If Not the NBP, Then What?

May 1, 2011 | Blog

As I wrote in a post yesterday, it is standard practice for both public and private colleges and universities to use tuition revenue to provide financial aid. The typical challenge for public institutions is that they don’t generate nearly as much revenue as private institutions, and thus don’t have as much to contribute to aid. Among public institutions, the other significant challenge to ensuring affordability is convincing administrators to focus aid on financial need, rather than academic merit.

One of the strong points of Chancellor Martin’s arguments for the NBP is that UW-Madison ought to be able to use tuition to support need-based aid, if it so chooses. It has chosen to do so recently, under the Madison Initiative for Undergraduates. I base that last statement on the clear upward trajectory of resources for institutional need-based aid (what she says is a 226% increase), shown in a graph provided by the director of financial aid, Susan Fischer, at a recent meeting of the University-wide Committee on Undergraduate Recruitment, Admissions, and Financial Aid– a committee that I’ve chaired for three years. I hesitate on the statement just a bit, though, because the use of tuition to support need-based aid does not equate with enhanced affordability unless the approach reduced net price for students and no sticker shock occurred– two conditions for which I’ve been shown no evidence.

In any case, let’s say this: Martin and I agree that UW-Madison ought to be allowed to use tuition to fund need-based aid if it chooses. The question is how to make that happen. Her proposed approach is the NBP. Here’s an alternative:

The Wisconsin Legislature ought to simply change the rules, freeing the Board of Regents to approve the use of tuition in this manner. Individual institutions should submit their requests for using tuition in this way to the Board.

Why this model? And is it feasible?

The Board of Regents needs to set tuition holistically, across all public universities, in order balance students’ needs with institutional interests. Sadly, sometime universities act like “Cookie Monster” — they gobble every dollar then can, and then ask for more. Since funding doesn’t equate with quality education, students can get hurt.

Based on the January 2011 report on University of Wisconsin tuition, published by the Legislative Fiscal Bureau, it certainly seems that the Legislature can act to change this rule without the NBP. As author Emily Pope writes, “tuition typically supports only the “instructional” portion of the UW budget. Instructional costs include faculty salaries and fringe benefits, which comprise the largest portion of instructional costs, supplies and services, administration, libraries, student services, and support costs. Exceptions to this occurred in the 1997-99, 1999-01, and 2001-03 state budgets, when the University was allowed to use tuition revenues to support the unfunded portion of the compensation plan for faculty and academic staff, which included compensation increases for faculty and academic staff whose time was spent on activities other than instruction.”

The italics are mine. If exceptions have been granted to allow tuition revenue to be used for compensation, why couldn’t it be used for financial aid?

Now, I admit– I am not an expert on these kinds of rules. I am simply hoping someone will read this and explain it to all of us.

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On a different but related issue:

Why is it that the NBP does not include language comparable to this language in the Board of Regents current tuition policy?

GPR financial aid and graduate assistant support should “increase at a rate no less than that of tuition” while staying “commensurate with the increased student budget needs of students attending the UW System.” In addition, support should
also reflect “increases in the number of aid eligible students.”

That’s called tying aid to tuition…

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