Ted Simons: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. For the first time in two decades, the Arizona board much regents voted to freeze tuition for in-state undergraduate students at ASU. The board approved a steep tuition hike in recent years to offset large cuts in state funding, In-state tuition at ASU will now stay at just over $9700 a year, still a 96% increase from 2007. Here to tell us how the Universities are holding the line on tuition this year is Glen Nelson, the chief financial officer for the Arizona board of regents. Good to have you here. Thanks for joining us. So how was this accomplished?
Glen Nelson: Well, there was a lot of hard work that the University presidents put into looking at the budgets for next year, attaining, is this good fiscal management, looking for appointing -- operating efficiencies they can attain. And just concern for the residents of Arizona and trying to keep tuition as affordable as we can.
Ted Simons: And now for graduate students and out of state students they'll see an increase, correct?
Glen Nelson: Slight increase at approximately 3%.
Ted Simons: And why was that?
Glen Nelson: Graduate students, the graduate student population as well as the nonresident population, those prices are normally set via market -- more of a market-based pricing model. We have to be careful it doesn't price individuals out of the market but it does recover the costs and it is competitive with other programs.
Ted Simons: The U of A also has a tuition freeze but something else happened as far as a rebate is concern, so there will be added costs.
Glen Nelson: There will be an added cost, last year the regents approved a tuition increase at the U of A, but at the same time institute added $750 rebate per in-state undergraduate student. And that was to draw down reserves the U of A had built up. So rather than putting those dollars somewhere else, the decision last year was to rebate that to the students. The rebate is now gone away, the institution is drawn down some of those reserves, so those students will see an increase although the published rate will not increase.
Ted Simons: NAU, 9% increase for incoming students, but that's locked in that’s for all four years? Correct?
Glen Nelson: That's for all four years, and I believe it's only 5%.
Ted Simons: Good. How long can a tuition freeze last? What does the future hold?
Glen Nelson:That's a really good question. I think there's several factors. First of all, the stresses that the University are under right now are unprecedented. We're not going to compromise on the issue of quality. But at the same time, our funding levels are 50% less than what they were on a per student basis just in 2008. And so how long can we sustain this? I'm not sure. That would be a great question for the three University presidents. I'm sure they would tell you they've squeezed almost as many dollars out of their infrastructure as they can. One of the items that was brought up last week was at Arizona State University, the cost of a four-year degree, to deliver that degree is less than half of what state university of New Jersey cost is. And so we're already attaining a number of operational efficiencies, so the question is, how much more of those efficiencies can we garner without the state kicking in more dollars? We're happy to see Governor Brewer wanting to invest those dollars.
Ted Simons: Indeed. I was going to ask you to compare what's happening in Arizona with other states other regions. In terms of budget cuts, in terms of tuition hikes.
Glen Nelson:In both of those we're leading the nation. If we aren’t leading the nation, we're number two or three. If you look at the last three or four years. It's really a sad state of affairs, but at the same time we understand the stresses that the Arizona economy is going under. We're part of that community and we realize we have to take part in that, and we're doing what we can to at least reduce the expenditures.
Ted Simons: Last question, we've talked on the program about something called performance-based funding. It's an idea that's getting some traction, I know it's an objective as far as higher education communities is concerned. What is it, what's the status?
Glen Nelson: Performance based funding was the third of our three primary goals from the board this year. The first being funding the college of medicine in downtown Phoenix, the second being dealing with disparity funding. Performance funding is, you -- the state don't invest any more money in us than what we produce. In other words, we have targets to increase the number of graduates, to increase the people that we can put into the economy to help start the economy, to help our economy grow, and in doing so, we achieve -- if we achieve those metrics, you the state will invest more in us. So if we don't achieve the metrics, we don't get additional funding.
Ted Simons: I mentioned traction on this. How much traction?
Glen Nelson: Well, as I mentioned, it's one of the three goals the board has had, and it's also one of Governor Brewer's objectives for higher education, and currently as you know, the budget is still in negotiation between the legislature and the governor's office, and we'll just have to wait a couple weeks to see where that falls.
Ted Simons: But no wait as far as the tuition freeze at ASU is concerned the kids know exactly what they'll pay next semester and it’s the same as this semester.
Glen Nelson: Exactly.
Ted Simons: Good to have you here. Thanks for joining us. We appreciate it.
Glen Nelson: Thank you, Ted.