The Council on Postsecondary Education will limit tuition increases at state schools to 3 percent next fall, the smallest uptick in 15 years.
The decision was made to help families struggling to pay for college, officials said, but they acknowledged the move will create a nearly $30 million shortfall for schools still reeling from state cutbacks over the past few years.
Council President Robert King said the increase would generate $31.5 million for state schools, about half of the estimated $61.4 million increase in fixed costs — utilities, retirement contributions, health insurance and other mandatory payments — for higher education across the state.
The University of Kentucky has already approved a 3 percent tuition increase, but Western Kentucky University is seeking a 5 percent increase. In March, Western President Gary Ransdell said anything less than 5 percent could mean cuts and layoffs at the Bowling Green school. Ransdell was not immediately available for comment Thursday.
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The University of Louisville and Eastern Kentucky University have not yet made tuition recommendations, spokesmen said Thursday. However, EKU is already working to cut and reallocate nearly $23 million of its budget, which is expected to result in program and personnel cuts.
"I appreciate the CPE's interest in keeping tuition affordable; I share it. However, given a 3 percent cap will not cover even fixed and unavoidable cost increases, part of what we were hoping to go toward strategic reallocation will have to fill that hole," EKU President Doug Whitlock said.
Morehead State University President Wayne Andrews said he had hoped the Morehead Board of Regents would have more flexibility in how it shapes next year's budget.
"We can manage it, but it will cause us to make further adjustments because of increases in fixed costs," Andrews said.
Last year, the council allowed UK and U of L to increase tuition by up to 6 percent. Regional universities were allowed to raise tuition by 5 percent and the Kentucky Community and Technical College System raised rates by 4 percent.
In a statement after the council's Thursday meeting, King issued a challenge to state legislators: "It is clear that if Kentucky wants a healthy and vibrant economy, it can only do so with a well-educated work force. We are hopeful our elected officials will find a way to reinvest in higher education."
However, state lawmakers have shown little appetite to find more state revenue for higher education. For example, no action has been taken on a 2012 task force report suggesting major changes to Kentucky's tax code.
King said the decision to cap tuition increases at 3 percent was made by the council after numerous conversations with stakeholders.
"The council tried to make the best decision it could that's sensitive to families and to campuses," he said. "The campuses are doing more with less. It is a terrible balancing act."
In a statement Thursday, Gov. Steve Beshear congratulated the council's decision, saying it "will help to keep college education within reach for more Kentucky families."
The council will vote to approve college tuition increase proposals at its June 20 meeting.