Desperate for money after years of budget cuts from the state, universities are increasingly turning to out-of-state and online students to bring in more revenue.
Through a pilot market-rate tuition program, universities are able to charge different tuition rates for online and continuing education master's degrees and certificate programs. In most cases, this means a higher tuition rate than what was charged before. Money from this tuition is used to help support other college or university programs.
University presidents say they want the power to set market-rate tuition for more than just online and continuing education programs in the future, citing a need to bring in more money and offer tuition closer to the national average. After years of budget cuts from the state and strict limits on tuition increases, many universities say they are crippled in their ability to recruit and retain faculty, cope with growing enrollments and maintain campus buildings.
"What we seem to find is market-rate tuition is working well," said Tico Perez, the chair of the State University System Board of Governors' Budget Committee. "It allows universities to benefit and put that money back in play, oftentimes in those other graduate categories. We are going to get creative as budgets get tighter."
This year, five universities want to offer 17 master's degree or certificate programs that will charge market-rate tuition with a total price tag ranging between $11,000 and $57,600, generating about $27.5 million in extra revenue for these universities over the next several years, according to documents submitted to the state university system.
The State University System Board of Governors approved these market-rate tuition proposals Thursday, and during that same meeting several university presidents and board members said they would be open to expanding market-rate tuition to other graduate and undergraduate programs, citing a need for more "flexibility."
But the political reality of persuading lawmakers, who have tuition-setting powers, to expand market-rate tuition will be difficult. Legislators are reticent to deregulate tuition, though at least one influential lawmaker, Rep. Bill Proctor, R-St. Augustine, who leads the House Education Committee, said he was open to greater tuition hikes.
The head of the Senate's higher education budget committee is less sure.
"I don't think we are there yet," said Sen. Evelyn Lynn, R-Ormond Beach. "They'd have to convince us. Right now we are very concerned with increasing tuition as it is."
Currently, tuition increases at state universities are capped at 15 percent each year overall.
The degree programs approved Thursday under market-rate tuition include an online Master of Arts in Communication at the University of Florida which will be offered at $28,050, double the tuition currently charged for the bricks-and-mortar version at $14,103. But documents provided by UF show that other universities -- such as the University of North Carolina -- charge between $19,800 and $35,100 for a similar online degree.
University of Florida Provost Joe Glover said the university would have pushed for market-rate tuition even without the deep budget cuts. But "there is no doubt that it is an important auxiliary revenue stream and that as state funding is shrinking it becomes another source of revenue that we use to support the university," Glover said.
The argument is that since universities are increasingly competing nationally for students in online and continuing education programs, they should be allowed to offer tuition that matches their national competitors. Last year, universities got approval to offer market-rate tuition for 17 degree or certificate programs.
Implemented last year through a pilot program, universities are able to offer up to five online or continuing education degrees through market-rate tuition each year, contingent on approval by the Board of Governors.
Prior to approving market-rate tuition rates last week, the Board of Governors quizzed university officials as to whether the tuition charged is appropriate and honed in on the wisdom of University of Florida's decision to use an outside company to manage and market some of its new online programs.
Perez said market-rate tuition was intended to be used only when there was huge demand.
"What we are starting to see is 'to heck with responding to demand, we are going to create demand somewhere,'" Perez said when pressing UF on its decision to hire an outside company.
But Glover said that it wasn't creating demand. "We are not trying to create demand through the use of this company," Glover said. "The demand is there."
Glover said in an interview before the meeting that market-rate tuition can actually help keep money "in the state."
"One of the advantages is it increases the revenue stream," he said. "Another point, strangely enough, is that it actually keeps revenue in the state. There are a large number of universities in this state from out of state who are charging market-rate tuition and all that revenue flows out of the state."
Not all universities use market-rate tuition to increase the cost of some online and continuing education programs. At Florida State University, the school proposed lowering the cost of obtaining a master's degree in criminal justice or a master's degree in instructional systems. FSU said by slashing its tuition for these programs in half it will attract many more out-of-state students and bring in more money for the university.
"Charging a market-rate tuition will allow the college to market our online master's program to nonresidents at a nationally competitive rate," FSU said in documents submitted to the board.
