Mid-year tuition increase result of budget woesDear MUSC Students,On Aug. 8 the MUSC Board of Trustees reluctantly took the unprecedented action of approving a 10 percent mid-year tuition increase to be effective for the second term of the current academic year (to be effective Jan. 1). This action was taken upon the advice of the deans of our six colleges, with my concurrence. Student leaders were invited to the Education Subcommittee meeting of the board on Aug. 7 where they participated in an open discussion regarding the tuition increase. Prior to the board meeting, Valerie West, Ed.D., associate provost for education and acting dean of student life, and I met with leaders of the Student Government Association and the Multicultural Student Advisory Board to inform them of the potential tuition increase and to listen to their concerns. I had also encouraged the deans of our six colleges to discuss the tuition increase with student leaders from their respective colleges. President Greenberg has had ongoing discussions with student leaders regarding their concerns. The purposes of this communication are to explain the rationale for the mid-year tuition increase, to publicly acknowledge and address concerns of the students and their families, and to describe actions we have taken to assist students in dealing with the increase. The rationale for the tuition increase is that our state allocations in support of our university have dwindled, with cumulative cuts to our budget of 28 percent over the last three years. Furthermore, because revenue projections for South Carolina continue to lag behind earlier estimates, it is likely that we will be saddled with yet another mid-year reduction in our state budget in September. We are clearly dealing with extraordinary circumstances. The Chronicle of Higher Education, Aug. 8, published an article detailing the woes of funding higher education in the United States during the three-year downturn in our nation’s economy. It documented that South Carolina was one of the six states that had suffered the largest budget cuts (greater than 7 percent) in support of higher education. In response, other state-assisted universities in South Carolina had already raised tuition for this year by 15 to 22.9 percent. Our previous increase of 11 percent was significantly lower than our peer institutions in South Carolina. To this point we have been able to keep tuition increases stable for four reasons. The first is that our faculty has had extraordinary success in expanding clinical revenue and in obtaining increasing extramural research funding. The second reason that we have been able to cope with the budget cuts is due to generous voluntary monetary transfers and other support from the University Medical Associates (physicians’ practice) and the Medical University Hospital. This past year, those transfers were approximately $11 million and $4 million respectively. The third reason is that our colleges and departments have been willing to spend down their reserves. The final reason we have been able to cope with these budget cuts is that we have reduced staff within the university (a decrease of approximately 500 non-research-related positions, mainly by attrition) and have kept salary increases to a minimum. All of those efforts have mitigated the effects of the previous state budget cuts. We have now reached a point, however, where further significant increases in faculty productivity cannot be counted upon. The UMA and MUHA cannot increase the voluntary transfers to the university. Most of our colleges have now depleted their reserve funds. Finally, further reductions in faculty and staff will adversely affect the quality of our teaching activities and will cause reductions in the scope of our educational programs. Thus, we are in the unfortunate position where we must regretfully call upon our students to assist us in maintaining the quality of their educational experiences by increasing tuition for the second term of this academic year. We recognize that this will have a significant impact on our students and their parents with regard to their own personal finances. Your student leaders have made this point very clearly. The fact that this action will occur in the middle of the academic year made it impossible for students and their parents to plan ahead. Our Office of Student Financial Aid, 792-2536, is prepared to assist students to apply for grants and loans to help deal with this tuition increase (go to http://www.musc.edu/financialmanagement/ then click on “Forms”). They have prepared paper and electronic packets to facilitate this process. Although our Board of Trustees approved the mid-year tuition increases to preserve the quality of the education that we can provide to our students, they have instructed the MUSC administration to take all possible measures to shield our students and their families from bearing the brunt of further state budget cuts. If our financial position improves in areas where we can allocate discretionary funds to student support, we will do so. It is also one of my goals as provost to increase scholarship monies through philanthropy. You can expect more details of the tuition increase to be disseminated through town hall meetings and through The Catalyst. All of your academic leaders will welcome your comments and we will do our best to communicate with you in an efficient and timely manner. The next year will test the mettle of our students, faculty and staff as we strive to continue to increase productivity in the face of diminishing resources and dwindling state support, while at the same time maintaining and enhancing the quality of our educational programs for our students. We promise to do all that we can to preserve excellence while at the same time making every effort to shield students from the adverse impact of our declining state budget allocations. John R. Raymond, M.D.
