TUITION BRIEFING
Courses of higher education should be available for
all those who are qualified by ability and attainment
to pursue them and who wish to do so.
-- The Robbins' Principle, UK, 1963
The Tuition Environment
Student tuition and ancillary fees have been frozen in British Columbia for
a six year period beginning in 1996/1997. During this time, the Provincial
Government's base operating grant per full-time equivalent student (FTE),
measured in constant dollars, has decreased by 3.5 percent (Attachment 1) while
the number of FTE at Simon Fraser University has increased by 12 percent. Last
year, the freeze was accompanied by a government-mandated five percent
tuition rollback with only partial compensation provided to the University.
In the national context, Canadian universities have absorbed a 25 percent
reduction in levels of support over the past 20 years, contrasted with a 27 percent
increase in the United States. Looking at revenue-per-student comparisons
across Canada, calculated as the sum of the operating grant plus tuition, BC
universities lag well behind comparable institutions elsewhere in the country.
With respect to revenue-per-student calculations at SFU since the tuition freeze
was instituted, the University has dropped from fifth to 11th place within its
national comparison group of 18 universities. This loss of position places SFU
more than $800 below the Canadian average revenue-per-student while the
University's undergraduate tuition is 44 percent below the national tuition
average (Attachment 2). Also at 44 percent below the national average, graduate
tuition is virtually the lowest in Canada (Attachment 3).
This revenue inequality places SFU at a competitive disadvantage in
crucial areas such as faculty recruitment and retention where pressures
surrounding retirement vacancies are intense. Driven by the professoriate's
unique demography across North America, 1200 faculty across BC reach
retirement age over the decade ending in August, 2009. Between now and 2009,
approximately two hundred retirements will occur at SFU alone out of a current
faculty complement of 670 occupied positions. Early retirements and
resignations are projected to add 850 additional vacancies across the BC system
and SFU will suffer its proportional share.
Failure to attract and retain the highest quality faculty, staff and students
in the volatile environment of competitive recruitment will have more than a
short-term effect on the University's reputation and academic quality: it will
condemn the institution to a long-term future of mediocrity. If SFU is to regain,
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and subsequently maintain, its ranking as Canada's premier comprehensive
university, the institution must find the competitive resources needed to expand
research capacity, enhance the educational experience, attract the best students
and offer them the assured quality they deserve, sustain salaries, provide market
differentials where needed, and supply new faculty recruits with start-up funds
at a level equal to its competitors.
The Rationale for a General Tuition Increase
Over the period of the freeze, many indicators show a decline in
instructional quality and educational access:
•
Only 56 percent of lower division course sections were taught
by members of the faculty complement in 2000/2001, with the
rest taught by part-time sessional instructors whose teaching is
generally not informed by active research programs.
•
Lower division class size for the Spring and Summer semesters
has risen by 15 percent during the period of the freeze.
•
The number of undergraduate course sections offered has
decreased while the number of FTEs seeking course access
has grown.
•
The average class size has increased by 8 percent.
•
The grades required for BC Grade XII direct admission to nonscience faculties has risen from 75 percent in Fall 1996 to 78
percent in Fall 2001. Comparable figures for college transfers
have risen from 2.5 GPA to 3.0 GPA.
•
Expenditures per FTE on student services have declined to the
extent that SFU dropped to last place in the Maclean's ranking
for the percentage of total operating expenditures allocated to
student services.
•
The number of FTE librarian positions per undergraduate
student has declined by 18 percent and the number of library
journals purchased per undergraduate has decreased by 25
percent.
•
Perhaps less obvious with respect to the quality of the student
experience, budget constraints have forced the University to
defer facilities maintenance estimated at $50 million and to defer
computing infrastructure development estimated at $15 million.
A choice must be made between continued quality decline or increased
tuition. The tuition proposal is based on an understanding that the University's
comparative disadvantage must be rectified, research opportunities expanded
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and the quality of the student experience improved. It is with these
considerations in mind that the tuition recommendations are designed as a first
step toward bringing tuition levels at Simon Fraser University to the national
average over the three year term set out in the government's operating grant
letter. A three year strategy also is required to allow both students and the
University to make informed financial plans.
Budget Background
Details of the University's base operating grant and service delivery
targets for the next three years were received from the Provincial Government
on March 11, 2002. Although funding across the post-secondary system will
remain flat over this period, SFU's base operating grant is projected to fall as FTE
targets rise significantly.
