Dear Students, Faculty, and Staff:

I think I ended my last message to you by stating that I’d be writing to keep you informed about the unfolding fiscal situation so we could differentiate rumor from fact. Unfortunately, we’re already starting to see some confusion and misrepresentation out there about next year’s tuition increases, so I wanted to clarify where things stand and what we do and don’t know at this point.

First, despite what you may have read, we have NOT made any tuition decisions for next year. Colorado State University doesn’t make decisions about issues like tuition and budget cuts without significant opportunity for members of our campus community to weigh in and be heard. We are following our typical budget process, which has already included discussions with ASCSU, Faculty Council, Cabinet, the Council of Deans, and the Board of Governors of the CSU System. These discussions will be on-going throughout the year and will include other employee groups. I’m scheduled to brief the Student Senate on the 20th of this month. The process will include our open Planning & Budget Hearings in January, our Budget Open Forums in March, and will conclude with our Board’s passage of an official budget after the General Assembly sets funding levels for higher education during the spring.

As part of this process, we’ve developed a skeleton budget for next year that reflects the multiyear plan we’ve been implementing to prepare for the loss of federal ARRA stimulus funds and avoid the budgetary “cliff” we would have faced had we not reduced our spending gradually over the last couple of years. As some of you may recall, when the state decided to backfill its severe budget cuts to higher education over the last two years with stimulus money, we had a choice: We could either assume that the state would find a way to restore those funds to higher ed once the stimulus money ran out, or we could use the stimulus funds as a bridge while we stepped down our budget to absorb the full reduction. We took the second course, which has forced us to make tough cuts the last few years but helped us avoid the cliff that other organizations are now facing. This hasn’t been easy: During fiscal years 2010-2011 and 2011-2012, CSU will have seen a $30M cut in state support — about 23% of our state funding.

In the meantime, the Colorado legislature passed SB-03 last spring, recognizing that state colleges and universities have been hit hard by the state’s budget crisis and need the flexibility to increase tuition to deal with reductions in public funding. Under SB03, campuses can raise tuition up to 9% without legislative approval, and if they need to raise tuition higher than that, they have to file a “financial accountability plan” with the Colorado Commission on Higher Education.

Our skeleton budget for FY12 builds on our past budget approaches, anticipating that we will deal with the loss of the remaining ARRA funds via additional cuts and with the up-to 9% tuition increase (an additional $237/semester for a full-time resident UG) allocated to us by Senate Bill-03.

But, given recent state revenue projections showing that the state may be facing an additional $40M hole, we now know the state will be looking at even deeper budget cuts. The Colorado Commission on Higher Education, Joint Budget Committee of the legislature, and all three gubernatorial candidates have talked about this issue and all recognize that higher education is the largest, unprotected portion of the state’s budget pie. Some projections show higher ed funding cut an additional $55M, roughly $11M of which would come from CSU.

Further complicating the situation — and the source of today’s confusion — is that the implementation of SB-03 requires colleges and universities to submit their potential tuition/”financial accountability” plans to the state during October, far in advance of any knowledge about what the state’s funding for higher education will look like. This means that, lacking any solid information, we have had to develop and submit a tuition plan that would cover all possible budget possibilities — both what we hope for and realistically expect and our worst-case scenarios. This actually isn’t new for CSU; we’ve made it our practice to plan for the worst and hope for the best, but we typically try not to trumpet our worst-case projections as if they’re a done deal.

They’re not. But we do have some tough financial challenges ahead. If CSU were to lose an additional $11 million or more beyond what we’ve already projected, we have very limited ways to maintain educational quality. We would examine deeper cuts, and we would also need to take a hard look at pricing and tuition.

One option under consideration and discussed in the “financial accountability plan” we submitted is closing the credit hour gap. CSU’s full-time tuition rate is only 10 credit hours — at UNC, CU-Denver, Mesa State, Metro, and even CSU-Pueblo, it’s 12 credit hours. At Colorado School of Mines, it’s 15; CU-Boulder, 11. If we stop discounting the cost of a CSU education, close that gap, and bring CSU into alignment with other Colorado schools, it would cost our students an additional $525 per semester (the 20% increase that’s been reported; $288 per semester more than the 9% base tuition increase afford under SB03). Right now, if we did this, we could deal with a potential 24% additional cut in state funding while limiting additional cuts to the university to the 10% range and asking our employees to go a 4th year without salary increases.

That’s one option — there are many others, and all of them are up for discussion.

Let’s be clear, we know that any change like this means an increase in cost to the people writing tuition checks, no matter what we call the plan. Whether the increase comes from closing the credit-hour gap or a straight tuition increase, it’s still more money out of pocket for our students. This is not what any of us want, but it’s the reality we face in a time when the state has significantly reduced its support for public higher education — individual students wind up paying more of the cost. Still, we hope to keep resident undergraduate tuition lower, and we also plan to limit non-resident tuition increases to the 3% range and graduate tuition increases to the 5% range based on market factors. We plan to continue to push financial aid and are very committed to preserving access, but we’re also aware of confusion among some students and parents who worry that the cost of access is driving our tuition increases. For the record, I want to make it clear that financial aid costs are not what’s driving up tuition; tuition is going up because the state has cut the money it gives CSU to operate. Our new Commitment to Colorado program, for example, is largely federally and privately funded, and CSU-funded scholarships and financial aid account for only about 8% of the total assistance our students receive.

We’ll have a lot of opportunity to discuss and debate all these issues over the coming months. The bottom line is that there will be much more discussion and much more communication before any recommendations are made regarding tuition increases for next year, and there will be no attempt to surprise or disguise any increases in the cost of attendance. Given the dire state of Colorado’s budget, we can expect that tuition will rise, but all of us at CSU are well-aware that a lot of our students and their families are struggling — and that’s not something we take lightly. Despite the challenges, our goal must be to preserve a high-quality CSU education — at a reasonable price — and that will be our focus throughout this budget process.


Dr. Tony Frank