fiscal 2013, a new record and up nearly 40 percent from the year before.

“Affordability is a cornerstone of our land-grant mission, providing the opportunity that helps every deserving student unlock their potential and foster the talents that are critical to the future of our state and nation,” Easter said.

Under the proposal, base tuition for in-state students would increase $202 to $12,036 a year in Urbana-Champaign, $178 to $10,584 in Chicago, and $158 to $9,405 in Springfield.

Officials said the university hopes to hold future tuition increases to the rate of inflation or below, but cautioned that significant reductions in state funding could lead to larger increases.

The university’s annual direct state appropriation, which covers day-to-day operating costs, has decreased nearly 23 percent — or about $180 million — since fiscal 2002, without adjusting for the effects of inflation. Over those years, enrollment has increased about 14 percent, to more than 78,000 students last fall across the university’s three campuses.

In addition to promoting affordability, the university’s tuition-setting policy calls for the board to lock in rates early in the year rather than in the spring. By setting tuition in January, trustees aim to make the planning process easier on families and allow more time to firm up financial aid.

Undergraduate fees/housing

The committee also will consider adjustments to student fees and room-and-board rates for the 2014-15 academic year.

Proposed student fees exclude student health insurance rates, which are typically established in March. Fees that will be considered by the committee, and later by the full board, contribute to costs such as operating campus recreational facilities, student unions, career services, athletics, counseling centers and libraries, and also help with facility maintenance, renovations and utilities.

At the Urbana campus, those fees would increase 2.3 percent, or $68, to $2,984 per year, and Chicago’s fees would rise 1.7 percent, or $52, to $3,062 per year. At Springfield, fees would rise 4.1 percent, or $78, to $1,970 per year, largely the result of an increase in the health services fee.

Under the proposal, tuition and fees for the 2014-15 academic year would increase by a combined 1.8 percent in Urbana, 1.6 percent at UIC and by 2 percent in Springfield. For the 2013-14 academic year, tuition and fees rose by an average 2.9 percent at the nation’s four-year public colleges, based on the latest survey by the College Board, a nonprofit association representing U.S. colleges and universities.

Undergraduate room-and-board costs at the Urbana campus, based on the standard double-occupancy room and 14-meal-per-week plan, would rise 2 percent, or $201, to $10,180 per year. Similar to the guaranteed four-year tuition policy, room-and-board costs on the Urbana campus are locked in for up to four years if students continue to live in campus residence halls, a policy set by the campus.

At the Chicago campus, the cost for a double-occupancy room and 14-meal plan would rise 2.5 percent, or $257, to $10,518 per year. At the Springfield campus, the cost for a double-occupancy room in Lincoln Residence Hall with a full meal plan would rise 2.9 percent, or $300 to $10,650 per year.

Pension review

The committee heard a report on a resolution that will be considered by the full board Jan. 23, directing Easter and top administrators to assess the impact of pending changes in the state’s pension system and explore options to help preserve employee retirement benefits.

A competitive compensation plan is vital to recruit and retain top faculty and staff, university officials say, but public pension funding changes approved by the legislature in December would put the U of I at a disadvantage by reducing cost-of-living increases, increasing retirement ages and capping pensionable salaries.

If the resolution is approved, Easter and his staff will examine supplemental pension programs and other options to help offset deficiencies, and make recommendations to the board before the new state pension funding changes take effect June 1, 2014.

Posted Jan. 13, 2014

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