Tuition trends show state appropriations have lessening role in paying for college

Devyn Leeson

Any of the three proposed budget recommendations for Iowa’s Regent universities will continue a trend that has tuition playing a larger role in higher education funding than state appropriations.

Three different appropriation proposals from the state legislature could have very different results in terms of FY2020 tuition levels at Iowa State and other Regent universities. While Gov. Kim Reynolds recommended the legislature meet the request from the Board of Regents and pass an $18 million appropriations increase over FY2019, the Iowa House has passed a $15.9 million increase and the Senate is still working out their plan for Regent appropriations.

Rep. Beth Wessel-Kroeschell, D-Ames, said the Senate proposal is currently around a $12 million appropriations increase over the previous fiscal year and that the governor’s proposal is “very unlikely at this point” to pass, meaning a tuition increase of more than 3 percent for resident undergraduate students is almost guaranteed.

This is due to a November decision by the Board of Regents to set a 5-year tuition formula that has a 3 percent base increase and up to an additional 2 percent increase based on the Higher Education Price Index and state appropriation levels.

“I do not think it is healthy,” Wessel-Kroeschell said about tuition increases. “When I went to school it was reversed; when I went to UNI, I paid about 20 percent of the cost to attend the university and the state picked up the other 80 percent. Now it is basically the reverse of that. Students and families are the ones who are picking up the heavier load. We will have to face that burden.”

In 2001, the state provided $269,897,593 to Iowa State and the remaining costs associated with school were covered by tuition and fees amounting to $101,403,362.

This ratio slowly changed over time, however, with annual appropriations fluctuating until their height in 2009 when $276,483,151 was given to Iowa State by the Legislature and student fees and tuition covered the remaining $211,130,075. Since then, state appropriations have decreased or stagnated while tuition revenues have more than doubled to today’s $466,748,000.

Regardless of which budget proposal passes, this trend will continue. Even if Iowa State receives $7 million of the $18 million request, tuition increases would continue to outpace the state appropriations.

Strictly looking at resident undergraduates, a 3 percent increase would constitute more than a $4 million increase in tuition revenues based on current university enrollment numbers. Once graduate and out-of-state student tuition, which have historically had a greater percentage increase than resident undergraduate tuition, is accounted for, the total increase in tuition revenue is likely to exceed the $7 million provided by the state.

Figures based on the 3 percent tuition increase are still lower than what Wessel-Kroeschell says is the likely solution. Any percentage increase higher than 3 percent would further increase the amount students have to pay compared to the state Legislature.

“If you look at the amount of burden that is, you look at the student debt, they will have to take out more loans, and students practically run out of the ability to fund their education their senior year,” Wessel-Kroeschell said. “If you take the amount of a 3 percent increase for Iowa State that would be about a $233 increase, [an increase of] 4 percent is about $310 and [an increase of] 5 percent is about $388. That is significant.”

Josh Lehman, senior communications director for the Board of Regents, said there are no figures or estimates for what out-of-state or graduate tuition rates will be, but the Board of Regents will set the remaining levels of funding to match the needs of the university.

“The Board has spent several years looking at tuition and funding of our universities,” Lehman said in an email correspondence with the Daily. “There are three main segments of funding — tuition, state appropriations, and savings/reallocations … The total resources needed by the university in one year is the critical number, and finding the right mix of those resources is the challenge.”