Tuition questions, answersThese questions about the mid-year tuition increase (http://www.musc.edu/es/records/spr04_fees.htm) were compiled from meetings, e-mails and conversations between university administration and students during the last week. Some of the questions are paraphrased.Will Bradham, vice president for academics, Student Government Association (SGA): We have already had a 10 to 11 percent increase in the first term. Why didn’t the university anticipate the need for higher tuition earlier? John Raymond, M.D., MUSC provost: The deans of our six colleges did not want to place the burden of increasing tuition on their students unless all other avenues had been exhausted. During the last three months (since the original tuition increase was announced), the state has enacted a 10 percent ($8 million) reduction in MUSC’s budget for this year, and is likely to enact further mid-year reductions possibly as early as September. The university’s financial statement for this past year ending in June would suggest that we will not be able to make up those budget cuts by using reserves, by increasing grant or clinical revenues or by increasing efficiencies. Shana Smalls, co-director of the Multicultural Student Advisory Board:What percentage of the university’s budget comes from tuition? Patrick Wamsley, MUSC chief financial officer: In the fiscal year that was just completed, actual tuition recovery ($23,598,709) accounted for 6.13 percent of the university’s revenues ($385,105,640). These numbers do not include hospital (MUHA) or physician practice (UMA) revenues, which do not include any tuition components. When expressed as a portion of our total university budget of $1.1 billion, tuition accounts for 2 percent of our revenues. The 10 percent mid-year tuition increase will add approximately $1 million to the current year’s tuition revenues. This constitutes only about 1/8th of the state budget cut that was effective July 1. Greg Johnson, immediate past president of SGA: Education seems to be suffering cuts across the board in South Carolina. Is this solely due to decreased revenue, or is the money being diverted to other projects? Raymond: The state has struggled to deal with projected deficits of hundreds of millions of dollars the past three years. Gov. Sanford has limited new projects and leases, and has passed across-the-board reductions to all state agencies, sparing very few from cuts. Many other state agencies are suffering much more than MUSC because they do not have the opportunity to generate revenue from grants or clinical practice. Smalls: How does MUSC compare with other South Carolina universities regarding tuition increases this year? Susie Edwards, director of the MUSC Budget Office: Our previous increase of approximately 11 percent is significantly less than those already approved at other South Carolina universities, which range from 15 percent to nearly 23 percent. Including the 10 percent mid-year tuition increase, our annualized increase of approximately 16 percent compares with 15 percent increases for USC-Columbia, USC-Spartanburg, and Lander; 15.1 percent for USC-Aiken; 17.1 percent for Francis Marion; 18.8 percent for Winthrop, Clemson and the University of Charleston; 19.3 percent for Coastal Carolina; and 22.9 percent for the Citadel. Johnson: Could lottery money play any role in buffering cuts to higher education in the state? Valerie West, Ed.D., MUSC associate provost for education and acting dean of student life: South Carolina Educational Lottery funds for higher education have been made available primarily in the form of scholarships to individual students. In addition, MUSC scientists were able to compete for funds to endow research programs through the South Carolina Educational Lottery Centers of Economic Excellence competition, winning promises of $13.5 million in matching funds for four endowments in neurosciences, marine genomics, proteomics and brain imaging. It is important to note that these funds cannot be used to directly support classroom teaching. However, if we can garner private matching funds and attract outstanding professors to the lottery endowments, these funds will help us to maintain excellence in our educational programs in the sciences. In all likelihood, these funds will be distributed over the next few years after private matches come in. Johnson and Bradham: The students are wondering why we cannot use the monies being expended to build the Children’s Research Institute and Hollings Cancer Center. Could you explain the difference between building funds and educational funds, and why the two cannot be mixed? West and Raymond: It is important to understand that the actual cost of education in each of our colleges far exceeds the sum of tuition and state funds earmarked for education. Student academic programs are supported from a mix of tuition, state funds, departmental clinical and other revenues, transfers from UMA and MUHA, and discretionary monies generated through philanthropy and the sale of university or foundation property holdings. Construction funds are usually obtained through federal grants, state bonds, and private donations, all of which are required to be used specifically for the intended projects as mandated by law or by contract. In short, we cannot use construction funds to directly offset tuition or operating expenses of the university. Bradham: What steps have the administration and faculty taken to improve our financial position? Jerry Reves, M.D., dean of the College of Medicine