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Tuition Policy Advisory CommitteeTuition Policy Advisory Committee

November 2007November 2007

RecommendationsRecommendations

Public ForumsPublic Forums

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The Tuition Setting ProcessThe Tuition Setting Process

Aug 2007:Aug 2007: Constitute TPAC – 4 students, 2 deans, 1 faculty member, 2 administrators

Sept-Nov 2007:Sept-Nov 2007: Assess critical needs, formulate proposal

Nov 2007:Nov 2007: Recommend tuition policy to President, present proposal to campus & solicit feedback

Dec 2007:Dec 2007: President develops tuition proposal, submits to UT System

Mar 2008:Mar 2008: Regents consider and vote on campus proposal

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Summary of TPAC Recommendations to Summary of TPAC Recommendations to PresidentPresident

Continue to target a total student population of 49,700 students.

Allow the 2-year Energy Fee to expire as originally planned.

Increase average resident undergraduate total cost by$318/semester (7.8%) fall 2008-09 and $303/semester (6.9%) fall 2009-10. Total Cost for resident graduate students will be increased similarly.

Establish a flat-rate tuition structure for graduate and professional students.

Continue an aggressive UT Grant financial aid set-aside program to provide aid to students of families earning up to $80,000/year.

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Incremental Needs and Funding SourcesIncremental Needs and Funding Sources($ in Millions)($ in Millions)

08-09 09-10NEEDS:Hire 30 additional faculty members 2.3$ 2.5$ Fund a 3% salary increase and benefits pool 24.6 25.6 Fund SSBC recommendations 0.8 0.8 Fund University/College academic initiatives 29.7 21.1 Fund financial aid set-aside 7.2 6.4 Incremental funding needs 64.6$ 56.4$

SOURCES:University: Cost reductions and budget reallocations 17.7$ -$

Projected increase in AUF 15.1 13.6 Cash balances (1.6) 0.6 Other income 0.2 0.2 subtotal University 31.4 14.4

State of Texas: Legislative appropriations 0.2 10.3

subtotal State 0.2 10.3

Students: Increase total cost to attend 33.0 31.7 subtotal Students 33.0 31.7

Total proposed funding sources 64.6$ 56.4$

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Growth Rate of Funding SourcesGrowth Rate of Funding Sources

(1) (2) (3) (4) (5) (6)Budget Increase Assuming Increase Assuming2007-08 All Grow at 4.70% Forecast Growth Difference

$M $M % $M % $MState General Revenue 322.4 15.2 4.70% 0.2 0.06% (15.0)Tuition Income 469.0 22.0 4.70% 33.0 7.04% 11.0Available University Fund 142.5 6.7 4.70% 15.1 10.60% 8.4Indirect cost 67.0 3.1 4.70% 0.0 0.00% (3.1)Other revenue 31.0 1.5 4.70% 0.2 0.65% (1.3)Total Core Academic Budget 1,031.9 48.5 4.70% 48.5 4.70% 0.0

Cost Reductions and Cash Balances 16.1 16.1

64.6 64.6

NOTE: The Higher Education Price Index (HEPI) is 5.0% for 2006 compared to the Consumer Price Index (CPI) of 3.8%.

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Diminishing State SupportDiminishing State Support

1975-76 Total Academic Budget Sources:

$120M

Other $30M 25%

State General

Rev $90M 75%

2007-08Total Academic Budget Sources:

$1032M

Other $710M

69%

State General

Rev $322M

31%

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The Permanent University Fund (PUF)The Permanent University Fund (PUF)

UT System West Texas LandsUT System West Texas Lands

PUFPUF Lands (minerals & surface rights) Lands (minerals & surface rights)

2007 Market Value $14.1B2007 Market Value $14.1B

Available University Fund

2/3 UT System 1/3 A&M System

UT System

UT Austin receives about 30% of the total AUF income from the PUF

4.75% payout

Fy07-08 $142.5M

UTIMCOUTIMCO

PUF PUF Endowment Fund InvestmentsEndowment Fund Investments

$ $ FinancialFinancial

ReturnReturn

UT Austin

55% 45%

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Private EndowmentsPrivate EndowmentsTotal 2007 Value $3.0BTotal 2007 Value $3.0B

Payout of 4.75% equals $110MPayout of 4.75% equals $110M

Restricted by Donor97.0%

Unrestricted3.0%

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Historical Tuition Increases – Full-Time Historical Tuition Increases – Full-Time Undergraduate Resident StudentsUndergraduate Resident Students

In 2003, the Legislature initially proposed a $46/SCH tuition increase or $690 for 15 SCH. Ultimately, the Legislature passed deregulated tuition instead.

