Although the LA GRAD Act was originally intended to function as a benefit to universities that met certain graduation requirements, it’s more of a burden than a reward for improving performance, higher education leaders say.
Colleges and universities that meet the GRAD Act’s performance goals are granted authority to raise tuition by up to 10 percent, allowing schools to bring in more revenue, which leaders thought would be a reward of sorts for improving performance.
However, when the 2014 fiscal year budget was proposed, the same amount of money institutions could earn from the act had been removed from their respective general funds, which leaves the University further from where it started.
For LSU A&M, a 10 percent tuition increase would produce an expected $25,485,000. This price tag, however, is not the amount of money that would actually go toward students’ education because the University can only collect about 80 cents of every dollar it receives because of scholarships and among other programs that cause students to pay slightly different amounts to the school.
“The legislature just said, ‘Well, if they’re getting the increase in tuition, we’re going to take out the same amount,’” said Council for a Better Louisiana President Barry Erwin. “So it doesn’t look like a cut. They’re using the tuition as a way to keep from having to cut the budget further, but it’s still a cut.”
The 2014 fiscal year executive budget protects funding to campuses and features no change in total funding for higher education schools, Michael DiResto, assistant commissioner for policy and communications within the Division of Administration, said in an email.
Erwin said although the budget does not appear to have received a cut, the tuition swap is still a cut, regardless of what others might say.
“The reality is that despite doing that, things are going on like increased mandated costs, increased retirement and healthcare costs,” Erwin said. “Even though it looks dollar-for-dollar when you’re taking a certain amount and adding a certain amount, it doesn’t cover those increased costs the universities must underwrite.”
Vice Provost for Academic Affairs Gil Reeve said the University has analyzed the graduation rate data and is in the process of submitting a report that will determine if the University will meet the GRAD Act standard.
“Our analysis is that we’re going to meet the standard for the GRAD Act and earn our autonomy,” Reeve said.
Reeve said earning this autonomy would allow the University to raise tuition in the fall, although no decision has been made yet.
“We have to be granted the authority and then have to make the decision to do so,” Reeve said.
Although the University has not officially raised tuition by 10 percent, the budget assumes the University will make that move to produce the funds. If the University does not raise that money by increasing tuition, it would essentially be even more of a cut, said Director of External Affairs Jason Droddy.
“Students should expect a 10 percent increase in their tuition to offset these budget cuts,” Erwin said. “In most schools you’ll see the 10 percent being added if they hit their GRAD Act target.”
Students should get used to the reality of taking on a greater role in paying for their education while the state assumes less responsibility every year, Erwin said.
“According to Board of Regents documents, in fiscal year 2006-2007, state support for higher education for four-year schools was 67 percent, and the student portion was 33 percent. Now that’s totally flipped. Right now, the state pays 34 percent and students, technically self-generated funds, are at 66 percent,” Erwin said. “Basically you’ve gone from two-thirds one way to two-thirds the other way. And this is a fast turn-around.”
LSU System CFO Wendy Simoneaux said this use of the GRAD Act is contrary to the act’s original purpose.
“The GRAD Act was not meant to supplant state support. It was meant to give our institutions more funding,” Simoneaux said. “We thought the intention would be to help, but this funding method is really contrary to the intent. Why they did that and who did that, you’d have to ask them.”