and vice president for medical affairs, and Raymond: It is important for our students to realize that everyone in all of our colleges has been negatively impacted by our state’s budget situation. The administration of the university instituted a “hiring freeze” approxi-mately four years ago, resulting in a decrease of approximately 500 non-research-related positions (mainly by attrition). Our colleges have kept salary increases to a minimum, have increased productivity and efficiency, and have used their reserve funds. We have asked the faculty to be much more productive and they have responded. We have seen more patients, received more grants and generally worked very hard to minimize the impact of the budget cuts on our academic programs. In other words, everyone is pitching in to address this crisis and we are sorry that it affects you so directly as well. Lee Taylor, current SGA president: Drs. Raymond and West explained to student leaders that the hospital gave approximately $4 million to the university last year to cover various costs, but that we should expect much less financial backing this coming year. Why is this change necessary? Dr. Ray Greenberg, MUSC president: With regard to the hospital transfer to the university, the $4 million was a voluntary transfer and was never intended to be permanent. It was a way for the hospital to indicate its continuing support for the university when it became an independent entity as the authority. It is being phased out slowly in order to soften the blow to the academic program. The hospital supports our educational programs in many other ways, by subsidizing the costs of running the outpatient clinics, by supporting the costs of residents and fellows beyond reimbursement for their services, and by subsidizing the salaries of faculty in a variety of clinical departments. Given the complicated nature of the hospital budget, each of these types of support do not appear as line items, but I can assure you that the financial support is there. At the same time, the hospital must act in a fiscally responsible way. The year that I came into office, the hospital lost about $20 million, mostly because of reductions in federal reimbursement because of the Balanced Budget Act of 1997. This was the third straight year of losses. Through a variety of measures, we cut the losses and have operated in the black for the past three years, but we still have not replenished the cash that was used in the prior years. A hospital ideally should operate with about 90-120 days of cash on hand. At the moment, we have eight days of cash on hand. This is a particularly important issue as we go out to the bond market to borrow money to build the replacement hospital. The lenders want to see us have a much stronger cash position and operating margin. Taylor and Bradham: We both are increasingly struck by the growing disparity between the clinical and educational sectors at MUSC. We realize that it is a complex symbiotic relationship, but fear that students are beginning to perceive the hospital as more of a profit-generating corporation than an academically oriented- support system for their education. Do we really need to move forward with the replacement hospital now? Greenberg: Can we do without the new hospital? Perhaps, but we want to remain at the cutting edge of clinical care, meet the patient demand for our services, improve our payer mix, and provide a state-of-the-art learning environment for our students and residents. It is tough to move forward, especially in these tight financial times, but the failure to do so would make us less competitive for the best faculty and students. A new facility alone will not guarantee greatness, but it will be difficult to achieve excellence in clinical care without it. Smalls: How do we apply for increased financial
aid?
Financial Aid Update Due to FY04 mid-year tuition increasesStudents receiving loan funds who would like to increase their loan amount to cover the mid-year tuition increase must complete the following:1. A Loan Request Application (form is on MUSC Web site or may be obtained from the Office of Financial Aid Services)—http://www.musc.edu—click on Student Aid Services—click on A Guide to Students Financial Aid—click on Forms. 2. The additional Loan Request Application must be completed and returned to the Office of Financial Aid Services by Nov. 3. This will ensure that the loan funds are available at spring '04 registration. Or 3. Students may send an e-mail to the following e-mail address: finaid@musc.edu indicating the additional loan amount request. 4. Students who have reached the maximum Stafford loan eligibility for the year may apply for an alternative loan (approval is contingent upon credit history). Students who have never applied for financial aid assistance will need to complete a financial aid packet. The requested information must be completed and returned by Oct. 20. Call the number below to obtain a packet. For more information, call 792-2536.
Catalyst Online is published weekly, updated as
needed and improved from time to time by the MUSC Office of Public Relations
for the faculty, employees and students of the Medical University of South
Carolina. Catalyst Online editor, Kim Draughn, can be reached at 792-4107
or by email, catalyst@musc.edu. Editorial copy can be submitted to Catalyst
Online and to The Catalyst in print by fax, 792-6723, or by email to petersnd@musc.edu
or catalyst@musc.edu. To place an ad in The Catalyst hardcopy, call Community
Press at 849-1778.
|
|