University of Kansas administrators adored a four-year tuition price compact mandated for most incoming freshmen. It delivered peace of mind to students and their parents that college costs wouldn’t run crazily out of control.
Tuition costs in Kansas remain on the rise, but less steeply than they had years ago.
So KU is now letting families decide whether to lock in tuition costs, or gamble that rates won’t skyrocket.
For the last eight years, the tuition compact has been the mandatory route for most freshmen. Only those who transferred into the university from other schools avoided it.
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That changes this fall. For the first time since the compact launch, incoming freshmen can choose whether to lock in the tuition rate for four years or pay a rate that could change, likely upward, each year. The compact starts with a steeper rate, but it protects students against unknown tuition hikes.
Students wanted the option, said Jessie Pringle, the student body president. She’ll be a senior and has been paying tuition on the compact for three years.
“For me, the compact worked out,” Pringle said. “Even though I paid a higher tuition starting out, it levels off by the senior year. I enjoyed the reassurance of knowing what my rate was going to be year after year.”
The compact sets tuition based on an estimate of how much tuition might go up each year for the next four years. The projected four-year cost then is spread over eight semesters. The tuition quoted to incoming Kansas students equals what they would pay for four years based on projections of where tuition rates appear headed.
The university has promoted the capped-tuition plan as a way to draw more students and to keep those who might have been thrown off by unexpectedly high tuition hikes.
If tuition increases continue shrinking, as they have every year since 2010, taking the standard route over the compact might save students money, officials said.
“Whether you opt in or you opt out of the compact,” Pringle said, “it is always a gamble on whether you receive the better end of the deal.”
University officials predict about half of incoming freshmen this fall will opt out of the compact.
“The formula for setting the compact has been based on the assumption that tuition was going to increase about 5 to 6 percent each year,” said Diane Goddard, vice provost for administration and finance at KU. “A big flaw, because it almost forced us to have that kind of tuition increase each year. It sort of tied our hands.”
That assumption, she said, proved contrary to the overall university goal to keep tuition down.
KU is the only one of the six public universities governed by the Kansas Board of Regents that offers a fixed-rate tuition plan. Tuition for each university is set annually by the Regents. The board approved the KU compact expecting benefits to students and parents would come in three ways:
▪ A set rate would mean parents could plan, knowing their payment would not change from year to year.
▪ If annual rates went up, students on a fixed plan could save money.
▪ And a four-year, fixed-rate plan might encourage more students to graduate in four years.
Students got predictability with the compact, but that four-year graduation expectation didn’t come through, Goddard said.
While KU has seen a higher graduation rate, “we attribute it to other first-year advising programs,” Goddard said. “But just the compact alone did not seem to move the needle.”
KU implemented the fixed-rate tuition in 2007 at the insistence of students and parents after several years of tuition hikes that ranged from 14.3 percent to 25.2 percent.
The university estimated that rate increases would stay around 6 percent and they did, for the next three years. Then for the 2010-2011 school year, tuition jumped 9.2 percent. The next year, the hike dropped to 6.2 percent and has declined every year since. Effective in the fall, the tuition goes up 3.6 percent, the lowest rate increase at KU since the 2001-2002 academic year.
If that decline continues, “it puts a squeeze on the compact,” Goddard said. Students paying the standard tuition could end up paying less over four years than those on the compact.
Yet KU graduate student Angela Murphy, a member of the student senate and student fees committee, said if as a doctoral candidate she could sign on to the compact, she “ would do it in a second.”
Even with tuition dropping every year, Murphy said, “the compact is your assurance that if tuition happens to spike one year you are still OK, because it’s set. I think it’s worth it even if by being on the compact you end up overpaying by 1 or 2 percent.”