Few students join plan to lock in tuition rates

Patricia Drey

Some University students choose to pay more for their tuition – at least for the first year.

In exchange for the assurance that their tuition will remain the same for up to five years, students on the Guaranteed Tuition Plan pay a set rate that starts out higher than the current tuition rate.

Despite rising tuition, only a small percentage of University students participate in the plan, University officials said.

Fewer than 200 students per year enter the program on the University’s four campuses, said Peter Zetterberg, director of the Office of Institutional Research and Reporting.

Any incoming first-year student who is a Minnesota resident can participate in the plan, and new students are sent letters about the program, Zetterberg said.

The guaranteed tuition rate for this year is $7,384, making it $1,422 more than the regular rate of $5,962.

To set the rate, the University estimates future tuition and aims high because students do not risk overpaying, said Zetterberg, who helps set the rates.

If students on the plan graduate in fewer than five years and pay more for tuition than they would have on the regular rates, they receive a refund for the difference, he said.

Because she was guaranteed a refund if she ended up paying more, Katherine Hilbert said going on the guaranteed tuition plan was an easy decision.

“Either way you save money,” said Hilbert, a biochemistry, microbiology and genetics sophomore. “It wasn’t too much of a debate.”

If students on the plan take more than five years to graduate, their tuition rates and refunds are no longer guaranteed.

Because guaranteed tuition is intentionally set high, there is no cost to the University or other students for the program, Zetterberg said.

“The purpose of the program is not to save anybody money,” he said. Rather, the program’s purpose is to make tuition predictable.

The tuition plan first became available to Twin Cities undergraduates in the 1993-94 school year, and was expanded to include the other campuses the next school year, Zetterberg said in an e-mail.

High tuition increases in the early 1990s prompted the University Board of Regents to consider the plan, said University Vice Provost for Undergraduate Education Craig Swan.

The regents adopted the plan as a way to help students and their families better plan their finances, Regent William Hogan said.

Hogan said he did not know why more students do not use the plan. He said he thinks it is possible that under the 13-credit policy, students plan to graduate more quickly, making tuition increases a lesser concern.

“It is conceivable that if you finished your education in less time, then the tuition increases may not have been as much of a concern for you,” Hogan said.

There are many tuition plans emerging throughout the country, and Hogan said he expects the University will brief regents on these plans in the future.

While the University’s guaranteed tuition plan is optional, a mandate from the Illinois Legislature requires all students at state schools be given guaranteed four-year tuition rates starting this fall.

The semester rate for guaranteed students at the University of Illinois at Urbana-Champaign is $6,460 for two semesters. It is $446 more than the nonguaranteed rate of $6,014, said William Adams, associate provost at Illinois.

The university was concerned about offering guaranteed rates until it was assured it would be able to charge higher tuition in the first years of the plan to make up for the lack of increase during the four years, Adams said.

The amount students end up paying with the four-year rates should be about the same as they would pay with a typical tuition rate system, Adams said. One downside of the plan is that accounting will be much more difficult with multiple tuition rates at any given time, he said.

In Illinois, transfer students are also eligible for guaranteed tuition.