1. INSTITUTIONAL FINANCE ADHE Tuition Policy

2. Tuition Policy Policy established in October 1981 by the Coordinating Board Tuition and fee adjustments should be based on established goals for the state’s share and the students’ share of the cost of education. The current policy continues to represent desirable goals but they are no longer relevant. Declining state support has increased the student share beyond the percentage limits established. To more accurately determine institutional need, the tuition and fees applied in the formula must more accurately reflect the tuition and fee revenue collected.

3. Current Policy The current tuition and fee policy states: Undergraduate tuition and fees at four-year institutions and two- year institutions with no local tax should be approximately 25 to 30 percent of the average cost of education. Rates at two-year institutions with local tax support should be approximately 15 to 20 percent of the cost of education For 2008-09 the students’ share of the cost of education for two- year institutions averaged 36.7 percent and averaged 47.8 percent for four-year institutions.

4. Income By Source 36.75% Paid by Students 47.78% Paid by Students $7,686 $12,862

5. Recommendation The following revisions to the Tuition Adjustment Policy are recommended: Undergraduate tuition and fees at four-year institutions should be approximately 40 to 45 percent of the average cost of education. In-district rates at two-year institutions with local tax support should be approximately 30 to 35 percent of the cost of education. Tuition rates at two-year institutions without a local tax should be higher than those for institutions with a local tax by the average amount that the revenue from the local taxes provides per FTE student in those institutions with a local tax.

6. INSTITUTIONAL FINANCE Distance Delivered Education Funding Policy

7. Growth in Distance Education Low Tuition rate at Arkansas Institutions Limited resources for funding higher education will be focused on increasing the number of Arkansans with degrees. Growth in Credit Hours by non-Arkansas residents

8. Distance Delivered Education Funding Policy In view of the preceding, ADHE Staff recommends: Proposed Funding Policy: Distance education whether delivered by online instruction or other multimedia methodologies shall be fundable when delivered to Arkansas residents within or outside Arkansas or to non- Arkansas residents within Arkansas. Distance education delivered to non-Arkansas resident students outside the state of Arkansas shall not be fundable and the credit hours produced shall not be included in the funding formulas used to determine the funding needs of institutions.