Fiscal Year
2002/2003
2003/2004
2004/2005
Operating Grant Annualized
Grant
FTE Increase
Per FTE
(--------------------------Including SFU@Surrey-----------------------)
$150.3 million
$151.4 million (+0.7%)
$147.7 million (-2.4%)
732 (+4.7%)
396 (+2.4%)
628 (+3.8%)
$9,000
$8,700
$8,000
Although the directions received from government assist multi-year planning,
they also reinforce a decade-long trend of deteriorating operating grant support
per FTE from a high measured in 2001 constant dollars of approximately $9,800
in 1992/1993 to a much reduced $9,000 in 2002/2003, declining further to $8,000
in the third year of the government's projection.
Adding to budget pressures at SFU, several funding commitments
provided last year have been withdrawn. These include approximately $500,000
in graduate student assistantships, $400,000 in student Work Study support and a
one-time contribution of $4.9 million toward the cost of research infrastructure.
Government funding also will be withheld for the final two years of a
provincially mandated general wage increase negotiated with the University's
faculty and admin/professional staff. As a consequence, the University must
find approximately $2.5 million this year and in 2003/2004 to meet its now
unfunded contractual obligations.
There are a number of other cost increases over which the University has
no discretion that must be absorbed without compensation. These include career
progress costs, the rising costs of insurance premiums resulting in part from the
events of September 11th, and increased contributions to cover statutory
obligations such as Employment Insurance and Workers Compensation. Quite
apart from the general effect of inflation on University expenses (14 percent over
the past six years), the legislated and rate increases alone amount to an new
budgetary claim of $1.2 million in fiscal year 2002/2003.
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Among the budget areas that are discretionary but must be funded to
maintain service levels, the University Library will require an addition to its
acquisitions budget of $800,000 simply to cope with the effects of inflation on
library materials and the weak purchasing power of the Canadian dollar.
Similarly, ongoing support costs for the new Student Information System are
estimated at $640,000 in the coming year and development cannot proceed
unless this allocation is made.
Budget Implications
The shortfall between revenues and expenditures projected in the
2002/2003 operating budget totals $8.8 million. Because the University Act
prohibits SFU from running a deficit, the options are straightforward: reduce
expenses and/or increase revenues. When determining a balance between these
alternatives, the guiding principle must be the quality impact each will have on
the University's programs of instruction and research.
Expense Reduction
Two decades ago, the University embarked on a long course of cutting
costs. With regard to general efficiencies, all academic programs and service
departments are cyclically reviewed and resources are redirected to best effect
based on the review outcomes. Since 1996/97, a three-year planning process has
been in place to help target resource allocations effectively and a Strategic
Initiatives Fund has been established to support program quality by reallocating
funds from low to high priority initiatives. Budget authority has been
decentralized to ensure that allocation decisions are informed by a first hand
experience of program needs and by an immediate understanding of how local
efficiencies can be achieved.
As a consequence of past reductions, across-the-board cuts are no longer
feasible, especially in the University's severely restricted non-salary budgets.
The remaining option is to apply vertical cuts to programs and services, but the
vertical cuts necessary to satisfy an $8.8 million deficit cannot be enacted without
a profound effect on quality. Examples follow:
•
remove 85 faculty or 191 support staff positions
•
significantly increase class size and make negative adjustments
to the student/faculty ratio
•
remove Teaching Assistant and Sessional budgets ($8 million)
•
disband the Faculty of Business Administration ($9 million)
•
disband the Faculty of Education ($9 million)
•
remove the Library acquisitions budget ($6 million)
•
remove the Scholarships, Bursaries and Awards base budget
($5 million)
Revenue Increase
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Opportunities to diversify the sources of University revenue can be
identified and should be investigated. These include:
•
•
develop new public/private partnerships
re-design cost-recovery programs to generate profits that can be
applied to core program improvements
•
expand fundraising efforts by University Advancement
•
gain additional cost-savings through energy conservation
programs
•
generate new endowment opportunities from real estate projects
such as the Finning lands and the Burnaby Mountain
Community development
•
investigate new e-learning and distance education opportunities
•
capitalize on federal funding initiatives such as the Canada
Foundation for Innovation and the new research infrastructure
program
While these sources of potential revenue can offer some relief to the
University's resource needs, they are at best supplements, not substitutes, for
base operating funds. For example, fundraising efforts have been intense over
the period of the tuition freeze with $75 million raised since fiscal year 1995/1996
and with almost $11 million of this amount used to capitalize endowments that
will provide investment income dedicated to student assistance. The annual
success of fundraising activity over the same period has quadrupled from $4.2
million to $17.5 million in 2001/2002. Nevertheless, the great majority of the
money generated has appropriately been placed in endowments that are
required by their terms of reference to direct earned income to specific purposes.
