Student tuition fees account for about one-third of UBC’s operating revenues. Students and faculty expect UBC’s teaching and learning mission to be the top priority for the use of these fees.
The 2021/22 budget (see p. 7 of the pdf) assumes revenues from tuition fees to be $984 million, which is roughly split 60% international student (ISI) tuition fees and 40% domestic student (DOM) tuition fees. The total assumes increases in the tuition fee rates for the coming year.
At its meeting on April 7th, the Finance Committee of UBC’s Board of Governors voted to recommend to the Board the Administration’s plan to increase tuition fees for 2021/22.
The tuition rate increases applied to fees paid by current students returning to UBC would add $18 million to tuition revenues if the Board agrees to them at its April 19th meeting.
Further increases in tuition revenue come from new students paying the higher rates and from an increase in enrolment for 2021/22. (I am waiting for confirmation of the amount of these increases. A new reporting rule changes the way tuition revenues appear in the budget.)
Students oppose these tuition rate increases, and the student Governors have pressed the Administration to create an affordability plan and metrics to track how well UBC is addressing students’ needs.
The lone vote against the budget on the Finance Committee was Governor Max Holmes, one of the representatives for students on the Vancouver campus. He is the only student on this committee. [1]
The Administration has stated it would not be applying the Tuition Allocation Model (TAM) to this $18 million increment in 2021/22, which means the Faculties’ would not be receiving any of this money directly through the TAM. This applies to 2021/22 only at this point.
Instead, this money will be allocated to “COVID-19 impacted student priorities”. The AMS has submitted their priorities. (I cannot find a public document with the UBCSUO priorities.)
At the moment, most budget-related documents remain in closed Board dockets, and the current public version of the 2021/22 budget does not give full details for the intended allocation of the $18 million increment.
Faculties are responsible for absorbing inflationary costs in their budgets. This inflation is mostly due to salary increases for both faculty and staff beyond the base general wage increase (2%) funded directly by the BC Provincial Government grant.
Large faculties would absorb such cuts by using their reserves as well as revenues from any increased enrolments. Note this reduces the amount available to meet any increased teaching needs related to increased enrolments. This would also affect the faculties’ ability to support their future academic initiatives.
For some of the smaller faculties, particularly those with few programs attracting international students, sequestering the $18 million increment has the effect of imposing a cut that would further undermine their financial positions. In some cases, these faculties would likely require support to meet their basic expenses. (This support would come from the Revenue Sharing Fund discussed in Part 3 of this series.)
How might these tuition increases affect teaching and learning at UBC?
This question is less straightforward than one might think. (One of my greatest frustrations as a Governor has been figuring out how to engage the Administration in a conversation about the financial and operational health of academic departments [2]. Their contention is the TAM is working and “all is well”. I know too many cases where the TAM is failing and all is definitely not well. I am hopeful this conversation will finally happen over the coming months.)
To begin, we consider the resources an academic department has to put towards teaching and supporting students in its programs.
Consider the operating budget of an academic department I will call Department Q. Department Q’s operating budget does not include research grant revenues and the related research expenditures. Department Q’s teaching does not involve wet labs, clinical labs, studio work, etc.
Suppose Department Q’s (lean) budget of $10 million [3] is allocated as follows:
- 85% to faculty (tenure-track and contract) salaries and benefits,
- 7% to staff salaries and benefits,
- 6% to student teaching assistants (UTAs and GTAs), and
- 2% to non-salary expenses.
Like most UBC academic departments, Department Q is teaching at full capacity, which means increases in enrolment would result in increased teaching loads for existing faculty or hiring more contract faculty on a per course basis. (There is no known threshold for increased teaching that would trigger hiring new tenure-track faculty for Department Q.)
The inflationary costs for Department Q are primarily wage increases: 2% GWI + 2.5% PTR for faculty; 2% GWI + 1% merit for staff; and 2% GWI for student teaching assistants. Thus, Department Q needs an extra $400 thousand, or 4%, added to its budget.
