October 15, 2007
President Wilson convened the second SPBC meeting of 2007-2008 at 12:00 p.m. He began by commenting on an emergency alert to students over the weekend regarding an assault and robbery of an IWU student. A report on the incident is being sent to parents, students, faculty, and staff in order to keep everyone informed and to reinforce campus safety measures.
The President asked if there were any questions concerning the meeting minutes of September 24. Trustee Emeritus John Jordan asked if the names of committee members needed to be included in the minutes. Trustee Ron Ruecker said it was a good idea to provide names because it provided context to the comments and questions. The Committee agreed and then approved the minutes for distribution.
Turning to the lone agenda item, a discussion of the tentative proposal for IWU's 2008-2009 tuition and fees, President Wilson emphasized that he welcomed input and advice from campus constituencies. President Wilson said that any increase in the fee structure would be approved at the October meeting of the Board of Trustees. He also added that it was important to establish the fees for the 2008-2009 academic year in order to make the information available as soon as possible to prospective students. The President then asked Vice President for Business and Finance Dan Klotzbach to present the materials, which were distributed to the Committee before the meeting.
Vice President Klotzbach touched upon the factors related to the establishment of IWU's tuition rates: institutional needs and objectives, economic conditions, and what IWU and other institutions have done historically in the way of adjustments. Based upon these factors, the administration has developed a budget that assumes a comprehensive fee increase of no more than 5.32% for the 2008-2009 academic year. The precise increase will be established later in the fall once more thorough analysis of anticipated expenses has been completed.
Vice President Klotzbach provided comprehensive fee information for a traditional comparison group, which included both public and private institutions. Additional information compared IWU tuition and fees with peers in the Associated Colleges of the Midwest and the top 60 institutions in the 2008 edition of US News & World Report's America's Best Colleges. Vice President Klotzbach also noted that the fiscal year 2006 discount rates were added to some of the comparison groups. An institution's discount rate is calculated by dividing total institutional grant aid by gross tuition and fee revenue. IWU's fiscal year 2006 rate was 36%. President Wilson noted that, in general, a discount rate under 40% was a sign of health.
Members of SPBC were invited to comment on the proposed tuition increase. Professor Tom Streeter asked if the University had ever considered a funded scholarship approach. President Wilson replied that the Promise Scholarship Awards, an item in the impending campaign, are examples of funded scholarships. The awards would eliminate the gap between student need and what IWU can currently provide in financial aid and would fulfill the University's promise to meet 100% of student need.
Trustee Ruecker asked if the University had ever considered a four-year flat tuition rate for incoming students. President Wilson replied that this was never seriously considered, since a flat rate would have to be significantly increased from our current fee structure in order to anticipate changes in cost over time. Overall, this tactic in higher education has not been successful. Trustee Ruecker then asked about the impact of tuition on recruiting and whether we lost students because of cost. President Wilson mentioned that we recently employed an external agency, Human Capital, Inc., to provide detailed analyses and predictions concerning where and at what cost IWU should be recruiting students. They have examined IWU's profile of students and are able to apply that profile to various cities to determine student recruitment potential. Dean of Enrollment Management Bob Murray would be happy to provide a report to the SPBC on the work being done in this area. The President also noted that today's prospective students and parents are very sophisticated about pricing in higher education. Professor Paul Bushnell was pleased to note that the University had not lost any ground in terms of keeping its fees close to the competition, despite the financial challenges over the past few years.
On another note, Professor Streeter asked if President Wilson would explain a comment he made at a recent CUPP meeting that 'we're not out of the woods yet.' The President explained that although we were no longer taking an additional draw from the endowment, the budget remains tight. In order to balance the budget this year, $1.2 million had to be found to replace a comparable amount in last year's budget that constituted the additional draw. Furthermore, now that the additional draw has been eliminated, the University needs to make some secondary adjustments for issues like deferred maintenance and May Term. Trustee Kathy Lewton added that there are many areas that lack investment, especially those that are non-campaign related such as an alumni relations program, the identity assessment, and communication-based initiatives.
Trustee Ruecker asked what percentage of the University's tuition dollar is fixed versus variable in terms of the financial effect of enrollment differences. Vice President Klotzbach explained that most University expenditures are fixed and spread out among the disciplines. It would take a large number of students to make a difference, as there is not much in the way of variable costs.
Student Senate President Kelly Petrowski asked if the room and board rates would be lower if more students lived on campus. President Wilson explained that that we are near capacity now and that the answer to her question would have to look not only at room capacity but also at the capacity of related services such as Sodexho.
Trustee Jordan stated that he thought the proposal was terrific, and that the University is in an excellent position price-wise -- not too cheap and not too high. He also said that the issues of quality and quantity discussed this afternoon are very big challenges, and that it will be five to ten years before we'll understand the effects of the campaign. President Wilson added that in order to improve and grow, some of the resources can come from tuition revenue, but not all. In addition, items funded by the campaign will allow for a redistribution of funds to other items of importance.
Before adjourning, President Wilson asked the Committee if it was in general agreement regarding the proposed comprehensive fee increase, along with an understanding that the SPBC and other groups would be consulted before the final levels are set. The Committee concurred.
Distributed to faculty and staff: 11/19/2007