Of the $779 increase in fall 2004, $690 would have come from a “catch up” by the Legislature.

Fall 2003 Fall 2004 Fall 2007

4 year Increase Fall 2003

to Fall 2007

Proposed Fall 2008

5 year Increase Fall 2003

to Fall 2008

Proposed Fall 2009

6 year Increase Fall 2003

to Fall 2009

Average Academic Charge for All Colleges/Schools 2,721$ 3,500$ 4,065$ 49.4% 4,383$ 61.1% 4,686$ 72.2%

Liberal Arts Only 2,508$ 3,294$ 3,835$ 52.9% 4,167$ 66.1% 4,476$ 78.5%

Natural Sciences Only 2,668$ 3,459$ 4,030$ 51.0% 4,330$ 62.3% 4,621$ 73.2%

Tuition

Deregulation

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Financial Aid – Grant Awards per Financial Aid – Grant Awards per Semester for Continuing StudentsSemester for Continuing Students

Annual Family Income Award AwardResident Undergraduate Student 2008-09 2009-10

$0-$40,000 $1,450 $1,540$40,001-$60,000 75% of above 75% of above$60,001-$80,000 50% of above 50% of above

Resident Independent Student 50% of above 50% of aboveGraduate Student 50% of above 50% of above

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Financial Aid – Grant Awards per Semester for Financial Aid – Grant Awards per Semester for New Students New Students

(entering summer 2008 or later)(entering summer 2008 or later)

Annual Family Income Award AwardResident Undergraduate Student 2008-09 2009-10

$0-$40,000 $1,250 $1,450$40,001-$60,000 75% of above 75% of above$60,001-$80,000 50% of above 50% of above

Resident Independent Student 50% of above 50% of aboveGraduate Student 50% of above 50% of above

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How many students currently benefit from How many students currently benefit from the UT Grant program?the UT Grant program?

Fall 2007Number of Students

Annual Family Income Receiving UT Grants

$0-$40,000 8,801$40,001-$60,000 2,147$60,001-$80,000 1,580

TOTAL 12,528

The above figures only include students who applied for financial assistance.

About 56% of students receive some form of financial assistance.

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Graduate Flat Rate TuitionGraduate Flat Rate Tuition

Revenue neutral: No matter how many hours a student takes, their tuition bill will not be significantly higher or lower under this plan than it would be in current system

Not intended to change behavior: Undergraduate flat rate system provides an incentive for taking more credit hours – Graduate flat rate does not

Greater transparency: Student will know ahead of time how much total bill will be, and so will the university

More fair for dual degrees: Eliminates redundant fees

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National Comparison of TuitionNational Comparison of Tuition RESIDENT 2007-08 RESIDENT 2006-07

Undergraduate Undergraduate Tuition Tuition

Institution and Fees Rank and Fees Rank

University of Illinois-Urbana/Champaign $ 11,130 1 $ 9,882 2

University of Michigan-Ann Arbor 11,111 2 10,341 1

Michigan State University 9,912 3 8,887 4

University of Minnesota-Twin Cities 9,598 4 9,173 3

Ohio State University-Main Campus 8,676 5 8,667 5

University of California-Berkeley 8,385 6 7,800 6

Indiana University-Bloomington 7,837 7 7,460 8

University of California-Los Angeles 7,713 8 7,143 9

University of Texas-Austin 7,670 9 7,630 7

University of Wisconsin-Madison 7,188 10 6,730 10

University of Washington 6,385 11 5,985 11

University of North Carolina-Chapel Hill 5,340 12 5,033 12

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Questions?Questions?

