1. UWF Tuition Task Force Findings UWF Board of Trustees June 2 nd, 2009 Tuition Task Force Members: Chula King Rick Harper Ron Bush Kim Bryan Amanda Clonts Pete Metarko

2. The Tuition Task Force was created by President Bense to gather information concerning likely impacts of possible tuition increases and provide it to the BOT at the June 2 meeting. President Bense requested that Provost King coordinate activities of the Tuition Task Force. It met for the first time on April 28 th and the membership consisted of: Chula King (UWF Provost), Task Force Coordinator Rick Harper (Economics/Haas Center), Task Force Chair Ron Bush (Distinguished University Professor/Marketing) Amanda Clonts (UWF Student Body President) Kim Bryan (Director, Office of Admissions) Pete Metarko (AVP Enrollment Services) The Tuition Task Force compiled information over the next several weeks in anticipation of the June 2 meeting.

3. Basic findings of the Tuition Task Force include the following: Florida has lower tuition per credit hour than all but two of the 50 states UWF in-state tuition is 14 th lowest among 15 selected institutions UWF out-of-state tuition is 10 th lowest among 15 selected institutions UWF’s in-state 2-year tuition increase is the lowest among the 15 institutions UWF’s out-of-state 2-year tuition increase is 12th lowest among the 15. The relevant literature suggests that enrollment is not price-sensitive. The consensus is that enrollment declines by about 1% for every $100 increase in tuition cost. Assuming no change in enrollment, a 15% tuition increase will yield about $2.16 million in new revenue in the 1 st year, after accounting for increased financial aid, prepaid tuition, and pre-July ‘07 enrollees. However: Target population in our core market area is projected to shrink over time. Target population statewide will also shrink, but much more slowly.

9. U.S. Freshmen Applications - Fall Semesters

10. Characteristics of UWF Enrolled Freshman – Fall Semesters HS Mean Grade Point Average3.5 % < 3.0% < 2.5 2008 15 1.9 2007 17 2.4 2006 18 3.5 SAT Mean1070 ACT CompositeMean 23 % Needing College Prep Courses ReadingWritingMath 2008 3 2 12 2007 4 3.5 12 2006 6 5 16

11. UWF Headcount Enrollment, Fall Semesters

13. Total Freshman Applications to UWF by Region

14. Previous Research on Price Elasticity of University Tuition The Price Elasticity of Demand (commonly known as price sensitivity) measures the rate of response of quantity demanded due to a price change. The formula for the Price Elasticity of Demand is: (% Change in Quantity Demanded)/(% Change in Price) Enrollment Percentage Changes per $100 Tuition Increase Between -.05 and -1.46% (Jackson & Weathersby, 1975) Between -.06 to -.8% (Leslie and Brinkman, 1987) Between -.5 to -1.0% (Heller, 1997) Under -.5% (Heller, 1996; Kane, 1995) Just over -.25% (Hernelt and Marcotte, 2008) Overall, the research consensus suggests that a $100 increase in tuition will result in slight (about 1% decrease in enrollment, other things equal.

15. Bright Futures Scholarships Not addressed by any previous studies on elasticity For this year, one-half of Florida’s university students received these scholarships From 75% to 100% of tuition was covered based upon grades/entrance test scores Formerly, these scholarships paid for tuition increases This year, these scholarships will NOT cover the tuition increases It is not certain how this policy (of not covering tuition increases) will impact UWF enrollment Our working assumptions: UWF enrollment will remain unchanged Tuition is raised from $82.03/hr. to $94.33/hr. Including fees – total cost per hour is raised from $123.30 to $140.34.

16. PROPOSALS UNDERGRADUATE TUITION & MANDATED FEES FLORIDA RESIDENTS May 12, 2009 TUITION Combined Mandated Fees TOTAL PER SH INCREASE PER SH TOTALS FOR: 15 SH 30 SH INCREASE FOR: 15 SH 30 SH CURRENT $ 1,849.50 82.0341.27 $ 123.30 $ 3,699.00 8% TUITION INCREASE + 5% TECH FEE $ 2,019.00 $ 169.50 88.5946.01 $ 134.60 $ 11.30 $ 4,038.00 $ 339.00 10% TUITION INCREASE + 5% TECH FEE $ 2,043.60 $ 194.10 90.2346.01 $ 136.24 $ 12.94 $ 4,087.20 $ 388.20 12% TUITION INCREASE + 5% TECH FEE $ 2,068.20 $ 218.70 91.8746.01 $ 137.88 $ 14.58 $ 4,136.40 $ 437.40 15% TUITION INCREASE + 5% TECH FEE $ 2,105.10 $ 255.60 94.3346.01 $ 140.34 $ 17.04 $ 4,210.20 $ 511.20

17. ANALYSIS OF DIFFERENT UNDERGRADUATE TUITION & FEES PROPOSALS May 12, 2009 % INCREASE TUITION $ INCREASE TUITION PROJECTED GROSS REVENUE DIFFERENTIAL TUITION AMOUNT DIFFERENTIAL REDUCTIONS NET DIFFERENTIAL TUITION PROJECTED REVENUE INCREASE 8%6.561,460,551 10%8.201,825,689365,138165,773199,3651,659,916 12%9.842,190,827730,276331,545398,7301,859,282 15%12.302,738,5341,277,982580,204697,7782,158,330

18. Using UWF Data to Calculate Elasticity Problematic, as during the 11 years that data on enrollment and tuition are readily available there are distortions due to: hurricanes; weak versus strong economy; and, a period of difficulty of International students obtaining visas. These factors have influenced demand, in addition to price of tuition.

19. Conclusions Our conclusion is that UWF should implement the full allowable tuition increase. We do not support increases in graduate and out-of-state tuition. The major reason in support of this increase is that the legislature has included the full tuition increase in our base budget, and that even with the tuition increase in place, spending cuts at UWF are still envisioned. The College of Business chairs and Dean support the move as a necessary response to a changed state funding environment. Enrollment response to tuition increases are generally small, so that is it almost certain that higher tuition will lead to a net increase in revenue to UWF.

20. Reasons not to include a tuition increase include: -The UWF core market will likely be more tuition/price-sensitive than most of the other 10 SUS market areas in terms of family incomes and the negative effect on enrollment. This is due to a combination of lower family incomes in NW FL and the lower share of the student body that receives other sources of financial aid (i.e., Bright Futures) than at other SUS institutions. High school graduate numbers in our core market will shrink over the next 6 to 8 years by a cumulative 16 percent from the levels of last year. Community colleges in the region will offer increasing numbers of BA/BS programs at lower prices than SUS institutions.

21. Bottom Line: The sense of the task force is that we need the full tuition increase, but must pay increasing attention to recruitment, retention and the quality of our students and their university experience while at UWF. The implication of smaller numbers of HS graduates in our area combined with higher tuition is that UWF will need increasing penetration in markets outside NW FL in order to maintain enrollment, much less grow enrollment. Resources will need to be devoted to marketing/recruitment in parts of FL with greater numbers of HS grads. This will call for better communication of our best assets to a new student/family market downstate.

22. UWF Tuition Task Force Findings UWF Board of Trustees June 2 nd, 2009 Tuition Task Force Members: Chula King Rick Harper Ron Bush Kim Bryan Amanda Clonts Pete Metarko