1. Overview of Finances and Academic Costs Cost of Education Committee December 9, 2010

2. Agenda Tuition and Fee Setting Process Appropriations & Budget Cycle Timeline Higher Education Funding UTPA Operating Budget Tuition and Fees (including “Total Academic Cost”) Financial Aid Availability Challenges

3. Tuition and Fee Setting Process

4. Tuition and Fee Setting Process (cont.)

5. UT System Guidelines Institutions submit proposals for 2 years at a time during a major cycle and one year at a time in a minor cycle. Focus on total academic cost (average paid by a Resident Undergraduate Student for 15 hours) Promote predictability of academic costs for students and parents Identification of cost savings

6. 6 Which changes are eligible in a major cycle? “Everything”  Justification for existing fees  Fees for new degree programs or requirements  Changes to courses affected by existing fees (subject to Executive Vice Chancellor review)  Designated Tuition  Mandatory Fees

7. 7 Which changes are eligible in a minor cycle? Justification for existing fees Fees for new degree programs or requirements Changes to courses affected by existing fees (subject to Executive Vice Chancellor review) In general, changes which impact total average academic cost are not eligible for update in a minor cycle. The current COEC session is in a minor cycle.

8. Appropriations, Budget, and Tuition & Fee Cycle Timeline 8

9. Legislative Appropriations Request (LAR) Submitted prior to each legislative session Outlines goals; expenditures, requests and performance measures Opportunity for “Special Line Item” requests By tradition, requests for bond projects entertained every other year Institutional hearings with Legis. Budget Board (LBB) and Governor’s Office of Budget Planning (GOBP)

10. 10 Legislature Receives input from the Coordinating Board Uses the LBB bill as a starting point SFC, HAC and Ways & Means Committees Fiscal notes via LBB Conference committee

11. 11 82 nd Legislature – Hot Topics Redistricting Continued Cuts in State Funding Formula Funding Changes TEXAS Grants Tuition Set-Asides

12. 12 Appropriations Bill Not like other bills that modify statutes Sections  Various articles for; general government, judiciary, public safety and criminal justice, etc.  Article III = Education  Article IX = general provisions & contingencies Funding  Special Line Items (GR)  Formula (both GR and E&G income) Instruction and operations Infrastructure support  Teaching experience supplement  Health insurance

13. 13 Higher Education Funding - Background State appropriations are not keeping pace with needs. The percentage of the budget funded by State General Revenue (GR) has steadily declined since FY 2000 (currently 24.5%). Formula Funding Appropriations per Full-Time Student Equivalent (FTSE) has declined by 19.6% since FY 2001 after adjusting for inflation. Trend toward viewing higher education as a private good instead of a public good Unlike community colleges UTPA does not receive property tax revenues

14. 14 Resources Available to UTPA State Appropriations Formula Funding Incentive Funding Special Line Items Tuition Revenue Bond (TRB) Payments Student Tuition and Fees Statutory Tuition (E&G) Graduate Differential Tuition (E&G) Designated Tuition (Designated) Mandatory and Other Fees Transfers From THECB: TEXAS Grants, Top 10% Scholarship, etc. Pass-Through: UTEP’s Border Consortium, UTSA’s SBDC, etc. HEAF

15. 15 Resources Available to UTPA (cont.) Designated and Auxiliary Sales Revenue Educational Activities Housing and Meal Plans Facility Use Parking Revenue Indirect Cost Reimbursements Restricted Funds (e.g., Grants, Gifts) Investment Income Fund Balances

16. 16 Formulas Instruction & Operations (matrix) SCH X Factor X rate Liberal arts = 1.00 (base) Infrastructure support (uses space projection model) 1. Teaching space Level and program areas of an institution’s funded semester credit hours 2. Library space Faculty, students, approved programs, and holdings 3. Research space Research expenditures and students’ reported semester credit hours 4. Office space Faculty, staff, and current fund E&G expenditures 5. Support space A percentage of the total prediction for all the other factors Fall 2009 deficit was 460,314 sq. feet (313,979 sq. feet was in Teaching Space). The deficit has increased every year since Fall 2005 when it was only 180,617 sq. feet.