A copy of this presentation and other tuition A copy of this presentation and other tuition information is available on the information is available on the

TUITION DOLLARS AND SENSE WEBSITETUITION DOLLARS AND SENSE WEBSITE::

http://www.utexas.edu/tuition/http://www.utexas.edu/tuition/

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Supplemental MaterialsSupplemental Materials

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ForecastForecastTuition Policy Advisory Committee (TPAC)Financial Forecast Summary Budget Forecast Forecast Forecast Forecast Forecast Forecast Forecast

($ in millions) 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15ACADEMIC CORE BUDGET SOURCESState General Revenue (GR) 322.4 322.6 332.9 335.2 345.2 347.8 358.3 361.2 Tuition Income 464.0 464.0 464.0 464.0 464.0 464.0 464.0 464.0 Energy Fee 5.0 - - - - - - - AUF System Estimate 142.5 157.6 171.2 182.7 191.9 201.0 210.5 220.5 Indirect Cost 67.0 67.0 67.0 67.0 67.0 67.0 67.0 67.0 Other Revenue 31.0 31.2 31.4 31.6 31.8 32.1 32.3 32.5 Balances 8.6 3.0 3.6 3.0 3.0 3.0 3.0 3.0 Total Budget Sources 1,040.5 1,045.4 1,070.1 1,083.5 1,102.9 1,114.9 1,135.1 1,148.2

ACADEMIC CORE STATUS QUO USESTexas Tomorrow shortfall 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 Texas Public Education Grants (TPEG) 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 Personnel Costs--Salaries 547.6 547.6 547.6 547.6 547.6 547.6 547.6 547.6 Personnel Costs--Medical Benefits 59.3 59.3 59.3 59.3 59.3 59.3 59.3 59.3 Personnel Costs--Retirement, Insurance Benefits 82.5 82.5 82.5 82.5 82.5 82.5 82.5 82.5 Post-retirement Benefits 15.4 15.4 15.4 15.4 15.4 15.4 15.4 15.4 Utilities (excluding personnel costs) 50.3 46.4 46.4 46.4 46.4 46.4 46.4 46.4 Transfers for Capital Projects 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 Transfers for Debt Service 31.9 31.8 31.8 31.5 30.2 30.2 30.2 30.2 Financial Aid 27.9 17.8 17.8 17.8 17.8 17.8 17.8 17.8 Other Operations 178.8 175.2 175.2 175.2 175.2 175.2 175.2 175.2 Total Status Quo Uses 1,036.5 1,018.8 1,018.8 1,018.5 1,017.2 1,017.2 1,017.2 1,017.2

Total Budget Sources Minus Status Quo Uses 4.0 26.6 51.3 65.0 85.7 97.7 117.9 131.0

ADDITIONAL USESTexas Tomorrow shortfall 0.5 1.5 1.5 1.5 1.5 1.5 1.5 Personnel Costs - Salaries and Fringes 24.6 50.2 75.3 101.5 128.4 156.4 185.5 Reduction of St./Fac. Ratio--salaries + assoc. fringes 2.3 4.8 7.3 10.0 12.8 15.7 18.8 Institutional Commitments Beginning FY 08-09 11.2 18.6 35.8 55.6 75.5 95.4 115.4 Student Services Increase (Net) 0.8 1.6 1.6 1.6 1.6 1.6 1.6 College Increase (Net) 14.7 27.1 27.1 27.1 27.1 27.1 27.1 New Space Maintenance and Utilities 1.3 1.6 3.3 3.3 3.3 3.3 3.3 Capital Projects - - 6.3 6.3 6.3 6.3 6.3 Increased Recurring Repair & Renovation Funding 2.0 2.0 2.0 2.0 2.0 2.0 2.0 Additional Financial Aid 7.2 13.6 13.6 13.6 13.6 13.6 13.6 Total Additional Uses - 64.6 121.0 173.8 222.5 272.1 322.9 375.1

Total Budget Sources Minus All Costs 4.0 (38.0) (69.7) (108.8) (136.8) (174.4) (205.0) (244.1)

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Resident Undergraduate Tuition per SemesterResident Undergraduate Tuition per Semester2008-092008-09

