II. Discussion of Tuition Pricing Strategy.

Fr. Wildes introduced Dr. Harris, the Provost, who described the methods used to create the Tuition Pricing Strategy.

 

Dr. Harris said that the Tuition Pricing Work Group was assembled to look at various pricing scenarios based on key assumptions. The assumptions were as follows:

1. Expected student enrollment of 700 new Freshmen, with 125 Transfer students

2. Average student retention rate of 80% [although actual differences exist by class group]

3. Tuition discount rate of 44.5%

 

Dr. Harris noted that the work group also looked at differentials in tuition increases between classes; freshmen, sophmores, juniors and seniors. Additionally, the work group looked at different tuition rate options, and the possible salary increase options within each tuition rate scenario. Dean Kvet noted that the tuition pricing work group was started by Fr. Byron. Dean Scully says that the tuition pricing work group was formed to address the issues more precisely.

 

Dr. Harris introduced the members of the work group; Dean Scully, Dr. Petty, Debbie Stieffel, Dr. John Cornwell, Dr. Brenda Joyner, Adrienne Norfleet, and Ms. Cartwright. Dr. Koplitz asked if this was tied in to the Financial Aid group. It is not.

 

Exhibit A - Revenue Budget 2007-2008:

Ms. Cartwright tells the committee that an actual ProForma Budget, based on actual Tuition increases being considered, is found as Exhibit A in their meeting packet. Ms. Cartwright notes Exhibit A, the column listed as ‘06-07 Adjustments’ includes revenue normally listed on the line for City College, now listed approximately in line with the new organization. Ms. Cartwright notes that the far right hand pair of columns in Exhibit A show various tuition increase options, at 6% and 7%, for all undergraduates, new and returning. The two pricing scenarios at right include the new meal plan rate and the new room rates. Ms. Cartwright clarifies that the Danna Center Fee is listed as part of the Operating Budget, although the Athletic Fee and the IT Fee are not.

 

Ms. Cartwright notes that all other revenue items have been updated to reflect changes for the upcoming AYE 07-08 Budget. At a 6% tuition increase the Total Revenues amount to $ 120.166 million, up $ 13.216 million. At a 7% tuition increase the Total Revenues amount to $ 120.793 million, up $ 13.843 million. The Revenue difference between a 6% and 7% increase is $ 627 thousand, an approximately $ 600 thousand difference per 1% increase.

Ms. Cartwright reminded the committee that this assumes an enrollment of 700 new students, with 125 transfers and readmitted students, a retention rate of 80%, and a tuition discount rate of 44.5%. Ms. Cartwright notes that the Endowment line in both percentage scenarios reflects a 5% of the three year rolling average drawn from this source. 

 

Exhibit B - Expense Budget 2007-2008:

Ms. Cartwright explains some details of the Expense Budget for 2007-08. The columns reflect a 2006-07 Budget with Current 06-07 Adjustments and an Adjusted Budget. Two columns at the far right reflect the calculations for a 6% or 7% Tuition increase.

Ms. Cartwright notes the 2006-07 Budget line of Salaries at $ 41.830 million are without increases, however, the Scholarship and Financial Aid lines do include increases based on the Tuition price increase. Ms. Cartwright states that the Utilities expense of $ 5.762 million includes the current or projected rate increases of $ 1.494 million.

 

Other Operating Expense - All Other:

The Academic Affairs line of ‘all other’ category includes the MOU arrangement with the Law School. Ms. Cartwright notes that increases in Insurance costs, and Maintenance Contracts, are also listed on the Business and Finance all other category. Ms. Cartwright further notes that the Student Affairs line will include $ 40 thousand for Resident Advisor salaries which are tied to Room Rate increases.

 

Ms. Cartwright notes that two unbordered columns of 3% and 4% demonstrate the cost of university salary increases at those rates. At a 3% salary increase the cost would be $ 1.609 million, at 4% the cost would be $ 2.145 million, as compared to a 5% salary increase which would cost $ 2.6 million.

 

Exhibit C - Summary of Budget 2007-2008:             

Ms. Cartwright notes the summary pages and explains that a 1% tuition increase yields approximately $ 350 thousand. 

