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The University of Iowa is an educational institution– and much more. It’s a $1.6 billion enterprise with roughly 15,000 employees. Through the University’s teaching and research, the faculty, staff, and students contribute to the knowledge base on which our future quality of life and economic prosperity depend. The University produces educated citizens for the workforce of Iowa and throughout the world. A central and highly leveraged component of funding for this educational enterprise is student tuition.
Tuition payments for the University’s undergraduate, graduate, and professional students produce about 9 percent of the University’s total revenues. Appropriations from the State of Iowa are a little more than double that of tuition and together with tuition form the core support of the University. The University also is awarded research grants and contracts from outside governmental, business, and industrial entities–last year this was $260 million. This also provides opportunities for undergraduates to participate in research experiences–something to which President Coleman is strongly committed. Finally the University is composed of many supporting entities that contribute to the overall educational mission, such as the University of Iowa Hospitals and Clinics, Men’s and Women’s Athletics, Student Housing, and the Iowa Memorial Union. Vice President and Treasurer Douglas True is heavily involved in financial aspects of the University. Parent Times asked True and other administrators to describe how tuition dollars are spent and how tuition revenue relates to other sources of revenue in achieving the educational experiences sought by University of Iowa students. Q. Let’s start with tuition. Where does it go? A. The first thing you should know is that about $19 million from tuition revenues goes directly back to students in the form of financial aid. The University of Iowa has a long-standing commitment to increase student financial aid in proportion to tuition increases. The remainder of tuition revenues is combined with state appropriations in the General Education Fund and supports the core educational expenses of the University. Q. What sorts of expense items would come out of tuition? A. The General Education Fund amounted to almost $400 million in fiscal year 1999-2000. State appropriations and tuition revenue were almost entirely the sources of this amount. These dollars support faculty in the classrooms and laboratories as well as maintenance of our academic buildings and libraries, purchase of instructional equipment, and utilities such as heat, lighting, and air conditioning. A substantial portion of the General Education Fund supports salaries of those who are engaged in the education of our students. The University is dependent on the state to fund these salary expenses; however, to the degree it does not, the amount of tuition revenue available for quality education initiatives is diminished. Q. This year, an increase in the amount of tuition for both in-state and out-of-state students was authorized. What happens when tuition is increased? Do students have any input in that decision? A. Students are involved in the decision. It is important to note that the Board of Regents, State of Iowa sets tuition for The University of Iowa each fall after listening to student input at two successive monthly board meetings. Prior to the board considering tuition policy, the President and others within the University administration interact and consult with student government leaders to listen to their concerns and to discuss the ways in which tuition can be used to advance educational goals of the students. Likewise, after tuition policy is set, the University administration is committed to work with student leaders to communicate how the entire General Education Fund is spent. A couple of months ago a full-page ad was placed in the Daily Iowan identifying the uses of the General Education Fund dollars and the initiatives that had been proposed and would be initiated. Student government and the University’s administration cosponsored this ad. Q. Why did the University request tuition increases this year? A. Part of the increase covers inflation. The Regents increased tuition by 4.3 percent with 2.3 percent as a result of inflation costs. The remainder, 2 percent this year, is intended for improving the quality of instruction and other academic benefits for students. However, the degree to which the University can maintain this commitment is a function of the state support the University receives. Q. The Board of Regents, State of Iowa, also approved a new fee to support student services in lieu of paying for these services from tuition. Can you explain the University’s objectives? A. The University had been supporting a number of non-academic student activities and services from tuition revenue. These included student government-sponsored activities, recreational services, Cambus, and the Iowa Memorial Union. In keeping with practices at other Big Ten universities, the proposal approved by the Regents was to create a separate fee for these services and to redirect tuition revenue to support academic programs of great value to students. With these redirected funds, President Coleman is committed to increasing the library’s operating hours, enhancing the instructional equipment budget, increasing student financial aid, and establishing a program to improve students’ writing skills and writing experiences throughout the curriculum. Q. Are we the lowest in the Big Ten in fees, too, as we have been for years in tuition? A. Yes, we are, and some others are substantially higher than The University of Iowa. The University of Illinois charged $1,146 in fees in 1998-1999, the last year for which figures are available. In that year, the University of Minnesota charged $616 and the University of Wisconsin charged $406. Our fees were $202 in that year, and with the fee proposal recently approved by the Regents, the University will remain the least costly in the Big Ten. Q. It’s beginning to sound like a tradeoff. You pay more in tuition and fees elsewhere, but you gain access to newer technology and buildings and more educational advantages. A. It is a tradeoff, but the University offers a very high value to its students. The University of Iowa strives continuously to maintain the balance between affordable tuition and accessibility to students versus the demands of our constantly changing learning environment and competition from the best higher education institutions in the United States. Historically the University has been extraordinarily efficient and the State of Iowa has been helpful by supporting appropriations for the University General Education Fund, enabling the University to achieve what it could not with tuition alone. However, there are limits to the University’s ability to prosper through educational efficiency alone. While the University continues to attract world-renowned faculty, it is increasingly difficult to stave off the attempts by other universities to attract our distinguished faculty with promises of greater salaries, larger equipment budgets, and more space that is better equipped. This is our challenge and it is one we must meet. Q. What about private funding? We are just in the early phases of a comprehensive fundraising campaign for The University of Iowa. A. Private funding is increasingly important to state universities like The University of Iowa. President Mary Sue Coleman is aggressively promoting private funding and spending considerable time communicating to donors what the University can do with private support. While the central, vital educational support for the University remains state appropriations and tuition, the contributions of generous donors allows the University to achieve a level of excellence that is otherwise unattainable.
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