After a year-long delay, Indiana University of Pennsylvania will replace its flat-rate tuition for full-time in-state undergraduates with a per-credit system, hoping to boost revenue and offer what its leader says is fairer pricing.
President Michael Driscoll said IUP faces a $15 million funding shortfall next year and that the pilot program, effective this fall, is part of a three-pronged approach to closing the dollar shortfall.
The switch to per-credit pricing being announced today has potential to boost by double digits, or beyond $1,100 a year, the tuition "sticker price" for a sizable number of IUP students, current-year data suggests. However, IUP officials said existing financial aid, plus new aid dollars generated by the added tuition revenue, will ease that burden.
They said some students will see prices decline.
In recent years, IUP and other state-owned universities belonging to the State System of Higher Education have faced state budget cuts and enrollment declines. Mr. Driscoll said IUP has curbed expenses and made strategic investments to boost its bottom line, but he added that part of the equation must involve what students pay.
"We want to make sure our students have access to the broad range of programs they need and have a high quality experience," he said in a phone interview. "The bottom line is we have to think about what we charge."
The university has argued that a per-credit system can actually reduce time to degree. Mr. Driscoll said the flat rate encourages full-time students to enroll in more courses, but not necessarily to finish them, and dropped courses can mean wasted university resources without financial penalty to the student.
He said part-time students, through higher per-credit charges, in effect are currently subsidizing full-time students who pay the same flat rate regardless of courseload between 12 and 17.9 credits a semester.
"IUP's per-credit tuition model increases fairness -- students pay for the credits they take," he said in a statement accompanying today's announcement.
Mr. Driscoll said the pilot initially could generate $4 million in additional tuition revenue annually, and eventually, about $8 million if the pilot continues.
Per-credit pricing has critics, among them the Association of Pennsylvania State College and Univerity Faculties, which represents State System professors.
In October, APSCUF President Ken Mash told the State System's board of governors that such pricing experiments approved in recent months across the system are undermining a critical part of the state-owned universities' mission: access and affordability.
Students facing higher prices will be “piling up additional debt and their families will be forced to make additional sacrifices,” he said.
The system board gave IUP the go-ahead for its per-credit experiment in January 2015, but the school postponed implementing it amid an effort by Gov. Wolf to restore sharp funding cuts imposed on public higher education in recent years.
Officials at IUP said they intend to discount the per-credit charge by 7, 4 and 1 percent over next three years to help students with the financial transition.
The school's new Academic Success Initiative (ASI) and the Need-Based Grant will continue beyond those three years to help students who meet certain criteria with financial need and reward those with good grades "who make good progress toward graduation,” IUP said in its statement.
It said the need-based grant alone could be worth up to two credit hours.
Tuition for the 2016-17 academic year will not be set across the State System for months. Currently, the in-state base tuition is $7,060 yearly for students taking between 12 and 17.9 credits. The current per-credit rate is $294.
Lacking a tuition figure for next year, or specific dollar amounts of financial aid that individuals will receive, it is hard to predict with precision the impact that the per-credit switch this fall will have on each student.
But current 2015-16 prices suggest how the pilot program could potentially affect at least the tuition "sticker price," the advertised rate before factoring in financial aid awards.
For instance, this year at IUP, 15 credits a semester is the most common academic load carried by in-state undergraduates, accounting for about 30 percent of in-state undergraduate total of roughly 9,500 students.
Currently, those students qualify for the flat full-time rate, meaning they would pay the $7,060 a year.
But if the per-credit system was in force this year, those students would have paid per credit. Even with the plan to discount per-credit rate by 7 percent, those students would have faced a sticker price of $8,203, an increase of $1,143, or 16 percent.
Based on this year's rates, about three-quarters of IUP's in-state undergraduates -- including most full-time students -- would have seen a sticker price increase ranging from about $49 to $2,510 a year depending on courseload.
That does not include any system-wide tuition increase that could be imposed later this year in Harrisburg by the board of governors.
Based on this year's rates, the yearly sticker price for the remaining in-state undergraduates -- those taking less than 13 credits each for two semesters -- would have seen yearly sticker price declines of anywhere from $41 for a student taking one credit each a semester to $497.92 for a student carrying 12 credits a semester.
IUP is one of the system's 14 state-owned universities.
Bill Schackner: bschackner@post-gazette.com, 412-263-1977 and on Twitter: @BschacknerPG.
First Published: March 28, 2016, 11:00 a.m.