Like specific purpose funds in the provincial grant that are dedicated for facilities
renovations and repairs, this income is not available to offset salary or other
recurring costs supported by the University's operating budget.
Tuition Consultations
President Stevenson held an open meeting of the University community
on January 21, 2002, at which time he provided a briefing on the budget
modeling then underway and his prediction that tuition increases, if allowed by
legislation, would be required. Subsequently, the Provincial Government
announced its intention to repeal the Access to Education Act, deregulate tuition,
and return autonomy over fee decisions to the universities.
Following receipt of the operating grant details in early March,
consultations on the 2002/2003 budget and tuition fee options were held with
constituencies across the University. Advice was requested and received from
the Senate Committee on University Priorities (SCUP) and from the Committee
of Chairs and Directors. A presentation was made to Student Forum and the
views of the Simon Fraser Student Society were registered. Consultation with
the Employees' Council also took place and responses were received from the
bargaining unit representatives who were present.
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Before framing the tuition recommendations to the Board of Governors,
the consultation outcomes were carefully weighed and taken into account. While
some views contrary to the recommendations were received, every effort has
been made to bring transparency to decision-making.
Student Access and Student Assistance
Throughout the consultation on budget and tuition, reservations were
expressed that financial barriers should not be allowed to limit educational
access for motivated and academically qualified students. This concern can be
addressed in two ways: by examining the proposed tuition increase in relation
to the full cost of a university education and by making significant new
provisions for student financial assistance.
The Cost of a University Education
The University is committed to the principle that government should
fund public post-secondary education as a public good. At the same
time, it is recognized that private as well as public benefits accrue
from university access and degree completion. It follows that both
students and the larger community should make a reasonable
contribution to educational costs. When determining whether the
proposed tuition increase constitutes a "reasonable" private
contribution, the proposal should be put in context:
•
Today's cost of tuition, books, educational supplies,
transportation, food, accommodation and other expenses for a
full-time student living away from home and attending SFU for
two semesters is estimated in the neighbourhood of $13,000.
•
Tuition immediately prior to the freeze accounted for
approximately 22 percent of total student cost at that time.
•
Tuition fees during the freeze fell to approximately 18 percent of
total student cost (Attachment 4).
•
Tuition after the proposed increase will once again represent
approximately 22 percent of total student cost.
•
Immediately prior to the freeze, tuition fees (no premiums)
made up approximately 22 percent of the University's operating
budget.
•
During the tuition freeze, tuition fees dropped to approximately
18 percent of the operating budget by 2001/2002.
•
After the proposed increase, tuition (premiums added) will
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represent approximately 25 percent of the operating budget
(Attachment 5).
•
As it did before the freeze, tuition in 2002/2003 will amount to
less than 4 percent of the average family income in BC.
•
Undergraduate tuition fees before the proposed increase were
44 percent below the national average and after the increase will
continue to be 27 percent below the national average.
•
Graduate tuition fees before the proposed increase also were
44 percent below the national average and after the increase will
continue to be 27 percent below the national average.
Improved Student Assistance
Revenue problems over the past years have not allowed the University
to keep pace with the financial needs of economically disadvantaged
students. With the proposed tuition increase, action can now be taken
to improve student assistance. As a first step, 25 percent of the tuition
increase will be directed back to the Scholarships, Bursaries and Awards
(SBA) base budget. Through this initiative, the SBA budget will rise
from its current level of $5.2 million to $7.5 million in fiscal year
2002/2003. This increase will be supplemented by an additional
$7 million in student assistance generated through endowment
income and annual fundraising appeals.
As a second step, the Senate Committee on Scholarships, Awards and
Bursaries will be asked to investigate and make recommendations for
new student assistance programs that will blend needs-based requests
for financial support with existing academic eligibility requirements.
This request will build on the Senate Committee's recent decision to
apply half of any SBA budget increase toward bursary support, a
decision that will see the current base allocation to bursary support
doubled in the coming year.
