The University of Kentucky is raising tuition for Kentucky students by the smallest amount in more than a decade, but the 2.5 percent increase will push the sticker price for undergraduate students above $12,000 a year.
The UK Board of Trustees is expected to accept the proposed rate increase when it approves the university's 2018-2019 budget at its June 22 meeting.
The $3.9 billion budget, which includes $1.7 billion for the operation of UK HealthCare, reflects a $7 million loss in state funding, as well as a proposed 1.5 percent pay increase for faculty and staff. Trustees also will hear about plans for the following year, which include a proposed 2.4 percent in-state tuition increase for the fall of 2019 and a possible 3.5 percent salary hike for employees. UK HealthCare employee raises will be decided at a later date.
"Even in times of significant budgetary constraint, we are finding ways to lower costs for students, particularly those that need the assistance most," said UK President Eli Capilouto. "The board is considering a budget that sends a powerful message about the importance of student success and the workforce we seek to create for the commonwealth."
Like all of Kentucky's public universities, UK has struggled in the past decade with state budget cuts that have placed more pressure on tuition to fund the day-to-day operations of the 30,000-student flagship university. Tuition has gone up about 105 percent since 2005, while the state has cut $70 million in funding in the past decade.
In 2009, state funding made up 55 percent of UK's General Fund budget, with tuition and fees making up 45 percent. That number will be reversed by next fall, with state money at 32 percent of the General Fund budget and tuition and fees at 68 percent.
Officials said the proposed two-year increase for in-state students will be less than 5 percent; the average increase over the last four years is about 3.5 percent. Out-of-state students, who make up about 35 percent of the student body, will see a 3.8 percent hike at both the undergraduate and graduate levels, bringing the annual tuition cost for out-of-state undergraduates to about $29,000.
In addition, the Board of Trustees voted to increase housing costs by 3 percent earlier this year.
The total cost of attendance — including tuition, housing, books, and food — for in-state undergraduates will be $30,100, although thanks to state and institutional aid, most students do not pay full price.
On June 22, officials also will announce the end of a $14-a-year mandatory athletic fee, making UK one of a handful of schools nationwide without one. UK Athletics has generated about $800,000 from new ticket prices and multimedia revenue to fund the change, which has been phased in over several years.
That brings total mandatory student fees for next fall to $681.50. There will be no increases in course or program fees.
Because of increasing concerns about college affordability, UK has focused on moving its financial aid from predominantly merit-based aid to need-based aid.
It has started a program called UK LEADS, which helps students meet unmet financial needs that often cause them to drop out. Based on past data, only 57.7 percent of these students would have returned if no grant had been awarded, but upon receiving the grant, 75.8 percent returned. Grants averaged just under $7,000.
In-state students with family income of less than $20,000 a year have seen per-semester costs drop from $465 in 2016 to $204 last fall, officials said. UK officials think a focus on helping more kids with unmet financial needs helped UK reach a record retention rate of 85 percent this year, up from 83.3 percent the year before.
Retention "has been a pretty stubborn number for us," said spokesman Jay Blanton. "So that's a pretty big lift."
UK's auxiliary units, such as UK HealthCare and athletics, will see bigger budgets next year. UK HealthCare's budget will increase $118 million to $1.7 billion because of continued growth. UK Athletics' budget will hit a high of $150 million, nearly $6 million more than last year.