Seven percent tuition increases needed to catch up with decade of growth

Interim President Ben Allen told a regents task force Aug. 9 it would take annual tuition increases for five years of 7 percent for resident undergraduates and 4 percent for nonresidents to maintain quality and scale key aspects of the university to begin to catch up with 10 years of enrollment growth.

If enacted, those increases would raise base tuition to $10,457 in fall 2022 for resident undergraduates, to $25,905 for nonresident undergraduates. Base tuition for those students this fall is $7,456 and $21,292, respectively.

The state Board of Regents' tuition task force asked each of the three regent universities to prepare a five-year tuition proposal that supports its specific needs as part of a summer-long study aimed at making tuition rates more predictable. Northern Iowa shared its plan Aug. 7; Iowa presents its proposal Aug. 14.

Regent and tuition task force chair Larry McKibben, in opening the session, noted that "state funding is not adequately supplementing the lower tuition rates that our resident students deserve. First-generation families can't afford to send their children to our public universities."

McKibben continued that "It's unrealistic to expect three large universities to operate without annual revenue increases. It's time for the budgeting process to become proactive, not reactive."

Bottom line

Allen shared this "bottom line" with the task force: Since 2009, Iowa State's enrollment has surged 37 percent while its state appropriation per resident student has dropped 30 percent. Iowa State is receiving $3,700 less per resident student from the state "while we're working to provide a high-quality education for more than 36,600 students -- about 55 percent of whom are Iowans.

"Over the past decade, we've been forced to stretch our faculty, staff and facilities -- and we've reached a breaking point," he said. "We’re tipping the balance between efficiency and educational quality."

Additional revenue, he said, would address four essential priorities that will protect and improve the quality of the student experience at Iowa State. Those priorities are:

• Faculty and staff retention. Provide competitive salaries and reasonable annual salary increases to ensure the university retains its top employees so students learn and are supported by the very best. Without new investments, the university will wipe out the progress it has achieved, Allen said.
• Faculty and staff recruitment. Hire enough faculty to achieve a net increase of 330 tenured and tenure-eligible faculty, two-thirds of whom would be in the STEM (Science, technology, engineering, math) disciplines. Without a major change in enrollment, this would lower the university's student-faculty ratio to 16:1. Additional staff are also needed, he said, to support the needs associated with a larger student body.
• Building maintenance and expanded capacity. An estimated 900,000 square feet of new building space is needed to accommodate the additional faculty and staff. The university also needs to address deferred maintenance issues, including the heavily trafficked STEM buildings.
• Investments in need-based financial aid proportional to the tuition increases. Iowa State's land-grant mission is to educate anyone eligible -- regardless of socio-economic status. Providing financial aid is an important part of that mission, Allen noted. 

Five years: Iowa State undergraduate tuition proposal

Fall 2017 tuition: Resident $7,456, nonresident $21,292

Iowa State's tuition proposal is built upon four assumptions over the next five years, Allen told the task force. If any of them change, the proposal would be revisited. They are:

• Flat state operating appropriations.
• Flat enrollment.
• Inflation of 2.14 percent (five-year average of the Higher Education Price Index).
• Annual reallocations in the university operating budget of 2.25 percent, "our commitment to our students and Iowa taxpayers," he said.

Allen also said university leaders and friends will continue to advocate strongly to the Legislature to provide more operating funds.

"Our students deserve it, and frankly, our state needs it," Allen said, citing a state workforce report that 128,000 Iowans aged 25-64 years will need to earn a degree or gain other credentials to be employable in 2025.

Tipping the balance

Allen gave examples of leading indicators that Iowa State has arrived at its breaking point. He said faculty in the colleges of Business and Engineering and staff in student counseling services have left due to salary issues. More faculty and staff could have left but have stayed out of loyalty, he said. He also cited an ag education teaching classroom with a capacity of 30 now holding 70 students. Ten engineering teaching labs run 12 hours a day and two large lecture halls (Kildee and Food Sciences) are in "desperate need" of renovation, Allen said. College of Business classes run until 10 p.m. four nights a week due to classroom availability.

"It took us 10 years to reach this imbalance, and it likely will take us more than five years to correct it, but we must start now to fix the issues," he noted.

While the proposal focused on undergraduate tuition, graduation tuition will go up in step with undergraduate increases, Allen said. He also said differential tuitions would continue to be used to help pay the costs connected to academic programs that are more expensive to deliver.

Public input

Eleven people, including five Iowa State students and three state legislators, spoke during a 60-minute listening session that followed the Iowa State presentation. Two business leaders from the ISU Research Park (and ISU alumni), vice president Dave Tucker of Workiva and site manager Mike Roof of Boehringer Ingelheim, spoke about the importance of having Iowa State students as interns and employees.

"Iowa State is my primary recruiting pipeline," Tucker said. "We'll hire 30 to 50 percent of our interns, in part depending on how well I can compete with Google, Amazon and Microsoft for those students."

Fifty-three of this summer's 59 interns are Iowa State students and because of their skills, they are put on product development teams and many have written code that's in production before their internships are over.

"What is critical to me is that Iowa State is able to continue doing what it does to maintain that caliber of student," Tucker said. "I want students I have to compete for. They've done a good job of that so far."

Roof said Boehringer Ingelheim is in Ames for two reasons: technology and talent. He said 40 percent of the 75 Ames employees are Iowa State alumni. He also relies on Iowa State for undergraduate interns, graduate researchers and research agreements.

He said Iowa State grads come with knowledge and skills that give them "an exponential jumpstart as we integrate them into the company."

"Anything you do that impacts tuition and employment impacts us at the research park, and I would encourage anything you can do to keep tuition low," Roof said.

Noting that the state is not in an economic recession, Rep. Beth Wessel-Kroeschell told task force members, "I don't want you give up on legislative and state support. It's our responsibility to make sure young Iowans have access to an affordable education."

She said the job before them is to look at the current budget, find spots "where we are misspending dollars and revert those to areas that are our responsibility. One of those is higher education."

McKibben said the four-member task force will present its report to the full board at its September meeting.

Related story

Universities asked to prepare five-year tuition proposals for regents' tuition task force, July 20, 2017