As state funding for higher education continues to deteriorate, University President Richard Lariviere’s New Partnership proposal represents the best option for the University to stabilize its finances and take control from the state. But once again, through a lack of information, the administration has left students asking: What’s in it for us?
The New Partnership does provide a long-term solution for faculty and the administration, who have seen the problem of state funding grow to a critical mass over the last 20 years, but the effect on students hasn’t been explored in full detail.
The proposal supposedly solves the problem of increasing tuition and would provide greater affordability and accessibility, but we haven’t yet seen concrete evidence that tells us how it would mitigate tuition’s growing role in financing University operations.
The New Partnership’s governance component would remove the University from the Oregon University System and create a 15-member board of directors — one of those members would be a University student — to oversee all governing policies. The financial component involves the state selling bonds, from which the University would get $800 million that the UO Foundation would invest in an endowment over a 30-year period. This essentially means the University’s income would be dependent on market performance.
The governing portion makes sense for students because, similar to the University Senate, having student representation in overseeing and enacting policy is crucial for the University’s mission as an educational institution.
The financial portion, however, remains plagued by the question of effect on tuition.
Under the funding model, the endowment would generate approximately $64 million for operating costs, essentially replacing the state’s contribution. As more money would continue to be invested, this number would gradually increase every year until approaching almost $100 million after 10 years.
However, there can be no guarantee that tuition will be capped or lowered when the University’s finances are reliant on economic performance, particularly in the endowment’s first few years.
The University Senate budget committee’s “Preliminary Report on the Proposed ‘New Partnership,’” from Nov. 9, 2010, says tuition management is one of the prime benefits of the plan:
“Full control of UO tuition policy will enable us to stabilize tuition growth patterns in ways that serve to enhance student demand and retention without diminishing aggregate tuition revenue. This is of benefit to the University, and should be of benefit to the students also. While it is impossible for the University to make any up-front guarantees on limits on tuition increases, given the uncertainty of all future economic and financial conditions, the increased stability of University funding should help to flatten out the abrupt spikes in tuition that have occurred in the past as tuition increases have been needed to backfill unanticipated cuts in state support.”
In another section, however, the report states that these details have not yet been well explained in full:
“Yet this issue is certain to be the prime concern of students, and as such, will probably come up in any negotiations with the state. The UO must have a clear understanding of the parameters around this issue, if we are come to any agreement with the state.”
Lariviere did recently counter OUS Chancellor George Pernsteiner’s plan by offering a 5 percent in-state tuition cap, which is 2 percent lower than the average annual increase in tuition at the University every year.
The original New Partnership, however, included no tuition cap, and Lariviere’s promise of one seems to be more politically motivated than a commitment to making the New Partnership appealing to students. There is no way to guarantee a precise tuition cap number at this point because the specifics of the New Partnership’s financing structure are based on inherently uncertain terms.
We do recognize that the absence of one detail does not condemn the entire plan. Rather, we applaud Lariviere for devising a revolutionary plan that seems to address and mitigate the core problem facing higher education finance.
But more importantly, we recognize that the University’s educational mission requires its administration to work with students and inform them.
Right now, the burden of proof is on the administration to ensure all constituencies the New Partnership would affect — faculty, staff, students, administration — have the information they need to take an informed stance.
Students need to hear concrete details about the potential effects on tuition to be educated and prepared for discussions about the New Partnership in the coming months.
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