UNIVERSITY BILLING STATEMENT PROPOSAL
UCF ANALYSES, UNINTENDED CONSEQUENCES, AND UNRESOLVED ISSUES
Submitted by
Provost Terry Hickey
for
President John C. Hitt
March 3, 2004
EXECUTIVE SUMMARY
The proposed policy requires a detailed bill for individual students that details the actual cost of the student’s education and how state funding and other sources are being used to meet that cost. A detailed costing system that would facilitate such a cost allocation does not exist at the university. An aggregate system would not provide any meaningful data for an individual student. With regard to the requirement to identify amounts of state funding and financial aid provided, it is not clear how detailed this identification must be.
The time between the approval of this policy and the required review and approval process is insufficient to permit the development of the detailed costing system and integration of the reporting system with current information systems. At UCF, the problem is exacerbated by an ongoing software upgrade.
The proposed policy seems to be more of an accountability measure than one of providing value for an individual student. If a student had the information, there would be no change in the student’s educational activities. The development and maintenance cost of a comprehensive system will be significant. It does not seem to be cost-beneficial and is not supported as proposed.
UNIVERSITY BILLING STATEMENT PROPOSAL
UCF ANALYSES, UNINTENDED CONSEQUENCES, AND UNRESOLVED ISSUES
The Governor’s 2004-2005 budget proposal includes a proposed policy on university billing statements. The purpose of this review is to examine how the policy could be implemented at UCF and what expected outcomes might result, including any unintended consequences, either positive or negative, for students and for the university. The proposed policy follows:
University Billing Statements
“All students who are charged tuition and fees must receive a tuition bill which clearly identifies the amount of funding paid by the state on the student’s behalf to reflect the true costs of the student’s education and identify the entities which are bearing that cost. State funding to universities and state student financial aid shall be itemized. The Board of Governors shall review and approve a sample of each university’s bill format prior to August 15, 2004.”
Issues
There are several issues associated with the proposed policy that must be considered. The issues are
· identification of the “true cost” of a student’s education
· determine the level of identification of supporting entities
· isolation of state funding sources and state student financial aid
· proposal review process and timeline
· implementation process and impediments
The issues are addressed separately below.
Identification of the true cost of a student’s education
Because the proposed policy focuses on an individual student’s bill, it is necessary to determine the cost of that individual student’s education. For a given semester bill, does that mean the cost of the courses being offered that semester or the total cost of education? Because it is a semester bill, it seems reasonable to assume that the intent is to focus on that semester’s cost.
One might try to determine the cost of education by major, but this will be insufficient to deal with an individual on a semester basis. Clearly, there are significant cost differences by discipline (e.g., English vs. Business.) If one were interested in the cost per course, you would need to know the direct instructional costs such as the instructor’s salary and benefits, cost of student assistants, and cost of laboratory assistants. In addition, you would need to know the indirect instructional costs such as computer and communication infrastructure, departmental support, classroom facilities, and laboratory equipment. If you could determine these costs for a given course, you would need to determine the cost per student. Obviously, this depends on the number of students enrolled in the course. Finally, you would need to know the support costs that include all other university operations such as advising, institutional research, registrar, building maintenance, grounds, and library, and have a means of allocating those costs to individual courses or to individual students. Allocating these latter costs would require additional information about the student. For example, a student who is a campus resident may properly have different costs than one who lives off-campus (e.g., more police protection, food service facilities, housing-related costs not covered by the housing fee.)
Using these cost factors, two students enrolled in different sections of a course taught by the same instructor could have different costs simply because there are a different number of students enrolled in the two sections. Similarly, two students enrolled in different sections of the same course (with the same enrollment) could have a different cost because they had different instructors. Even if instructors have the same base salary, they will likely have different benefit costs that have to be included.
The discussion above indicates the difficulty in computing the cost per course when the instructor and the number of students enrolled in the course are known. Of course, enrollment is not known until the end of add/drop and the instructor is frequently not finalized until shortly before the class begins. Therefore, it is impossible to have an accurate representation of the cost of the course in a bill that is provided to the student.
To develop these kinds of cost estimates, it would be useful to have a fully developed activity based cost (ABC) system. However, this kind of system remains an elusive challenge for universities.
Alternatively, it may be acceptable to estimate an average cost for delivering a course. The existing SUS expenditure analysis may have an approach that could be modified to estimate course costs. However, such a system does not currently exist within the university.
In presenting a bill to a student, there will be an interesting reaction by non-resident students. Currently, we estimate the cost of an undergraduate FTE (40 hours) at $7,225 per year using the SUS expenditure analysis. The matriculation and non-resident fee ($67 + $350 = $427 per credit hour) translates to $17,080 per year for one FTE. This suggests that non-resident students are paying nearly 2.4 times the actual cost of their education.
Determine the level of identification of supporting entities
If one had the appropriate cost system, there are different entities that incur expenditures on behalf of the students. One aspect of the proposed policy that is not addressed is how refined this identification must be. Are E&G or student fees sufficient descriptions, or do we have to be specific about the source of the student fees or the E&G funds (e.g., general, proviso, initiative)? If more detail is required, the universities will have to develop a means of identifying which kinds of fees do what for particular students. This exercise will not be trivial.
Isolation of state funding sources and state student financial aid
The proposed policy requires that state funding to universities and state student financial aid shall be itemized. We assume that this is intended to address the level of state funds and financial aid that is applied to the tuition bill. This requires that the level of identification described above be resolved. It is not clear what kind of state financial aid is included. For example, does the Florida Prepaid College Program fall into this category? There is a need for additional clarification of what is required, and how it applies to an individual student.