The Rationale for Premium Fees
Higher education represents both a cost and a benefit. Higher education
can also be regarded as an investment by individual students and by the society
that subsidizes their access to learning. While educational opportunity can be
considered an end in itself, individual benefit in many instances is accompanied
by improved opportunities for future occupational advantage and higher
employment earnings. This advantage is most obvious in some professional
programs at SFU, especially Computing Science, Engineering Science and
Business Administration.
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Survey of 1996 Baccalaureate Graduates Five Years After Graduation
Simon Fraser University
Computing Science
Engineering Science
Business Administration
Median Annual Salary
$70,000
$64,000
$58,310
All Graduates
$45,680
In the same way that benefits associated with future employment
advantage can be differentiated by study program, so too can the cost of
providing those programs. These costs may be driven by factors such as
specialized equipment needs or by the competitive demand for salary
differentials necessary to attract and retain the best qualified faculty.
Another element when considering premium fees relates to student access
demand and the resources needed to expand enrollment opportunities. Where it
can be shown that premium fees foster improved access to high demand
programs, the result is at once a social good and an individual benefit for those
students who would otherwise be excluded.
Taken together, the potential for high employment returns after
graduation, the high cost of program delivery relative to other study areas, and
high access demand, make a case for premium fees. All three factors must be
present to be sufficient and the absence of any would disqualify a program from
premium fee participation. At SFU, all three factors are present in Computing
Science, Engineering Science and Business Administration. But once again the
quality requirement comes into play:
the premium fees charged students in these disciplines must be reapplied to
maintain instructional quality and to expand student access in the target
programs themselves. Without this condition, the argument for premium fees
cannot be sustained.
Premium Fees in Graduate Professional Programs
Simon Fraser University's graduate professional programs already assign
premium fees. Such programs range from the graduate diplomas in Business
and Education to the Masters programs in Business Administration and in
Publishing. Premium fees for graduate professional programs have been
applied on the understanding that they are delivered with a number of
enhancements and that they prepare students for careers offering exceptional
employment opportunities and high salaries.
The cost of program enhancements has increased substantially during the
period of the freeze, especially for graduate professional programs in the Faculty
of Business Administration. Graduate Business programs are universally
expensive to deliver at high quality, and it is the demonstration of high quality
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that builds the academic reputation needed to attract the most accomplished
faculty recruits in a competitive environment.
With a modest premium fee in place before the tuition freeze came into
effect, SFU's day MBA program has been particularly disadvantaged in relative
terms. Although ranked fourth among all full-time MBA programs nationally,
new resources are needed to increase program options and to expand access in
light of student demand -- a demand in British Columbia that so exceeds the
provincial supply of university places that the majority of BC students studying
in graduate business programs are enrolled with out-of-province institutions
delivering instruction at a distance.
Caught by the tuition freeze at a time when fees for other day MBA
programs locally, nationally and internationally were moving dramatically
upward, SFU has struggled to protect program integrity at a fixed tuition fee of
$2,500. Throughout the six year period of the freeze, the University of British
Columbia applied a fee of $6,650 -- recently raised to $28,000. A premium fee
adjustment is now required to restore financial viability for SFU's day MBA
program and to provide students with the program quality they deserve.
Continuing Quality Initiatives
Quality issues affecting the student experience need concrete action. This
is doubly so when increased tuition will see students making a greater financial
contribution to the University's operating budget. Accordingly, students
deserve tangible evidence that quality concerns are being addressed.
The operating budget will increase support for quality initiatives from
$600,000 last year to $3 million in 2002/2003. Disbursements will become part of
the operating base in succeeding years and allocation decisions will be managed
by the appropriate vice-president. The new Quality Enhancement and Strategic
Initiatives Fund will direct ongoing support to program and service
improvements of the following kind:
•
Implementing curriculum change in response to the ad hoc
Senate Committee to Review and Develop Undergraduate
Curricula.
•
Responding to changes in student enrollment demand and
increasing the number of sections taught by research faculty
•
Supporting new program development and program diversity
to provide greater student choice
•
Innovations in pedagogy and instructional delivery previously
curtailed by resource limitations
•
Student Services enhancement
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•
Student Information System enhancement
•
Cooperative Education expansion
•
Increasing Library services levels and collections, particularly in
on-line resources