Memo



To: Juan Franco, VP for Administration

From: Bob Moulton, Dean, College of Education

Date: 10/27/00

Re: Report of the Ad Hoc Committee on Differential Tuition


As charged by Dr. Juan Franco, VP for Administration, the NMSU ad hoc committee on differential tuition met several times during the month of October. The members of this committee were: Bob Moulton (chair), Danny Arnold, Donna Alden, Elizabeth Titus, Jason Allen, Jay Jordan, Feffrey Brandon, Jerry Shickedanz, Leland Kiehne, Melaine Martin, René Casillas, and Tim Pettibone


As charged by Dr. Juan Franco, our VP for Administration, the NMSU ad hoc committee on differential tuition met several times during the month of October. We reviewed and discussed a collection of materials concerning differential tuition, including reports from institutions where differential tuition is, or has been, charged. Karen Becklin, our Director of Planning and Policy Analysis, provided valuable historical information relating to tuition levels in this state and at this institution, and she helped us to understand better the New Mexico formula funding process. We noted that, to a limited extent, differential tuition rates are already in place at NMSU (i.e., graduate tuition is slightly higher than is undergraduate, out-of-state tuition rates are higher than are in-state). The committee found no current institutional goal or priority that would be better served by differential tuition rates than by the current tuition rate structure and we concluded that expansion of tuition differentials beyond current practice is not recommended. We base this on the following:

_ Tuition differentials could cause students to select majors based on relative tuition costs rather than on student interests, abilities, and career opportunities.

_ Unless the entire state adopted uniform tuition differentials at the same time, tuition differentials at NMSU could negatively impact enrollment. If, for example, NMSU raised tuition for engineering majors and UNM did not, we would be at a recruitment disadvantage.

_ Differential tuition could have an inordinate negative impact on graduate enrollment. The assumption is that tuition differentials would be higher for graduate courses since they are relatively more expensive. Further, the assumption is that the increases in graduate costs brought about by tuition differentials would cause some students to avoid or postpone graduate work.

_ Given the NM formula funding process, it is quite possible that NMSU would not be allowed to keep all of the tuition increase resulting from differential tuition. That is, we might collect more tuition through differential tuition but then be required to return these new-found funds to the state through the tuition credit factor of the funding formula.

_ Tuition differentials would place greater pressure on lottery scholarships and probably cause significant political repercussion.

_ Inherent in the notion of tuition differentials is the assumption that the differentials are based on true costs. To define and then compute true costs, however, is an exceptionally difficult task.

_ Under tuition differentials, the higher cost programs/courses/majors would probably have a relatively more difficult time achieving diversity goals since it is too often the case that minority students are more likely to be less affluent.

_ Nationwide, tuition rates are rising faster than is the rate of inflation and we should be concerned that this trend could have negative political and social ramifications.

_ If we were to set differential tuition rates based roughly on program costs, we would be putting a higher price in some notable cases on those programs which are currently undersubscribed (such as engineering) and a lower price on those in which student demand currently exceeds resources available (such as education). This would only exacerbate our existing enrollment management problems.


Positive arguments in favor of tuition differentials are limited and include the following:

_ Under tuition differentials, students in low-cost programs are not required to share the cost burden of programs that require relatively more institutional resources.

_ Tuition differentials could be used as an enrollment management tool. That is, depending on student demand for admission to particular programs, tuition could be raised or lowered to encourage or to discourage enrollment.

_ Differential tuition systems can be used to acknowledge that course delivery costs vary by program area and that tuition rates may need to differ by program area to reflect these variances.


This was an instructive process. We welcome the opportunity to discuss these issues with our administration and/or with constituent groups. A future change in institutional priorities could create the need for another review of our tuition-setting process.