 

Dr. Gresham notes that she prefers Loyola choose a lower rate tuition increase to keep the greatest number of students. Ms. Cartwright notes that the work group discussed the subject of how to ensure the recruitment allowed for the assumed enrollment of 700 new and 125 transfer students. Dr. Gresham asks that the subject be open for discussion, noting she strongly favors keeping the tuition low to preserve enrollment.

 

Mr. Green asks what a 5% increase would look like, if 1% yields $ 350 thousand.

 

Ms. Cartwright replies that the work group was comfortable with a 6% increase as no increase was made for last year. Dr. Gresham points out that this will be felt as one large increase, rather than two small ones of 3% per year, by students who have had their lives affected as they were last year. Ms. Gresham asks if the committee and work group could look at 5% figures without ignoring that possibility. She notes again that she would prefer not to have the University be priced outside of its group.

 

Dean Scully notes that the fact that so many faculty had lost homes, the work group had hoped to retain as many of them as possible by increasing salaries with funds yielded by the 6% increase.

 

Ms. Cartwright tells the committee that there was a great deal of discussion about how to put some money back into the deans’ and departmental operating budgets.

 

Mr. Green noted that with 50% of Loyola’s student population being in-state Louisiana residents, we should keep the costs low, since all will have suffered financial losses in the 05-06 hurricane season.

Dr. Koplitz asks for the projected increase in Fund-raising. Dr. Frank replies that most donors are offering restricted gifts, for example, if someone makes a $ 1 million contribution to the Endowment, that gift only yields off 5%, or approximately $ 50 thousand in unrestricted funds per year.

 

Dean Scully asks if there will be any more aid money coming in such as with the Bush/Clinton fund. Fr. Wildes says that this is not likely, based on what he saw in his last visit to Washington. However, Fr. notes that with the new legislative government in power there may be a change in attitude towards funding such grants to Louisiana.

 

Ms. Steiffel notes that last year the Federal government gave forgiveness of a normally required Institutional match of 25% on several grants, for example SEOG {Supplemental Educational Opportunity Grants] and Campus Based Aid for students from specifically designated areas affected by the Hurricanes. Ms. Steiffel says that we want to ask the Federal government for help again by making the case that this is not just a 1 year problem, but rather a problem that follows the student through all 4 years of their college experience.

 

Room Rates 2007-08 Proposed & Meal Plan 2007-08 Proposed:

Ms. Cartwright asks if there are any questions from the committee on the meal plan or the room rate proposals. Dr. Spence asks what other contributions are received by the Institutional Advancement. Dr. Frank notes that the Capital Building Budget and the Endowment are IA territory, further noting that almost $ 10 million total was raised last year. Dr. Frank cautions that only a little over $ 3 million of this amount is Unrestricted, which is an unusually high amount.

 

Dr. Koplitz asks why the university has continued the Law school’s MOU agreement. Fr. Wildes notes that he has not had a chance to examine it yet. Ms. Cartwright explains that the current MOU has been in effect approximately 5 years.

 

Ms. Cartwright asks if there are any questions regarding the fee proposals for the Athletic Center, the IT fees, or the Danna Center fees. Mr. Weber, SGA representative, asks why the IT fee structure features an increase for the part time fee that is larger than the increase for the full time fee. Ms. Cartwright notes that the goal is to make the structure such that the part time costs is half that of the full time fee. Ms. Cartwright notes that these numbers will be corrected.

 

A discussion ensued surrounding the various fee proposals, and the meal plan proposal.

 

Fr. Wildes concludes that the committee agrees to look at 5% Tuition increase and Meal Plan differences. Fr. Wildes reminds the committee that next week we will need to make a vote and look at the whole range of figures.

 

Dr. Koplitz asks when the committee is going to be provided with Institutional Research information requested in last week’s meeting. Fr. Wildes replies that in answer to questions about comparative institutions, Loyola’s comparative schools are the other New Orleans schools.

Ms. Steiffel notes that the New Orleans schools Loyola’s peer groups are already on the US News & World Report. Dr. Shuh notes that she asked for more ‘aspirational school’ information.