Understanding Tuition

Transcription

1 Understanding Tuition Robert King President, Kentucky Council on Postsecondary Education April 20,

2 Council Responsibility: Tuition Setting Determine tuition and approve the minimum qualifications for admission to the state postsecondary educational system. (KRS 164:020 8) Set caps on increases, allowing college boards the flexibility to self-select tuition rates, but also a ceiling to keep increases under control. Kentucky Council on Postsecondary Education 2

3 We take into account Students family and individual incomes, and their capacity to save for college. Federal, state and institutional scholarships and grants available to assist with tuition costs. Students and parents reliance on loans, and potential debt levels. The need to enroll and graduate more students to build Kentucky s workforce. Campuses ability to provide a high quality education. Needs of our communities and our economy. Kentucky Council on Postsecondary Education 3

4 How we compare Resident undergraduate tuition and fees, compared to the region Sticker price Kentucky is mid-tier for all four-year schools.* Kentucky is second from the top when it comes to community and technical colleges.* Net price Kentucky is mid-tier when it comes to research universities (UK, UofL).** Kentucky is second from the bottom when it comes to comprehensive universities (EKU, KSU, MoSU, MuSU, NKU, WKU).** Kentucky is near the bottom in net price when it comes to community and technical colleges.** *Region: Illinois, Indiana, Ohio, Missouri, Tennessee, Virginia, West Virginia. **Region: SREB region. Kentucky Council on Postsecondary Education 4

5 Understanding the forces at work Kentucky Council on Postsecondary Education 5

6 1. Demand for highly educated people in our nation s workforce is going up 3 billion people reported to Gallup they want a job that consumes at least 30 hours per week, and by implication pays a living wage. Only 1.2 billion jobs in the world currently fit that description. As the foreign workforce becomes more educated, competition for jobs will be fierce. Source: Clifton, Jim. Coming Job War Gallup Press. Kentucky Council on Postsecondary Education 6

7 The highest proportion of good new jobs go to those most highly educated Out of 6.6 million jobs added, good jobs growth, % Low-wage jobs (less than $32,000) 29% Middle-wage jobs ($32-53,000) 44% Good jobs ($53,000 or above) 97% of good jobs were filled by persons with a bachelor s degree or higher Source: Carnevale, Jayasundera, Gulish. Good Jobs Are Back: College Graduates Are First in Line. Georgetown Center on Education and the Workforce Last accessed: 04/2017. Kentucky Council on Postsecondary Education 7

8 University labor costs Universities depend on a workforce educated to the highest levels. The demand for that talent is increasing, driving up the price. Kentucky Council on Postsecondary Education 8

9 2. We need to educate more minority/lowincome students 90% 80% 70% 60% 50% 40% 30% Bachelor s Degree Attainment Rates By Family Income Quartile, Top Quartile Second Quartile 20% 10% 0% Third Quartile Bottom Quartile Source: Postsecondary Education Opportunity. Kentucky Council on Postsecondary Education 9

10 3. State support of higher education is declining $9,000 $8,000 $7,000 $6,000 Net General Fund Appropriations and Gross Tuition Revenue per FTE Student Constant 2016 Dollars State funding per student $5,000 $4,000 $3,000 $8,438 $7,797 $7,253 $6,856 $6,441 $6,197 $6,054 $5,961 $6,003 $2,000 $1,000 $ Source: Kentucky Budget of the Commonwealth; CPE Comprehensive Database. Kentucky Council on Postsecondary Education 10

11 4. Expenses outside university control Costs, to Dollars in Millions Cost Shift (M&O) Other Fixed Cost Increases (Utilities, Contractual Obligations, etc.) $181 $1,151 Health Insurance Increases KERS/KTRS Cost Increases General Fund Cuts to Institutions (16%) $620 $175 $899 $2,455 Fixed Costs and Enacted Budget Reductions Note: Some numbers are estimates, due to changes in data collection over the time period. Source: CPE KPEDS. Kentucky Council on Postsecondary Education 11

12 5. Market forces Costs, Cuts and Tuition Revenue, to Dollars in Millions Growth in Institutional Financial Aid Cost Shift (M&O) Other Fixed Cost Increases (Utilities, Contractual Obligations, etc.) $495 $181 $1,151 Health Insurance Increases KERS/KTRS Cost Increases General Fund Cuts to Institutions (16%) $620 $175 $899 $2,455 Fixed Costs and Enacted Budget Reductions Gross Tuition Revenue Note: Some numbers are estimates, due to changes in data collection over the time period. Source: CPE KPEDS. Kentucky Council on Postsecondary Education 12

13 Decreased state support is a continued issue Percent Change in State Support for Higher Education FY % CA ID CO WO MA SC FL TN ND GA NV NY TX MO IA IN ME DE MS NJ VT AZ KY WV OK Source: Association of State Higher Education Executive Officers and the Center for the Study of Education Policy. Grapevine Report. Kentucky Council on Postsecondary Education 13

