The University of Oregon is planning to increase its student body by 3,000 students over the course of eight years in order to increase tuition revenue to cover a $16.7 million deficit in the university budget.
According to Jamie Moffitt, the UO vice president for finance and chief financial officer, these budget increases come from a reduction in state funding and increases in fees for PERS, the state retirement fund.
The growth plan is hoped to help the university cover these increases without having to resort to “tremendously high tuition increases” or job cuts, Moffitt said.
“We try to keep tuition increases as low as we possibly can, but we’re not going to sacrifice the excellence of the University of Oregon,” said Roger Thompson, vice president for Student Services and Enrollment Management.
The projected budget for 2019 has gone up by 3.2 percent and is likely to continue increasing.
Each year for the next eight years, the student body will increase by 50 to 400 students, according to the growth plan. The slow addition of students will allow for the university to create more classrooms and hire more faculty to accommodate this increase.
In January, the university launched new programs to attract more students to UO. For example, a new program called “flight crew” sent texts to admitted students welcoming them to the university.
A new recruitment tool, “UO 360,” used virtual reality technology to allow admitted students and their families to experience campus without having to travel to Eugene, Thompson said.
Increases in tuition
The Board of Trustees approved a three percent increase in resident tuition and a 2.5 percent increase in nonresident tuition at its meeting last March after the university presented budget shortfalls.
The presentation also stated that if the university increases resident tuition by five percent and nonresident tuition by three percent, the overall tuition revenue would increase to $11.4 million and would reduce the budget shortfalls.
This would mean an annual increase of $475 for residents and $976 for nonresidents.
However, if the increase occurs, the university will still have a gap of $3 million to cover budget increases.
“You’re still only generating $11.4 million, nowhere near the $16.7 million,” Moffitt said.
The university plans to cover leftover costs through lobbying for more state funding and making more budget cuts.
Lack of state funding
UO has one of the lowest amounts of state funding in the country. Between 2011 and 2012, the state appropriation budget decreased from $65 million to $45 million, according to Moffitt.
UO students, administration and staff lobbied in Salem in May 2017 to increase state funding in order to reduce the university’s tuition increases.
Moffitt said she encourages students to join the conversation and work to increase state funding.
“The PERS Problem”
The other major contributor to the increase in university fees is the state-mandated retirement plan that UO must pay into — the Public Employees Retirement System, or PERS.
The university has to pay money to PERS to pay for state employees’ retirement funds, Moffitt said.
However, PERS has been raising their fees every two years in order to grant all the state employees the retirement funds they promised them due to lack of funds.
PERS increased its fees by $7.1 million in 2018 and is expected to increase by $9 million by 2020, totaling $15 million in retirement costs alone, Moffitt said.
“This is what’s really really impacting everything. This is an issue for all of Oregon. K-12 schools, state agencies, everybody is looking at these cost increases,” Moffitt said.
The university will make further budget cuts and lobby for more state funding to make up for this deficit.
Nationally, UO is average among peer institutions for resident tuition and slightly above average for nonresident tuition.
Raising tuition beyond the national average is concerning because it may turn prospective students away from UO, Moffitt said.
“I think the most important thing for people to know is we really are trying to look at every possible solution to this. It’s a very challenging situation,” Moffitt said.