2008-2009RESI DENT

2007-08 2008-09

COLLEGEFLAT RATE TUI TI ON

PROPOSED I NCREASE

FLAT RATE TUI TI ON

ARCHITECTURE 3,945 465 4,410BUSINESS 4,454 353 4,807COMMUNICATION 4,019 311 4,330EDUCATION 4,020 304 4,324ENGINEERING 4,292 273 4,565FINE ARTS 4,154 300 4,454GEOSCIENCES 4,068 389 4,457LIBERAL ARTS 3,835 332 4,167NAT SCIENCES 4,030 300 4,330NURSING 4,127 463 4,590SOCIAL WORK 4,000 374 4,374

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Resident Undergraduate Tuition per SemesterResident Undergraduate Tuition per Semester2009-102009-10

2009-2010RESI DENT

2008-09 2009-10

COLLEGEFLAT RATE TUI TI ON

PROPOSED I NCREASE

FLAT RATE TUI TI ON

ARCHITECTURE 4,410 382 4,792BUSINESS 4,807 326 5,133COMMUNICATION 4,330 275 4,605EDUCATION 4,324 290 4,614ENGINEERING 4,565 283 4,848FINE ARTS 4,454 320 4,774GEOSCIENCES 4,457 408 4,865LIBERAL ARTS 4,167 309 4,476NAT SCIENCES 4,330 291 4,621NURSING 4,590 446 5,036SOCIAL WORK 4,374 329 4,703

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Resident Graduate Tuition per SemesterResident Graduate Tuition per Semester2008-092008-09

2008-2009RESI DENT

COLLEGE2007-08 AVG BI LL

PROPOSED I NCREASE

2008-09 AVG BI LL

ARCHITECTURE 3,425 362 3,787BUSINESS 3,041 144 3,185COMMUNICATION 3,392 277 3,669EDUCATION 3,210 221 3,431ENGINEERING 3,620 250 3,870FINE ARTS 3,522 257 3,778GEOSCIENCES 3,203 313 3,516INFORMATION 3,321 658 3,979LIBERAL ARTS 3,059 209 3,269NAT SCIENCES 3,154 215 3,369NURSING 3,420 399 3,819PHARMACY 3,198 422 3,620PUBLIC AFFAIRS 3,270 321 3,591SOCIAL WORK 3,460 312 3,773

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Resident Graduate Tuition per SemesterResident Graduate Tuition per Semester2009-102009-10

2009-2010RESI DENT

COLLEGE2008-09 AVG BI LL

PROPOSED I NCREASE

2009-10 AVG BI LL

ARCHITECTURE 3,787 328 4,115BUSINESS 3,185 153 3,338COMMUNICATION 3,669 238 3,907EDUCATION 3,431 187 3,618ENGINEERING 3,870 259 4,129FINE ARTS 3,778 276 4,054GEOSCIENCES 3,516 332 3,848INFORMATION 3,979 338 4,317LIBERAL ARTS 3,269 213 3,482NAT SCIENCES 3,369 229 3,598NURSING 3,819 314 4,133PHARMACY 3,620 385 4,005PUBLIC AFFAIRS 3,591 330 3,921SOCIAL WORK 3,773 273 4,046

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National Comparison of TuitionNational Comparison of Tuition RESIDENT 2007-08 RESIDENT 2006-07

Undergraduate Undergraduate Tuition Tuition Percentage

Institution and Fees Rank and Fees Rank

University of Illinois-Urbana/Champaign $ 11,130 1 $ 9,882 2 $ 1,248 12.63%

University of Michigan-Ann Arbor 11,111 2 10,341 1 770 7.45%

Michigan State University 9,912 3 8,887 4 1,025 11.53%

University of Minnesota-Twin Cities 9,598 4 9,173 3 425 4.64%

Ohio State University-Main Campus 8,676 5 8,667 5 9 0.10%

University of California-Berkeley 8,385 6 7,800 6 585 7.49%

Indiana University-Bloomington 7,837 7 7,460 8 377 5.05%

University of California-Los Angeles 7,713 8 7,143 9 570 7.98%

University of Texas-Austin 7,670 9 7,630 7 40 0.52%

University of Wisconsin-Madison 7,188 10 6,730 10 458 6.81%

University of Washington 6,385 11 5,985 11 400 6.68%

University of North Carolina-Chapel Hill 5,340 12 5,033 12 307 6.09%

Dollar

DIFFERENCE