AdministrationCover Story

UO tuition almost doubled in the last decade. What does that mean for the future?



Frustrations finally boiled over. Students holding signs saying, “When will the price be right?” and “Silenced again,” marched out of the Board of Trustees meeting March 4 in an act of defiance against University of Oregon administration.

“We’re not willing to work with you if you’re not willing to work with us,” ASUO Finance Director Shawn Stevenson said before he led students out of the board meeting.

This was the last effort of ASUO and supporting students to prevent tuition from going up 4.5 and 4.7 percent for resident and nonresident students respectively. After they left, the Board of Trustees passed the tuition hike 11-3.

Resident student tuition at UO has increased 80 percent over the last 10 years. In 2006-07, annual resident tuition was $5,970. Next year, it will be $10,771.

This is the second year in a row students protested against tuition hikes at a board meeting. With no clear end to this yearly frustration, the future raises a swarm of questions.

ASUO finance director Shawn Stevenson speaks to the Board of Trustees on March 4. (Samuel Marshall/Emerald)

ASUO finance director Shawn Stevenson speaks to the Board of Trustees on March 4. (Samuel Marshall/Emerald)

The financial future for graduates

Vickie Gimm, a UO student, took the Board of Trustees’ stage during the time allotted for public comment and read dozens of testimonies from other UO students.

“I am a student who is below the poverty level and can’t afford a tuition increase like this,” read one testimony. Other students voiced similar concerns: Raising tuition would make it harder or impossible to stay at UO.

But on average, students who take on more student debt tend to be more capable of paying off their loans, said UO associate economics professor Benjamin Hansen, who specializes in education and cited national research. Just 18 percent of those borrowing more than $100,000 default on their loans, as opposed to 34 percent of those borrowing under $5,000.

“The real problem with student loans isn’t really the amount of student debt people have,” Hansen said in an interview before the Board of Trustees meeting, “It seems to be more of an issue of what income they have when they graduate.”

More than half of the money from tuition increases goes toward funding research and hiring more tenure-track faculty. Hansen sees this as an effort to provide students with a better education so they can graduate sooner and be placed into higher-income jobs. According to a 2014 study published by the American Community Survey, Americans with bachelor’s degrees earned an average of $50,515 over a 12-month period compared to $27,868 for those with just a high school diploma.

The Board of Trustees meeting discussing a possible University of Oregon tuition increase took place at the Ford Alumni Center in Eugene, Oregon on March 4, 2016. (Samuel Marshall/Emerald)

The Board of Trustees meeting discussing a possible University of Oregon tuition increase took place at the Ford Alumni Center in Eugene, Oregon on March 4, 2016. (Samuel Marshall/Emerald)

Hansen thinks students should look at debt as an investment. Though debt affects him as a young professional still paying off loans, Hansen looks at the wider issue.

“The average person that ends up with like $200,000 in student loans might be a dentist or doctor,” Hansen said. “They would view that as a necessary expense to get the training that they needed. They would get a high enough income where they could afford those loans.”

Student loans are the best kind of debt to have, Hansen said, because of the time frame. Hansen’s student loan interest rate was about 5 percent, and his loan payments are tax deductible, something he takes advantage of.

“[Five percent] is pretty much the same interest rate as my mortgage,” Hansen said. “So I should be in no more of a rush to pay my student loans off than I am to pay off my mortgage on my house.”

If Hansen lost his income and job, the bank wouldn’t grant a deferment period for paying off his mortgage, but the government would allow that for his student loans. Hansen said that, if anything, he is in more of a rush to pay off his mortgage because of this.

“I’ve put student loans on the longest repayment scheme that I possibly can,” Hansen said.

The financial future for UO

President Michael Schill addresses the Board of Trustees and others on March 4. (Samuel Marshall/Emerald)

President Michael Schill addresses the Board of Trustees and others on March 4. Schill believes raising tuition is the only sustainable solution to reaching the university’s goal. (Samuel Marshall/Emerald)

UO President Michael Schill said the financial situation at UO is not going to get better anytime soon. Obligations from the Public Employee Retirement System go into effect in UO’s budget in 2018, adding an estimated $6-8 million to the university’s expenses.

The projected budget for 2018 is $26.5 million compared to $17.5 million in 2016, according to Vice President of Finance and Administration Jamie Moffitt, who gave a presentation on the budget situation at the board meeting.  

But the board can’t keep pushing those costs onto students, said Kurt Willcox, a trustee who represents university employees who aren’t teachers or students.

Kurt Willcox, non-faculty staff representative, speaks to the Board of Trustees on March 4. (Samuel Marshall/Emerald)

Kurt Willcox, non-faculty staff representative, speaks to the Board of Trustees on March 4. Willcox suggested the university look to other sources to help fund next year’s budget. (Samuel Marshall/Emerald)

Willcox believes that money can be allocated from other sources besides students in the future. He wants to use $2 million from $76 million worth of Unrestricted Net Assets — resources that may be used at the discretion of the president’s office and not the Board of Trustees. He proposed finding creative ways to draw some money from the $1 billion in the UO Foundation’s assets and employing funds from $200 million worth of private donations.

Willcox said that although the UO Foundation’s assets are restricted, they are the ones that can “solicit and find the money.” He supports a number of state legislative initiatives to address the problem.

President Schill strongly disagreed.

“It is irresponsible to say, ‘Let’s just take a year and hope and pray that there’s a valid initiative that’s successful and helpful,’ ’’ Schill said.

Ann Curry speaks to the Board of Trustees during the Board of Trustees meeting on March 4. Curry was one of three trustees to go against the rest and vote no on the tuition hike. (Samuel Marshall/Emerald)

Ann Curry speaks to the Board of Trustees during the Board of Trustees meeting on March 4. Curry was one of three trustees to go against the rest and vote no on the tuition hike. (Samuel Marshall/Emerald)

Ann Curry, William Paustian and Willcox were the only ones to vote in favor of this alternative plan against 11 other trustees.

“If we don’t try and push and stretch some of the resources we have, we’re not going to be in a position where we can impact the tuition arrangement,” Willcox said after the meeting.

The future of rising tuition

Hansen said forecasting tuition increases is a challenge, but he predicted tuition may continue to go up at UO. In the job market, the value of a college education has gone up. That means graduates are able to earn higher salaries than in previous years. It also means that more people will be pursuing college degrees, and as the demand for college goes up, so will tuition.

“The value that’s attached to a college degree is higher than ever,” Hansen says, “If that value keeps on going up, that does tend to put upward pressure on the demand for education.”

For Willcox, the proposed “A Better Oregon” initiative is the best hope to stall tuition hikes. The measure would impose a gross receipts tax on large corporations. He says that the money gained from that measure could be used to fund higher education, lowering tuition increases. The first step is getting the measure on the ballot in November, something he believes is likely.

He fears the consequences of not taking that kind of action.

“We’re going to have to go back to tuition and keep raising it and raising it,” Willcox said, “That’s not sustainable.”

Students protesting the tuition hike on March 4. (Samuel Marshall/Emerald)

Students protesting the tuition hike on March 4. (Samuel Marshall/Emerald)


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