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CORVALLIS, Ore. - The Oregon State University Board of Trustees on Friday approved tuition and mandatory fees for the 2017-18 academic year.

Tuition will increase 4 percent for Oregon resident undergraduate students and 2 percent for non-resident undergraduates on both the Corvallis and OSU-Cascades campuses. 

This is one part of a university-wide strategy to manage shortfalls in state funding and significant increases in state-mandated employee retirement and benefit costs. As part of this plan, 25 percent of the value of the undergraduate tuition increases will be dedicated to need-based financial aid. Increases were also made in tuition for graduate students.

OSU President Ed Ray has informed trustees that the university will:

• Manage expenses in a fiscally prudent and sustainable manner, including reducing expenses annually by $20 million;
• Invest in specific priority strategies, including efforts to increase graduation and retention rates through the Student Success Initiative;
• Recruit and retain quality faculty and staff members;
• Grow student enrollment in online learning, at OSU-Cascades and in other programs;
• Emphasize student financial aid strategies;
• Develop new revenue streams; and
• Continue to engage in high-quality and impactful teaching, research, and outreach and engagement.

 Trustees considered tuition proposals after months of work by a university budget committee comprised of OSU faculty, staff, students and administrators. That work included engagement of a student advisory committee and input from more than a dozen university community meetings.

The meeting was a continuation from a March 17 board meeting in which trustees heard testimony from nearly two dozen students, as well as a staff and faculty member.

Board Chair Pat Reser said the tuition and budget decisions considered by board members were very challenging given the "heartfelt comments shared with the Board of Trustees in March by students regarding the challenges they face in affording the cost of tuition."

Reser said the board must also balance tuition pressures and the university's mission to provide students a high-quality, transformative education.

"I think that students who come to Oregon State University come with expectations," Reser said. "They expect to get quality instruction and they expect to work with top researchers."

Ray agreed there are no easy choices.

"Unfortunately, we will be forced to make hard choices while contending with much higher state-required employee benefit costs and an unacceptable continuing decline in higher education support from the state of Oregon," he said. "I did not propose larger tuition increases despite pending budget shortfalls because I realize that many students are heavily burdened already with student loans and other concerns. Our students should not bear the brunt of covering an anticipated shortfall in state funding for higher education."

The board vote was 13-1 in favor and also gave approval to:

• Increase Corvallis campus graduate resident tuition by 1.6 percent and non-resident graduate tuition by 4.5 percent;
• Adopt several 2017-18 tuition and fee changes for specific programs, such as the Honors College, the colleges of pharmacy and veterinary medicine, and summer term; and
• Increase Ecampus base tuition rates by 4 percent.

"Large tuition increases cannot sustain the mission of the university, much less its financial health and strategic priorities," Ray said.

Ray noted that Oregon State weighs a number of factors when considering tuition and fee increases, including affordable access to OSU; projected cost and revenue changes; enrollment and enrollment targets; and comparisons of tuition rates with peer institutions.

"When analyzing undergraduate tuition rates at peers such as Washington State University, Ohio State University and the University of Wisconsin, OSU compares favorably," Ray said. "Among schools in the Pac-12 conference, Oregon State has the second-lowest resident undergraduate tuition rate and the fourth-lowest non-resident rate."

Tuition represents about 70 percent of OSU's academic budget. Another 20 percent of the budget comes from the state, and other revenues such as grants make up the balance.

Inflationary cost increases contribute to about 40 percent of the need to raise tuition. The increase in tuition rates will cover roughly 20 percent of the university's total cost increases.

A little more than 75 percent of OSU's tuition revenue supports salary and benefits for Oregon State faculty, staff, graduate assistants and student workers. The rest covers supplies, equipment, classroom materials, utilities, insurance and other non-personnel costs.

Board members said they recognize long-term, predictable increases in state support for higher education are unlikely.

"The impact of flat state funding on resident students is significant," Ray said. "It can have lasting economic impact on individual students and on the entire state. We need the Legislature to step up and properly fund higher education. Meanwhile, we will do our part through transparent fiscal management, expense control, new revenue generation, enrollment growth and philanthropy."

Ray committed that if any additional state funds were provided, OSU would direct that funding to student success initiatives and emergency financial aid grants to help keep financially at-risk students in school.