About half of this is provided by Central passing on the government guaranteed 2% GWI to faculties (from the BC Government grant). The remaining $200 thousand needs to come from tuition revenue. Department Q is in a faculty where the Dean allocates this needed $200 thousand to the department. (Not all faculties work this way, so some departments would have to make cuts, meaning fewer TAs, fewer staff, or fewer faculty.)
In theory, tuition increases would result in more resources for Department Q (and other departments) to put towards its teaching mission. In practice, not so much.
Because the plan for 2021/22 is to sequester the faculties’ share of the $18 million increment (far less than $18 million, by the way), the dean of Department Q’s faculty would need to rely on new tuition revenue or faculty reserves to fund increases to salaries and benefits.
My back-of-the-envelope calculations tell me the effects for faculties of sequestering the $18 million tuition increment would be mitigated for many faculties in 2021/22 by increased tuition revenues from new students, to which the TAM applies.
(Even without the proposed tuition increases, increased enrolment of new students seems likely to be sufficient to cover the basic inflationary costs for many faculties for 2021/22. )
Are we forcing faculties to rely too much on increasing enrolments in their budget models?
Faculty budgets already rely on increasing enrolment as an important mechanism to manage inflationary costs and to build capacity to fund faculty-level initiatives and capital projects.
While the Administration speaks of flattening enrolments in the near term, there is still a background rate of increase of about 2% that is partly driven by the way UBC admits students. Some deans also speak of much higher rates of increase for enrolment as a key source of new funding.
Given UBC has almost $1 billion in tuition revenue, we should be able to provide our students with the kind of top-tier educational experience they are expecting from us.
I am concerned the current TAM is diverting too much of this revenue to the Academic Excellence Funds (not all of which are for academic purposes), leaving some deans looking for new sources of revenue for their faculties. Enrolment increases are the easiest way to increase revenue. (The TAM uses a 2016 baseline, which unfortunately means many more new students are needed to get significant new revenue in a faculty this way.)
This drive to increase enrolments also adds further stress to departments (like Department Q) already struggling to maintain their high quality programs with limited faculty resources.
Thus, diverting so much revenue from faculties and their academic departments creates and sustains financial and operational stresses in UBC’s teaching and learning mission. (These stresses are on top of unresolved problems from UBC’s previous decade of unmanaged enrolment growth.) Even with some of this money returned to faculties through central initiatives, the restrictions on such funding usually mean it cannot be used to address many long-standing problems.
(Centrally supported, research-based faculty hiring programs are important as well, but our current ones are not sufficient to address the broad faculty hiring in academic departments needed to also alleviate stresses in our teaching and learning mission.)
Should UBC increase tuition rates for 2021/22?
UBC is presenting a balanced budget for 2021/22. It is drawing a relatively small amount from its reserves to do this, but, unlike many public universities in the world, UBC is in a strong financial position.
The 2021/22 budget also includes significant expenditures for a number of new and on-going initiatives and capital projects. (The public version of the budget does not give many details for these.)
This is not an austerity budget.
I am moved by students’ arguments against increases this year: There have been many pandemic-related effects on UBC students and on what we have been able to offer them, and these effects deserve to be weighed in our decision. Should we not acknowledge this financially, at least for current students who are returning for 2021/22?
I also believe our current model for allocating tuition does not support academic departments and their teaching and learning missions as well as it should. This needs to change.
All in all, it seems hard to justify asking students to pay higher tuition fees until we can guarantee they will get the educational experience they expect from UBC.
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[1] There are no faculty Governors on the Finance Committee at this time, though its current chair engages with the faculty Governors regularly. This situation is under discussion.
[2] I use “academic department” to refer to the basic organizational unit for faculty in UBC; not all such units hold the status of “department”, formally speaking.
[3] I’ve chosen to scale Department Q’s budget to $10 million.