University of Kentucky President Eli Capilouto will propose a 5 percent tuition increase for in-state students this fall to offset continued budget cuts from the General Assembly.
In a campus-wide email message sent Monday night, Capilouto called the increase "modest," although UK's tuition has more than doubled in the past decade.
Tuition for out-of-state students will go up 8 percent.
Capilouto said next year's budget will also include a 2 percent merit pool raise for faculty and staff, and an $11.7 million increase in financial aid. Last year, 85 percent of freshman received some form of financial aid that did not have to be repaid.
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"While no numbers can diminish the fact that families are bearing more of the cost burden for higher education in the wake of declining state support, we can be proud that this university is keeping the needs of Kentuckians first," Capilouto said.
The Board of Trustees is scheduled to meet Friday and is expected to approve the tuition increase. The board will consider the budget, which takes effect July 1, at its June 10 meeting. Capilouto made a presentation on the budget to the university senate on Monday.
The Council on Postsecondary Education recently voted to limit tuition increases to 8 percent over two years. Raising tuition by 5 percent this fall suggests that the increase for fall 2015 will be 3 percent.
Last year's 3 percent increase put in-state undergraduate tuition above $10,000 annually for the first time. With this proposed increase, that same tuition — for in-state freshmen and upperclassmen — will be about $10,616.
Out-of-state undergraduates will pay about $22,800 a year.
The General Assembly voted to cut higher-education spending by 1.5 percent for fiscal year 2014-15, which works out to about $4.3 million for UK. Capilouto said total state appropriations have been reduced by $55 million since 2008. State support next year will make up 44 percent of UK's $664 million operating budget, the lowest in recent history. (That doesn't include revenue from UK's hospital and research operations. UK's total budget is about $2.7 billion.)
State funding is flat in the second year of the biennium, so it appears that many schools will have higher increases this fall and smaller ones in 2015.
"With state funding cuts, our plan to raise compensation, and having to manage increases in fixed costs such as utilities and financial aid, we face nearly $40 million in additional funding needs for the coming year," Capilouto said in the email message.
That budget hole will be filled by the tuition increases — about $28 million — and by cutting debt service pools and reallocating $7 million internally.
Contained in the 5 percent increase is a student fee — about $60 a year — to help pay off debt for the $175 million project to expand and renovate the UK student center.
Tuition for the graduate schools of medicine, dentistry and pharmacy will go up 3 percent because those programs already have relatively higher tuition rates, officials said.
Some housing and dining costs also will rise.
The cost to stay in newer dorms will go up 3 percent, and the price for older housing will stay steady or go down. For example, the price of single rooms in the Kirwan Blanding complex on south campus will go down $660 a semester.
Spokesman Jay Blanton said there is a waiting list for new housing, and there are empty slots for older dorms. Officials are planning for about 4,800 freshmen this fall, up from 4,650 the year before. About 34 percent of them will be from out of state.
The minimum meal plan — about seven meals a week — will increase in price by 3.9 percent. Other meal plans will remain the same or increase as much as 3 percent. It's not yet clear who will be providing dining in the fall, as UK decided to privatize its services but has not yet announced which vendor has been chosen. Dining rates could change once that vendor is chosen, UK officials said.
Other public universities have announced that they will raise tuition in roughly the same increments. Western Kentucky University President Gary Ransdell has proposed 4.8 percent, Eastern Kentucky University is considering 5.1 percent, and University of Louisville officials will propose 5 percent.
Roshan Palli, the student member of the Board of Trustees, said it's understandable that UK must offset state budget cuts with higher tuition.
"Obviously, I don't want tuition increases for our students, but if it's what leads to the best education, then it's a fair compromise," he said. "I think we as students are upset and we've done our best to reach out, but we didn't see much effect on the General Assembly."