Out-of-State Tuition Waivers Proposed as Counter to HB 331

The Utah House Education Committee unanimously passed out of committee HB 75, a substitute bill that will grant tuition waivers to nonresident students effectively countering the negative impact of House Bill 331 on state universities.

Utah State President Kermit L. Hall said passage of this bill would provide an important five-year transition to ease HB 331's full impact. HB doubled the number of residency years and credit hours required of out-of-state students before qualifying for lower in-state tuition.

Proposed legislation is scheduled to be heard on the House floor Wednesday, Feb. 26. Passage of the bill will help to shore up Utah State's revenue base by permitting the university to continue to rely on out-of-state students to help subsidize in-state students.

"This bill will help us attract students from a market we lost with HB 331," Hall said. "We priced the product too high."

Without any transition help, it will require 3.5 in-state students to make up the revenue loss of one out-of-state student paying out of state tuition. He said it is unlikely Utah students could make up this difference.

Agriculture students living along the borders of Idaho and Wyoming were particularly impacted by passage of HB 331, many of them choosing to attend universities in their own states instead of paying the higher tuition to attend Utah State.

With the passage of HB 331, Idaho students, for example, were presented with a new option: remain in their state and pay $2,700 per year in tuition or attend Utah State and pay $9,300 per year in tuition for two years instead of one.

Utah Farm Bureau also expressed concern about the dwindling number of border students.

Wes Quinton, Utah Farm Bureau vice president for public policy, said a five-year transition period is a step in the right direction.

"If USU is to have a continuing strong emphasis on agriculture, we feel it is very important to help students in neighboring states attend school in Logan," Quinton said. "These individuals tend to stay in Utah after graduation to help strengthen the agricultural sector."

Hall encourages the university community to rally support around Rep. Loraine Pace's Substitute H.B. 75 because of the positive impact it will have on university resources. Utah State's budget was hit doubly hard a year ago when it chose to honor its commitment to students already enrolled and who expected to pay in-state tuition after one year instead of two.

For the university to retain 740 first-year students, it provided them with financial support to the tune of $1.2 million from discretionary sources. As a result, a substantial loss of budgeted tuition revenues was averted, Hall said.

By being able to provide tuition waivers in the proposed bill, the university could focus on regaining students it lost. For example, the number of out-of-state freshmen is down 249 students – 25 percent from 2001. In addition, the number of out-of-state undergraduate transfer students is down 154, or 25 percent from 2001.

Hall said this transition bill provides hope for the university to recover from this past year's out-of-state enrollment decline. Without it, using a multi-year analysis, he said the net tuition loss attributable to HB 331 could be over $3 million for the 2003 freshman class, with a similar or greater loss for the 2004 class and beyond.

Utah State's studentbody President Celestial Bybee said the proposed legislation is an important amendment to H.B. 331. It would allow the university a grace period to soften the severe budget blow it took when H.B. 331 went into effect.

"H.B. 331 drove out-of-state students away — quickly and without any time for Utah State to adjust to the budget impacts of the legislation," she said. "H.B. 75 gives us time to phase into the situation."

Bybee said the proposed legislation is something all the studentbody leaders from across the state support. Bybee is chair of the non-residency ad hoc committee of the Utah Council of Studentbody Presidents.

Southern Utah University, as well as other state colleges, were also greatly impacted by HB 331 and stands to benefit as well with the proposed bill.

The number of waivers awarded to the university would be determined by the Utah Board of Regents working closely with the presidents.