Proposal review process and timeline
The proposed policy requires that each university’s proposed bill be reviewed by the Board of Governors by August 15, 2004. We expect that this review would occur at the July FBOG meeting. In order for the UCF BOT to review the proposed university bill at a meeting, it would have to be presented at the UCF BOT May meeting. If the proposed legislation becomes law, it is likely that it will happen after or too close to the May UCF BOT meeting to permit development of such a billing system. Because of the magnitude of the work involved, it may not be prudent to invest those resources on an uncertain requirement.
Implementation process and impediments
Implementation requires clarification and resolution of the many issues presented above. If the conclusion is to develop a high-level costing system, such a system will present little information of real value to individual students. The system, which will be costly to develop and implement, should not be developed unless it will be useful.
The most difficult part will be development of the detailed costing system and relating costs to individual students.
If a costing system were developed, it will require a substantial investment to create and populate the system with appropriate data. Such a system would need to be integrated with the existing PeopleSoft enterprise software system that currently generates tuition bills for students. Because the university is upgrading PS V.7.6 to PS V.8.0, no programming modifications to the existing version are currently allowed. All programming efforts at UCF are focused on version 8.0 that will not be on line until fall 2004. This is a substantial impediment to implementation of a new billing system.
University Billing Statement Summary
The proposed policy requires a detailed bill for individual students that detail the actual cost of the student’s education and the amount of state funding and other sources that are being used to meet that cost. A detailed costing system that would facilitate such a cost allocation does not exist at the university. An aggregate system would not provide any meaningful data for an individual student. With regard to the requirement identifying the amounts of state funding and financial aid provided, it is not clear how detailed this identification must be.
The time between the approval of this policy and the required review and approval process is insufficient to permit the development of the detailed costing system and integration of the reporting system with current information systems. At UCF, the problem is exacerbated by an ongoing software upgrade.
The proposed policy seems to be more of an accountability measure than one that provides value for an individual student. If a student had the information, there would be no change in the student’s educational activities. The development and maintenance cost of a comprehensive system will be significant. The proposed policy does not seem to be cost-beneficial and is not supported as proposed.
EXCESS CREDIT HOURS PROPOSAL
UCF ANALYSES, UNINTENDED CONSEQUENCES, AND UNRESOLVED ISSUES
Submitted by
Provost Terry Hickey
for
President John C. Hitt
March 3, 2004
EXECUTIVE SUMMARY
The review of the proposal to require boards of trustees to “establish policies which require students who are in excess of the number of hours needed to graduate by more than ten percent or who are not enrolled as degree-seeking to pay the out-of-state fee per credit hour” provides a compelling argument not to support this proposed policy. In particular, the proposed policy proposes the same remedy for two very different issues that should not be considered together when establishing a policy.
The review examined undergraduate excess hours at UCF in detail. The number of credit hours taken above 110% of the number required for graduation ranged from 3.9 to 5.2 depending on the type of student (native, community college transfer, or other transfer). These values are lower than the SUS average for all types of students. At UCF, these excess hours correspond to approximately 642 undergraduate FTE. Applying the non-resident fee to the excess hours would increase the total cost of a degree by 18% to 47% (based on the total matriculation fee for the catalog hours). We do not know what behavior changes might be induced by an average increase of this magnitude. It is likely that some students will not complete a degree because of the cost.
On the second issue, the review examined the types of students who are enrolled at UCF but not seeking a degree. The 241 Florida resident undergraduate non-degree students (0.7% of all Florida undergraduates) include all of the dual-enrolled high school students (whose tuition is paid by the school district), transient students, and some students who are enrolled for personal development. One group of Florida resident graduate students includes 311 students (5% of graduate students) enrolled in 68 graduate certificate programs. These programs provide a focused, advanced education (typically 3-4 courses) that meet particular job needs for the metropolitan area workforce. The third group includes 1,026 post-baccalaureate students (16% of graduate students) who are in teacher certification programs, and are applicants to doctoral, specialist, master’s, and certificate programs who are taking courses while awaiting completion of their application paperwork (usually official transcripts), and some students who are taking professional enrichment courses, many of whom are teachers. All of these non-degree seeking students are in legitimate educational activities consistent with the metropolitan mission of UCF. Many of these students will be in a degree status at some time. Florida residents who are high school students taking college courses, teachers pursuing certification, and students waiting on paperwork to be processed should not be charged a non-resident fee. If a non-resident fee is imposed, all graduate certificate programs should be treated the same as full degree programs.
Based on this analysis, the proposed policy as structured is not supported. The university is opposed to applying a non-resident fee to all non-degree seeking students under any circumstances. If the excess hours policy is adopted, we recommend that it be applied only to excess hours generated at the institution at which the excess hours were earned. In terms of implementation, we recommend that, if the policy is adopted, it initially be applied using a 115% threshold in order to determine what behaviors can be influenced while still encouraging students to complete the degree program.
EXCESS CREDIT HOURS PROPOSAL
UCF ANALYSES, UNINTENDED CONSEQUENCES, AND UNRESOLVED ISSUES
The Governor’s 2004-2005 budget proposal includes a proposed policy on excess credit hours. The purpose of this review is to examine how the policy could be implemented at UCF and what expected outcomes might result, including any unintended consequences, either positive or negative, for students and for the university. The proposed policy follows:
Excess Credit Hours
“University boards of trustees shall establish policies which require students who are in excess of the number of hours needed to graduate by more than ten percent or who are not enrolled as degree-seeking to pay the out-of-state fee per credit hour.”