Legislative letters to Córdova indicate higher scrutiny for universities
>>Print ViewPublication Date: 11/20/2009
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As institutions of higher education come under greater scrutiny for dramatic tuition increases, one Indiana legislator likens dealing with institutions like Purdue to dealing with a child.
State Rep. Jeff Espich, R-Uniondale, is one of two legislators who penned personal letters to Purdue President France Córdova this year expressing opposition to any tuition increases for the 2009-2010 academic year.
In the letter, dated May 27, 2009, Espich wrote: “I must say that I am terribly bothered by the idea that any tuition increase is even under consideration, period. I would argue that instead of waiting for the General Assembly to set university budgets, our universities should be seeking creative ways to ensure that tuition rates will not increase and that a college education will remain affordable for Hoosier students.”
Sen. Mike Delph, R-Carmel, also sent a letter to Córdova voicing opposition to a tuition increase. Delph’s letter was dated July 7 – after the state legislature had passed Indiana’s biennial budget June 30, and six days before the Purdue Board of Trustees ratified 5 and 6 percent tuition increases for in-state and out-of-state students respectively.
“I call upon each university president, administration and board of trustees,” Delph’s letter reads, “to use your collective brainpower to contain and reduce costs rather than generate new revenues through additional fees and tuition hikes during such difficult times.”
Although Córdova and trustee chairman Keith Krach said the advice in both letters was taken into account, the tuition increase was passed, including a $500 new-to-campus fee, bringing tuition increases for students new to campus to 11.5 percent.
It was a move that set off a chain reaction of events that will likely bring consequences for institutions like Purdue in the next budget cycle.
REVENUE SHORTFALL
It is a dire time for the state of Indiana. With October tax collections $46 million less than forecast, Gov. Mitch Daniels predicts the state’s reserves will be depleted by August 2010.
As a result, Daniels has asked state agencies to cut 10 percent from their budgets. Purdue has been tightlipped on its plans to cut further costs, electing to postpone any talk of its plans until the President’s Forum later today where, according to Delph, the University is set to make a “big announcement” regarding fiscal management concerns.
Earlier this month, Córdova said in an e-mail to The Exponent that “the reductions directed by Governor Daniels on Friday do not directly impact Purdue.”
Executive vice president for finance and treasurer Al Diaz released a similar statement through associate vice president of external relations Chris Sigurdson, adding, “We’re watching the state revenue situation very closely and taking the shortfall very seriously.”
In light of the economy, it’s Espich and Delph’s opinion that a tuition increase could not have come at a worse time and that universities have not done enough to trim costs.
“I was telling them back a year ago that, in my opinion, with economic conditions the way they were that they ought to hold their tuition growth to zero,” Espich said. “It’s unconscionable to have students pay for the continued growth of university budgets.”
COMMISSION OF HIGHER EDUCATION
To quell intense pressure from legislators regarding tuition increases, Purdue announced a series of rebates, including a full $500 rebate for 2009-2010 and, after further prodding from legislators, a $250 rebate for 2010-2011. As a result, state legislators and Purdue administrators are in agreement that public universities such as Purdue and IU will face intense scrutiny in the coming years.
One way this might occur is possible legislation to increase the power of the Indiana Commission of Higher Education – a state group created in 1971 that charges itself in its mission statement with defining “the educational missions of public colleges and universities.”
Knowing tuition increases were an area to watch, legislators granted the Commission increased authority over higher education institutions. Tuition rates were required to be set for a two-year period and required a public hearing to allow students and university community members to voice their opinions of the proposed increases. The Commission was also charged with issuing “tuition targets,” or suggested maximum increases of which Purdue’s target was a maximum 5 percent increase.
But despite this new authority, the Commission is still an advisory body with no enforcement authority. Higher education commissioner Teresa Lubbers said the only incentive to meet the target was that “there was an especially high level of scrutiny for any university that exceeded the target.”
Purdue’s in-state increase met the target, but the additional $500 fee for strategic plan improvements caught the eye of an already alert General Assembly.
“It was a red flag to legislators to scrutinize Purdue’s budget more carefully,” said Lubbers, who spent 17 years in the state Senate before being appointed commissioner earlier this year. “I think any of these mandatory fees are going to be more scrutinized in the future.”
PURDUE’S RESPONSE
The University responded to both Espich and Delph’s letters July 22 with two nearly identical letters that were both signed by Córdova and Krach. The letters cite additional financial aid and a $23 million reduction in recurring state operating appropriations as further justification for the increase.
For Espich, who had penned his letter two months prior to receiving the response letter, the University’s response was unsatisfactory.
“I didn’t think much about (Córdova’s) response letter,” Espich said. “A two-month-old response to my suggestion is pretty feeble under any circumstances.”
Purdue’s response cites the salary freeze, suspension of merit bonuses and a 2 percent reduction in the overall budget as examples of cost cutting, but for Espich it’s not enough.
“I don’t think universities have tried to be efficient in the way other areas of the government have,” Espich said. “In Purdue’s case, a 17 percent tuition increase over two years – that’s just nuts, to be blunt about it.”
Purdue’s response to legislative pressure of rebating part of the $500 fee was likewise met with skepticism by some members of the legislature. July 28, the State Budget Committee told both Purdue and IU, which had implemented a 4.6 percent increase, to go back to the table and reconsider. To calm the concerns of legislators, both universities took drastically different approaches.
Sept. 1, Indiana University president Michael McRobbie announced an incentive grant for in-state undergraduates who maintain a 3.0 GPA. Students who receive the grant would have the 4.6 percent tuition increase offset to a 1.5 percent increase. Sept. 8, Purdue announced it would rebate half of the $500 fee for the 2010-2011 year in addition to the full rebate for 2009-2010.
“Indiana University was very cooperative,” Delph said during a Nov. 16 interview. “Unfortunately, I don’t feel we’ve benefited from the same sort of partnership with Purdue.”
At that time he attributed what he viewed as Purdue’s lack of cooperation to “the arrogance of the administration of Purdue University,” and said the administration is “completely out of touch with what ‘Main Street’ Indiana is going through.”
Nov. 19, Delph took back his comments, saying a phone call from one of the Purdue trustees had given him additional information that he had not had when making those statements.
“He (the trustee) called me and said I just think we have a communication issue because the information you were relying upon is outdated,” Delph said. “He also told me that when President Córdova took over they found some things going on they’re trying to correct. That’s going to lead to a big announcement they’ll be sharing tomorrow. I’m cautiously optimistic they’re on the right track.”
Purdue trustee Bill Osterle said he was the one to call Delph and explain the actions Purdue has taken. He said Delph was not aware of the additional rebates of the $500 and was glad Delph was “now on board.”
“He was under the impression IU had gotten a resolution and Purdue hadn’t,” Osterle said.
For Espich, however, Purdue’s rationale for fee increases is not enough.
“I’ve heard all their arguments,” Espich said. “How they have to maintain the competitive advantage and all that. I’ve heard it all and it doesn’t matter to me.”
Espich said the Commission for Higher Education’s increased role is a positive step to holding institutions like Purdue more accountable.
“That was the first time the Commission had been charged with setting some parameters,” Espich said. “They didn’t have that before and it was done in response to what was happening with tuition growth. Eventually we may get to the point it needs to become more than goals – it needs to be absolute.”
Espich and Delph both agreed that legislation issuing a tuition cap would not be the best option, but if things continue it may be the only resort.
“I think it would be far more preferable for universities to do that themselves,” Espich said. “But it’s kind of like a parent disciplining a child. If they don’t behave, if you will, it’s going to have to become (accomplished) at the state level.”