17. 17 HEAF Higher Education Assistance Funds (est. 1984) Funds can be used for: land, equipment, library materials, constructing and renovating buildings, debt service HEAF vs. PUF (Permanent University Fund) 1986-1995$2.9M 1996-2000$8.6M 2001-2005$6.0M 2006 & 2007$8.5M 2008$12.9M 2009 & 2010$13.2M 2011$12.3M UTPA Allocations ►

18. 18 Which Funds are Formally Budgeted? Budgeted Educational and General Designated Auxiliary Enterprises Restricted Plant Funds Non-Budgeted Loan Endowment & Similar Funds Agency

19. 19 Where Does UTPA Get Its Operating Funds? 2011 Operating Budget (Unadjusted* Total = $305.7M) State Appropriations$72.8M23.8% Tuition & Fees$98.5M32.2% Sales, Services, Auxiliary, Other$13.7M4.5% Sponsored Programs-Federal$73.9M24.2% Sponsored Programs-State$27.0M8.8% Sponsored Programs-Local$2.5M0.8% Investments & Gifts$4.9M1.6% Interagency Contract$0.3M0.1% HEAF$12.3M4.0% Transfers and Balances-$0.1M0.0% *Official budget total after adjustments for tuition discounting, capital outlay, debt principal, and depreciation = $263,854,770.

20. Where Does UTPA Spend Its Operating Funds? 2011 Operating Budget (Unadjusted* Total = $305.7M) Instruction$88.8M29.0% Academic Support$18.3M6.0% Research$6.7M2.2% Public Service$7.6M2.5% Institutional Support$21.3M7.0% Student Services$14.3M4.7% Oper & Maint of Plant$20.2M6.6% Scholarships & Fellowships$90.9M29.7% Auxiliary Enterprises$16.2M5.3% Debt Service$12.4M4.1% Capital Outlay$9.0M2.9% *Official budget total after adjustments for tuition discounting, capital outlay, debt principal, and depreciation = $263,854,770.

21. 21 Tuition and Fees Statutory Tuition & Lab Fees (E&G) Designated Tuition (Designated) Mandatory Fees Academic Advisement Fee (Designated – undergraduates only) Information Technology Access Fee (Designated) International Education Fee (Designated) Library Support Fee (Designated) Medical Service Fee (Designated) Registration Fee (Designated) Utility Fee (Designated) Recreation Fee (Auxiliary) Student Service Fee (Auxiliary) Student Union Fee (Auxiliary) Incidental Fees

22. 22 Tuition Rates at UTPA per Semester Credit Hour Academic Year Designated Tuition Statutory Tuition Fall Headcount 1999-2000$22$3812,571 2000-2001$22$4012,761 2001-2002$26$4213,640 2002-2003$26$4414,392 2003-2004$32$4615,915 2004-2005*$38$4817,030 2005-2006$46$5017,049 2006-2007$63.15$5017,330 2007-2008$79.15$5017,435 2008-2009$87.70$5017,573 2009-2010$97.00 ($101.70 Graduate) $5018,337 2010-2011$106.09 ($110.79 Graduate) $5018,774 *Designated Tuition was deregulated starting with Fall 2004 (FY 2005).

23. Total Academic Cost - Definitions 23 Total academic cost is the sum of all tuition (statutory tuition, designated tuition, and board-authorized, if applicable), mandatory fees, and academic- related college and course fees. Academic-related college and course fees are fees required of all students enrolled in a given college, program or course. Examples of charges not included in total academic cost are housing, meal plans, parking permits, and various other optional fees.

