MU tuition jump linked to price index, funding

Monday, April 10, 2006 | 12:00 a.m. CDT; updated 12:34 p.m. CDT, Tuesday, July 1, 2008

In raising tuition 5 percent for the coming school year, leaders of the University of Missouri System again used the Higher Education Price Index as a starting point.

The HEPI is a lot like the Consumer Price Index published by the U.S. Bureau of Labor Statistics, except that it monitors the rising costs associated with running a college or university.

The index treats higher education as a specialized consumer, focusing on expenses such as faculty and administrative salaries that don’t necessarily increase in line with the Consumer Price Index. In the past, inflation has increasingly affected the HEPI.

Created in 1961, the HEPI was published by Research Associates of Washington, D.C., until 2005, when the Connecticut-based Commonfund Institute took over all calculation and maintenance of historical HEPI data.

The balance between costs and yearly funding decisions by the state determine how much UM students pay for their education. The recent decision to increase tuition across the UM System fills the gap between the two so that the university can work within the constraints of its budget. UM spokesman Joe Moore said the use of HEPI, when coupled with expected state appropriations for higher education, form a point from which the university can settle on necessary fee and tuition increases.

“In the past, there has always been a very clear relationship between state appropriations and tuition,” Moore said. “This is because these are our primary income sources. If one goes down significantly, the other will inevitably go up, despite internal steps that we take to budget as effectively as possible.”

Tony Luetkemeyer, chairman of the Intercampus Student Council, said that by adopting this kind of policy, the process behind tuition increases becomes more transparent.

“It shows the voters that tuition increases and decreases are bound to the state,” Luetkemeyer said.

Last fall, Elson Floyd, president of the UM System, looked into fixed-rate tuition for incoming freshmen at the UM campuses, guaranteeing them the same per-credit-hour cost for four years. However, the idea was abandoned after concerns were raised, among them that, in the event of a tuition increase, the brunt of the change would fall on the shoulders of a new freshman class rather than being distributed among all students.

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