Legislature aims to ease burden of paying for college
Published: Monday, March 10, 2014 at 7:35 p.m.
Last Modified: Monday, March 10, 2014 at 7:35 p.m.
TALLAHASSEE — Florida's university tuition costs won't be going up as much next year, but the question is what impact this year's money-saving moves will have on the quality of higher education.
In the quest to hold the line on university expenses, Sen. Bill Galvano, R-Bradenton, is pursuing a measure that would save parents more than $10,000 when they buy a pre-paid university tuition contracts for their children. Another Senate bill would cut the 15 percent differential tuition that each state university can impose each year to 6 percent. It also would eliminate an automatic inflation adjustment for tuition.
But the moves to cut tuition costs come at the same time that a new report shows Florida is last in the nation in per-student university funding, which is a combination of state revenue and tuition.
If lawmakers limit tuition, the state would have to boost nontuition revenue to the system to keep pace.
Galvano's bill (SB 732) does not impact the overall issue of university funding. But it will provide a substantial savings for families that buy pre-paid tuition plans for their children.
Galvano, the chairman of the Senate education budget subcommittee, is sponsoring the measure to revise the way the Florida Prepaid College Board calculates the cost of the prepaid contracts. Essentially, the bill would take the program back to an actuarial methodology that was used by the board prior to 2009, he said.
“It's sound and it will have a significant savings,” Galvano said.
Parents who buy a lump sum four-year pre-paid university contract would see the price plunge from $53,729 to less than $43,000 if the measure passes, according to legislative analysts.
Parents who pay for the contracts on a monthly basis also will realize a major savings. The monthly payments for a four-year university contract, which was $332 a month in the 2012-13 budget year, will drop to $255 a month with the changes, or a savings of some $17,000 over the 18-plus year contract.
Additionally, the bill will adjust the higher-priced contracts bought by some 26,000 families since 2009, resulting in a refund of approximately $50 million.
In another move that potentially could have a more direct impact on funding for state universities, Galvano's committee on Wednesday will take up a bill (SB 1148) that will reduce individual universities' ability to raise their tuition annually from 15 percent to a new 6 percent cap.
The bill also specifies that if the Legislature does not approve a general tuition increase, the universities would be prohibited that year from using their so-called “differential” tuition adjustment of up to 6 percent. And the measure removes an automatic inflation index tied to tuition.
Senate and House leaders are in general agreement on reducing the differential tuition to 6 percent, although Gov. Rick Scott has called for its complete elimination.
The effort to limit tuition increases follows a LeRoy Collins Institute report last month showing Florida is dead last among the 50 states in the amount of money it spends on each university student.
And the trend has been downward. In 2007, Florida spent $10,448 — in combined state funding and tuition — on each university student, which ranked 43rd in the nation and represented 87 percent of the national average. But by 2012, following the Great Recession, the per-student funding had dropped to $7,737 per student, last in the nation and representing 70 percent of the national average.
Last year, lawmakers boosted state funding for universities and approved a 3 percent tuition increase, although Scott vetoed the tuition increase.
Galvano said the move to limit the ability of individual universities to raise tuition means it will be up to the Legislature to decide the funding levels. He said lawmakers are working with the Board of Governors, which oversees the state universities, to develop a funding formula based on performance and efficiency, including graduating students on time.
“It's a global fix that we're looking at,” Galvano said. “We're looking at all of those factors and we're asking those universities and (state) colleges to be more effective and efficient.”
Reducing the differential tuition places more of that funding responsibility on the Legislature, Galvano said.
“If more funding is required in an effective, efficient system, it just means we have to make that decision,” he said.
Florida ranks among the lower tier of states in what it charges for tuition. Nevertheless, Scott has pushed to keep tuition costs low, pressuring the Board of Governors and university trustees not to raise them.