24. Academic Charge Rates at UTPA (Resident Undergraduates) 24 HC = Headcount; SCH = Semester Credit Hour

25. Total Average Academic Costs at UTPA (Resident Undergraduates taking 15 Hours) 25 Fall 2009Fall 2010Fall 2011 Statutory Tuition $ 750 Designated Tuition 1,358 1,485 1,615 Mandatory Fees 604 614624 Average College/Course Fees 52 55 Total $ 2,764 $ 2,904 $ 3,044 Increase ($) $ 140 Increase (%) 5.1%4.8%

26. Total Average Academic Costs at UTPA (Resident Graduates taking 9 Hours) 26 Fall 2009Fall 2010Fall 2011 Statutory Tuition $ 450 Board Authorized Tuition450 Designated Tuition9159971,081 Mandatory Fees403410416 Average College/Course Fees5671 Total $ 2,275 $ 2,378 $ 2,468 Increase ($) $ 103 $ 90 Increase (%) 4.5%3.8%

27. 27 Tuition & Fee Rankings (15 hours, Fall 2009) Includes Tuition, Mandatory Fees and Average College and Course Fees 1The University of Texas at Dallas $ 4,915 2The University of Texas at Austin 4,468 3Texas A&M University 4,343 4The University of Texas at Arlington 4,272 5University of Houston 4,163 6The University of Texas at San Antonio 4,023 7Texas Tech University 3,910 8University of North Texas 3,859 9Texas State University - San Marcos 3,741 10Prairie View A&M University 3,610 11Texas A&M University at Galveston 3,593 12Stephen F. Austin State University 3,405 13Lamar University 3,313 14Sam Houston State University 3,237 15Midwestern State University 3,225 16The University of Texas at Tyler 3,213 17Texas Southern University 3,201 18Texas Woman's University $3,154 19The University of Texas at El Paso 3,144 20Angelo State University 3,069 21Texas A&M University - Corpus Christi 3,067 22Texas A&M University - Kingsville 2,970 23University of Houston - Clear Lake 2,914 24West Texas A&M University 2,902 25The University of Texas of the Permian Basin 2,875 26Texas A&M International University 2,849 27Tarleton State University 2,835 28The University of Texas at Brownsville 2,806 29Texas A&M University - Commerce 2,778 30The University of Texas - Pan American 2,764 31University of Houston - Victoria 2,747 32Sul Ross State University 2,667 33University of Houston - Downtown 2,624 34Texas A&M University - Texarkana 2,323 Source: Texas Higher Education Coordinating Board: Tuition & Fees Data (THECB) available at www.txhighereddata.org. www.txhighereddata.org

28. 28 Financial Assistance Set Aside A portion of the designated tuition charges are set aside to provide need-based financial assistance for resident students. Actual and estimated set-asides are as follows: FY 2010 Actual FY 2011 Budget FY 2012 Projection Undergraduates*$4,143,066$4,704,988$5,432,682 Graduates324,901358,397409,738 Total$4,467,967$5,063,385$5,842,420 Increase ($)-$595,418$779,035 Increase (%)-13.3%15.4% * One fourth of the undergraduate set aside amount is used for B-On-Time loans.

29. 29 Financial Assistance funded by Tuition Set Asides Funded with Designated Tuition Set Aside: UTPAdvantage Program UTPA Assistance Scholarship Summer Grants Work-study Program Scholarship Matching Programs B-On-Time Loan Funds Graduate Student Tuition Assistance Grant Funded with Statutory Tuition Set Aside: Texas Public Education Grant (TPEG)

30. 30 Financial Aid Awards FY 2006FY 2007FY 2008FY 2009FY 2010 Grants $46,030,714$50,861,903$57,628,181$64,537,265$85,810,414 Scholarships 8,274,8739,582,81810,274,515 $9,924,675$10,252,706 Work-study 2,277,5502,159,4052,297,359$2,359,684$2,358,992 Exemptions/ Waivers 5,320,2375,933,1126,628,913$6,391,596$ 6,706,071 Loans 29,735,55033,802,36934,385,001 $41,440,825$43,135,401 Total $91,638,924$102,339,607$111,213,969 $124,654,045 $148,263,584

31. 31 Challenges  State appropriations are not keeping pace with needs  Shift in cost towards the students and families  Financial aid funds  Tight margins  Debt capacity near maximum  Space deficit  Land and construction needs  Facilities maintenance  Economic uncertainty  Low academic cost  Pressure to restrain tuition and fee rate increases

32. 32 Contact Information UTPA Budget Office website: www.utpa.edu/budget/ Email: Budgetoffice@utpa.edu