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President's Tuition Letter

To the campus community:

Please do not hesitate to contact us in the event that you have specific questions. Staff in any of the following offices will be pleased to assist you:

  • Office of Student Financial Aid
    301.314.9000 or
    1.888.313.2404

  • Office of the Bursar
    301.314.9000 or
    1.888.313.2404 or
    billtalk@acmail.umd.edu

  • Terp Payment Plans

  • Office of Undergraduate Admissions
    301.314.3835

  • Department of Resident Life
    301.314.2100

  • Orientation Office
    301.314.8217

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    Provost's Tuition Message
    (June 27, 2003)

    		•
    With the approval on July 11 of the Fall Semester 2003 tuition and fees, the Board of Regents closed the most stressful chapter in university budgeting history. Tuition plus mandatory fees for full-time undergraduate students increased to $6,759 for Maryland resident students and to $17,433 for non-resident students. Those are increases of 14.6% and 15.5%, respectively. These large increases raise many important questions: How did they occur? Are they necessary? What will we do to help students? Can we make tuition predictable? Will increases like this continue in the future?

    What is the problem that has led to tuition increases? One year ago, the State General Fund appropriation to the University was $360 million, but on July 1, 2003, we begin this year with $306 million. That reduction coupled with mandatory increases in costs (for health insurance, utilities, and like things) means we begin this year with $80 million fewer dollars to fund our programs and manage our physical facilities than we had one year ago. This equates to a one-year reduction in annual support of about $2,800 for every full-time student. A shortfall of this magnitude requires a balance of expenditure reductions and revenue increases.

    Expenditure reductions have been, and are being, implemented across the campus. At the same time we must be mindful that the quality of our programs can be adversely affected by reductions in key services. More than 75% of state expenditures support people. Consequently, large expenditure reductions require shrinking the workforce at all levels, and that shrinkage is taking place. Program offerings, libraries, class sizes, and student services will be impacted by these personnel reductions.

    Considering the expenditure reductions being taken, are tuition increases really necessary? If we are going to continue to build the highest quality programs that are competitive with the best and if we are to reach the standard the State mandated for the campus fifteen years ago, the answer to this question is yes. This tuition increase will generate an additional $34 million or 43% of the one-year shortfall. An unforgiving relationship exists between the expenditure per student and the quality of the program offered. After all the belt tightening is done, a certain level of expenditure per student is necessary to ensure the quality of programs and build a reputation for the university that draws in the best students, faculty and partnerships. At our new tuition and state support levels, our funding per student is 25% below the average of our peers (Berkeley, Michigan, UCLA, North Carolina, and Illinois), and further it is the lowest it has been since peer funding guidelines were established by the State. If it were not for the tuition increases just approved, our funding picture would be substantially worse. Program quality would certainly suffer. Even with this increase it is clear that we have to generate additional revenue.

    As the tuition revenue per student approaches the state support per student, it becomes necessary to recognize that tuition and fees paid by students and their families are intended to support services that students receive. Accordingly, the additional tuition revenue derived from these increases will be expended on academic and student programs. Analogously, university research programs have been supported by external grants from federal and private sponsors for many decades. Those grants are restricted to use for their intended research purposes. In a like manner, other services provided to the state that are not related to students, academic programs, and sponsored research will need to seek ways to become partially self-supporting to insulate themselves from the negative effects of further reductions in state support.

    The campus is setting aside $23.7 million to support financial aid, an increase of $5.4 million over last year. The additional financial aid is sufficient to cover the increased tuition for our students with greatest need. Private support will be of increasing importance to base funding of the university as we move ahead, and the campus is in the planning stages of a major fund-raising campaign for scholarships and fellowships to support all students. We are also working to establish a four-year tuition schedule for every incoming student. It will allow tuition planning by specifying the maximum tuition cost for each student for each year at the time of admission.

    Future tuition costs depend primarily on two key issues: the academic quality of our programs and the State support for building the great university it has mandated. As we continue our journey to build this university, competitive with the very best, we must direct our financial resources to protect the core academic mission, the quality of our offerings, and the academic experience of our students. But we must also raise additional money to support the services we provide to the citizens of the State and the financial aid needed to help our students follow their dreams through access to a great university. In this prosperous state we should be able to do both.

    I am grateful for your support and counsel as we wind our way through these unprecedented State budget reductions and tuition increases to build an even stronger university.

    Yours Sincerely,
    C. D. Mote, Jr., Pres