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Clock starts ticking on tuition plans

While Colorado college students are loafing or waiting tables this summer, college administrators are getting to work on plans that could affect how much college will cost five years from now.

Senate Bill 10-003, signed into law by Gov. Bill Ritter on Wednesday, changes a lot of the rules – albeit temporarily – for how institutions in the state system handle their money.

Gov. Bill Ritter signs Senate Bill 10-003 on June 9. Those attending included Nancy McCallin, community college system president (at left); CU President Bruce Benson (next to McCallin), and bill sponsors Mike May (behind Benson), Karen Middleton (behind Ritter) and John Morse (far right). Photo courtesy governor's press office.
Gov. Bill Ritter signs Senate Bill 10-003 on June 9. Those attending included Nancy McCallin, community college system president (at left); CU President Bruce Benson (next to McCallin), and bill sponsors Mike May (behind Benson), Karen Middleton (behind Ritter) and John Morse (far right). Photo courtesy governor's press office.
Alan Petersime

For the last several years, tuition increase ceilings have been recommended by the governor every fall and set by the legislature every spring, just a couple of months before college budget years start on July 1.

That system was used for the last time in the 2010-11 state budget bill, which allows colleges to raise tuition by up to 9 percent for resident undergraduate students for the upcoming school year. Most colleges have taken that route for next year. (Colleges already have freedom to set tuition for non-resident undergraduates and for grad students.)

College and university presidents have been pushing to change that system, arguing that they need longer budget planning time and more freedom to use tuition hikes to offset cuts in start support, which began in 2009-10 and are expected to become more severe in 2011-12, when federal stimulus money dries up.

Neither Ritter nor legislators were willing to give college trustees a tuition blank check, but SB 10-003 does give them more predictability and the chance to make the case for tuition increases higher than 9 percent.

Starting with the 2011-12 school year and running through 2015-16, every college board will be free to raise tuition up to 9 percent a year without executive branch or legislative approval.

(That means a hypothetical credit hour that cost $50 this year would cost $84 in 2015-15, a 68 percent increase.)

And, colleges that want increases of more than 9 percent a year can request permission from the Colorado Commission on Higher Education.

Institutions seeking increases of more than 9 percent will have to submit five-year plans detailed the proposed increases, how they proposed to maintain accessibility and affordability for low- and middle-income students, how they will control student debt, how they will address the needs of underserved students and how they will maintain academic quality.

The CCHE has 90 days to decide on a college’s application and can give approval for the first two years. Approval for the following three years is dependent on an institution demonstrating it has successfully implemented its plan.

If the commission rejects a college’s plan, the school can submit an alternate.

While the start of the 2011-12 school year may seem far in the future, the financial planning needs to start this summer.

The CCHE is beginning to develop a system for handling institutions’ requests, and the commission is expected to discuss the issue further at a June 17 special meeting.

Four key issues need to be fleshed out before institutions are in a position to decide whether to apply for expanded tuition authority. The commission needs to decide on a 2011-12 allocation model (how much state money individual colleges should receive), the format for applications, some guidance on what protection of access and affordability means, and a timetable for the whole process.

The timetable looks like it will have to be worked in between July 1 and Nov. 1, when the executive branch sends its detailed 2011-12 budget proposal to the legislative Joint Budget Committee.

Given that groundwork that needs to be done, “It’s too early” to predict how many institutions might apply said Rico Munn, director of the Department of Higher Education.

There’s additional paperwork for colleges to do this summer and fall. SB 10-003 also gives each institution a Nov. 10 deadline to prepare a report detailing how it would handle a 50 percent cut in direct state support.

Total higher education revenue is being held at about $2 billion a year, but only with the help of tuition increases and federal stimulus funds. Some legislators fear that continued sluggishness in state revenues could force a cut in state support of as much as $300 million in 2011-12. (Officials will bet an updated look at the revenue picture on June 21, when updated quarterly forecasts are issued.)

While SB 10-003 lays out a lot of financial details, it’s explicitly meant to be an interim measure.

“Senate Bill 3 is not a permanent fix. It does, however, provide short-term relief while we develop a strategic roadmap for long-term sustainability, and central to this new law is the principle that a public higher education in Colorado remains affordable and accessible to all,” Ritter said during Wednesday morning’s signing ceremony.

So, the other key part of the new law requires the commission to submit a proposed master plan for higher education to the governor and legislature by Dec. 15.

That work began months before the bill was passed under the direction of a Ritter-appointed panel called the Higher Education Strategic Planning Steering Committee. Four subcommittees have been working on details of the plan, and their preliminary suggestions are expected to be discussed at a June 23 steering committee meeting.

“I’m very satisfied with the strategic planning process,” Munn said in a recent interview. “I hope that when the (2011) session starts the real discussion is about the master plan.”

While its tuition and master plan provisions have received the most attention, SB 10-003 gives colleges more freedom in other areas as well, including:

  • Colleges can decide how they use their allocations of state financial aid.
  • The University of Colorado and Colorado State University have freedom to enroll more foreign students, who typically pay full non-resident rates, as long as the two systems meet certain access requirements for Colorado students.
  • Institutions don’t have to follow state controller’s fiscal rules if they have their own, and colleges can set their own rules for employee perks.
  • Colleges are allowed to set their own policies for payments, lease-purchase agreements, debt collections and write-offs, and motor vehicle use rules.
  • Institutions will have more flexibility in rehiring retirees, making personal services contracts and enforcing contracts with vendors.
  • There’s some loosening of CCHE review over campus construction projects.

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