COD President Robert L. Breuder Proposes Tuition Decreases
College of DuPage President Robert L. Breuder announced at the COD Board of Trustees meeting on July 17 a proposal for vote on Aug. 21 that tuition be reduced by $2 per credit hour beginning with the spring 2015 term. In addition, absent a significant risk to the institution that would emerge prior to spring 2015, he said he would also recommend no tuition increase for the entire following academic year.
Currently, tuition for the 2014-2015 academic year is scheduled to be $144 per credit hour. The $2 rollback would reduce tuition to $142 per credit hour. Last year, COD, far and away the largest and most comprehensive community college in Illinois, had the second highest tuition rate among Illinois community colleges. Approximately one third of Illinois community colleges were above the state average of $108. The average student taking 15 credit hours will save approximately $30 per semester. This tuition reduction will result in lost revenue of approximately $634,000 for the remainder of the 2015 fiscal year and $1.13 million annually in perpetuity.
"I am delighted that the Board will be in the position to offer our students this rollback in tuition," President Breuder said. "Sound fiscal management, operating this institution like a business these past five years, has made this possible."
Strong fiscal management practices have led to increased strategic reserves. The June 30, 2013, operating fund balance was $143 million or 95 percent of the College's total operating expenses. Preliminary and unaudited numbers for FY 2014 indicate that the percentage will grow to more than 100 percent of total operating expenses, which is a number that will allow COD to meet any unforeseen challenges or seize unexpected opportunities.
Should the Board decide to not increase tuition for FY 2016, the traditional $4 per credit hour, the College will lose $2.36 million annually in perpetuity. These two impending recommendations when combined will result in lost revenue approximating $3.43 million annually in perpetuity.
"We are extremely pleased with our fiscal performance this past year, despite a lingering soft economy," said President Breuder. "We have been able to offer all of our employees outstanding fringe benefits and competitive salaries, with an average annual 3.4 percent increase to the salary pool over the last four years. Additionally, all employee salary pools increase 3 percent per year in FY 2016 and FY 2017. According to the Illinois Board of Higher Education, in FY 2013, only the University of Illinois Urbana-Champaign faculty earned an average annual salary greater than COD faculty. At the same time we have been able to create a state-of-the-art, student centric teaching and learning environment, with virtually no funding from the state for capital expenses and for minimal operating expenses."
The College is currently completing a $550 million transformation of its physical campus, made largely possible by two capital referenda supported by District 502 taxpayers in 2002 and 2010. The state has provided only $2.6 million to the College for physical facilities since 2009. The College's strong financial position will permit construction of a $30 million Teaching and Learning Center using a portion of its reserves. Construction of the center would decrease the reserve to 78.1 percent of total operating expenses.
The impending recommendation does not come without risk. Under the original intent of Illinois community college legislation, the state would have provided approximately $66 million (or 33 percent) in operating appropriations for FY 2014. The College expects to receive only $13.1 million, or just 7.2 percent of its total 2015 operating budget revenues. In addition, unfunded state mandates like veterans tuition reimbursement cost the College almost $1 million this past year.
Of equal concern are students who do not successfully complete their studies after they have received their federal loans and Pell Grants, leaving the College with the financial obligation to reimburse the federal government and simultaneously attempt to recover the cost from the students. For this past year, the College will absorb roughly $755,000. Further, the state pension crisis remains unresolved, potentially leaving the College with a huge financial liability that currently totals $41 million. On top of these risks and others, any unexpected, significant enrollment decline would exacerbate the impact of these rollbacks. Recent enrollment declines at peer institutions have created serious financial challenges.
"Nevertheless, reducing tuition at this time is a manageable risk that I am wiling to recommend for the Board's consideration," President Breuder said. "Should economic conditions impacting the College deteriorate in the future so as to elevate the risk to an unacceptable level, tuition could be adjusted upward to help generate the needed revenue. The elected Board of Trustees and the President have a fiduciary responsibility to the taxpayers to keep COD in a strong financial position so it can achieve its published vision: College of DuPage will be the primary college district residents choose for high quality education."
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