14 Despite all this, public higher ed is still a bargain and a superb investment Public K-12 Avg. Per-Pupil Expense Spending $10,192 Avg. Comprehensive University Cost (Net Price) $10,298 AFFORDABLE HOUSING definition: In general, housing for which the occupant(s) is/are paying no more than 30 percent of his or her income for gross housing costs, including utilities - U.S. Department of Housing and Urban Development. KENTUCKY MEDIAN INCOME: $43,740. U.S. Census Bureau , 2015 dollars. Sources: Kentucky Department of Education. Kentucky Education Facts CPE Comprehensive Database. Kentucky Council on Postsecondary Education 14

15 Educational attainment drives our economy Median usual weekly earnings Unemployment rate High school dropout $ % High school diploma $ % Some college/no $ % Associate degree $ % Bachelor's degree $1, % Master's degree Professional degree Doctoral degree $1,341 $1,730 $1, % 1.5% 1.7% $1137 $678 = $459 $459 x 52 = $23,868 $23,868 x 40 = $954,720 Source: U.S. Bureau of Labor Statistics, Current Population Survey Kentucky Council on Postsecondary Education 15

16 College costs have remained steady Net General Fund Appropriations & Gross Tuition Revenue per FTE Student Constant 2016 Dollars $18,000 State funding per student Tuition revenue per student $17,143 $17,078 $16,000 $14,000 $12,000 $8,444 $8,882 $9,085 $9,292 $9,631 $10,193 $10,352 $10,742 $11,075 $10,000 $8,000 $6,000 $4,000 $8,438 $7,797 $7,253 $6,856 $6,441 $6,197 $6,054 $5,961 $6,003 $2,000 $ Source: Kentucky Budget of the Commonwealth; CPE Comprehensive Database. Kentucky Council on Postsecondary Education 16

17 Students typically pay less than the cost Kentucky s Research Universities (UK and UofL) $30,000 Total cost of attendance Net price Tuition and fees $25,000 $20,000 $15,000 $20,071 $12,518 $21,178 $22,251 $22,822 $13,680 $14,359 $14,740 $24,368 $25,497 $16,327 $17,049 $10,000 $5,000 $8,580 $9,193 $9,739 $10,128 $10,524 $10,837 $ Source: CPE Comprehensive Database. Kentucky Council on Postsecondary Education 17

18 Students typically pay less than the cost, continued Kentucky s Comprehensive Universities (EKU, KSU, MosU, MuSU, NKU, WKU) $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $ Total cost of attendance Net price Tuition and fees $17,928 $18,441 $16,911 $16,846 $17,274 $15,921 $9,790 $10,484 $10,377 $10,251 $10,484 $10,298 $6,714 $7,113 $7,473 $7,706 $8,031 $8, Source: CPE Comprehensive Database. Kentucky Council on Postsecondary Education 18

19 KY campuses provide the most aid Student Financial Aid per FTE Student $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $ Campus funded grants and scholarships State grants Pell and other federal grants $2,083 $1,952 $1,693 $1,800 $1,719 $1,124 $1,031 $997 $956 $966 $1,029 $993 $778 $781 $829 $821 $762 $757 $2,786 $2,932 $2,579 $2,224 $2,326 $2,078 $2,184 $1,766 $1,941 $1,504 $1,438 $885 $677 $781 $ Source: Integrated Postsecondary Education Data System; Commonfund Institute, Higher Education Price Index (HEPI). Kentucky Council on Postsecondary Education 19

20 Council works to keep tuition increases moderated 18.0% Percent Change 14.0% 12.0% 10.0% 9.8% 15.4% 16.0% 12.8% 11.6% 8.7% 8.0% 16.0% 8.0% 6.0% 4.0% 4.5% 5.4% 6.1% 5.2% 3.1% 4.5% 3.6% 5.4% 3.7% 2.0% 0.0% Source: CPE Comprehensive Database. 11.7% AAGR 4.6% AAGR Kentucky Council on Postsecondary Education 20

21 Student debt is a concern Average Debt of Graduates State and Rank Ohio (10) Illinois (19) Indiana (21) Virginia (25) West Virginia (26) Missouri (30) Kentucky (32) Tennessee (37) $30,239 $29,305 $29,022 $27,717 $27,713 $27,480 $27,225 $26,083 KY ranks 32 nd on avg. student loan debt. Loan repayment rates are pp. higher for graduates over dropouts. Overall, the average debt-service to income ratio is 11.7% (3 yrs. after graduation), within the recommended 10-15%. Source: Project on Student Debt. Kentucky Council on Postsecondary Education 21

22 Help for students Dual credit = college credit earned in high school. Community and technical college prior to university. 15 credits a semester to aid on-time graduation. FAFSA completion early. Financial literacy and advising. Specific examples: Kentucky Federation for Advanced Manufacturing Education (KY FAME), a learn and earn initiative provided by a partnership of regional employers. University of Kentucky, shifting the bulk of institutional aid from merit-based to need-based to increase retention, student success. Kentucky Council on Postsecondary Education 22

23 Understanding College Costs Robert King President, Kentucky Council on Postsecondary Education April 20,