The University of New Mexico’s Board of Regents is considering an option that would allow some students to lock in a guaranteed tuition cost while earning their degree at UNM. Regents believe that a fixed rate tuition plan could help students and their parents improve financial planning and encourage earning a degree in four years.
“We believe families and students should have the ability to plan with confidence for the future cost of their education," Regent Brad Hosmer said. “We can offer that opportunity, with a small premium, for the privilege to lock in a rate.”
Various proposals will be evaluated throughout the next budget cycle. A common model essentially increases the current tuition rate by a certain percentage and secures it at that same price over the course of four years. The premium or surcharge to lock in the rate would likely be 8 percent or less which averages out to about a 5 percent increase each year. UNM did not increase tuition for the upcoming 2014-15 school year but tuition had gone up an average of six percent each year over the previous four years.
“Keeping UNM affordable was the number one priority that resulted in no tuition increase this year but we will have to remain competitive with peers by maintaining faculty salaries and supporting student success so tuition and fee rates will need to be continuously considered as part of limited resources.” UNM Associate Vice President for Enrollment Management Terry Babbitt said.
Based on the 2014 fall rate, which is $3,223 including tuition and fees, an 8 percent increase would amount to a locked-in rate of approximately $3,482 per semester for the following four years or 12 semesters. This would equal $6,964 for annual tuition and fee costs.
Babbitt says the guaranteed tuition option is a fairly common model. “Some states have legislated it and mandated that universities provide this option. A few institutions have had it for a long time where it’s mandatory that every student participates in a guaranteed tuition structure.”
The ability to implement a tuition guarantee ties into UNM’s recent decision to reduce credit hours for an undergraduate degree from 128 to 120, while also encouraging students to take at least 15 credit hours so they can graduate in four years with less debt than if it took six years.
In terms of monetary benefits, the impact for the students and the University are anticipated to be neutral but could provide incentives for graduating in four years and protect participating students from higher tuition increases.
“I think students can benefit if future economic conditions dictate a little higher tuition increases than expected and the University benefits in the fact that it’s provided some certainty and security to those families that prefer the option,” Babbitt said.
At the July Board of Regents retreat, the Regents asked Babbitt to survey students and families about which model is most appealing. After gathering data, Babbitt and his team will bring back proposals for the regents to consider during the upcoming budget cycle to possibly offer a guaranteed tuition option for the 2015-16 school year.