Portland State University undergraduate resident students could face an 11 percent tuition increase for the next academic year and the university would need to cut $10 million from its budget unless the State Legislature allocates more funding for higher education.
The proposed tuition increase and budget cuts in academic and student support programs approved Friday by the PSU Board of Trustees’ Finance and Administration Committee is necessary because the university will face cost increases of $18.6 million, said Kevin Reynolds, PSU Vice President of Finance and Administration.
The full Board of Trustees will meet on May 13 to decide whether to approve the committee’s recommended tuition hike and campus-wide cuts.
“We need a commitment of additional revenue support from the state to cover significant cost increases, particularly those that arise as a result of the underfunded Public Employee Retirement System,” Reynolds said. “Otherwise, we will need to make another painful round of reductions and require that PSU students — 58 percent of whom are on financial aid — will have to face a double-digit tuition increase.”
The preliminary tuition increase proposal — which assumes the state will continue providing PSU money from the Engineering Technology Sustaining Funds and Oregon Sports Lottery fund — is far from a done deal.
If the Trustees approve it, the proposal will still need approval from the state’s Higher Education Coordinating Commission (HECC), which needs to approve any public university tuition increase of more than 5 percent.
During the last legislative biennium budget session in 2017, both the PSU Trustees and the HECC approved a tuition increase of 8.9 percent in anticipation of a funding shortage. However, the state was able to come up with additional funding by the end of the legislative session, enabling PSU to lower its tuition hike to 5.45 percent.
“We continue to hope that this year’s 11 percent tuition increase proposal will not be the final number,” Reynolds said. “We will continue to advocate for more revenue support from the state to allow us to lower the tuition increase and pursue our mission to provide an affordable and high-quality education for Oregonians.”
So far this year, the legislative budget committees have allocated $40.5 million in new money for the next two years across all seven public universities. For PSU, that would mean only an additional $1.3 million next year — an amount that would not come close to covering the projected $18.6 million increases in retirement costs, benefits, and employees’ salaries and wages.
As a result, the seven universities are seeking at least $120 million in additional state money over the next two years to avoid cuts and large tuition increases. That amount will mean PSU can reduce its proposed tuition hike from 11 percent to 4.9 percent.
“Our goal is not to increase tuition unless it’s absolutely necessary,” PSU President Rahmat Shoureshi said. “Things may change a bit after the state receives its revenue projections.”
Luis Balderas-Villagrana, PSU student body president, said that while the Associated Students of PSU is recommending a zero percent tuition increase next year, he understands the reality of being underfunded by the state.
“I know a zero percent increase is not rational. But I am trying to be hopeful,” he said. “I am questioning whether the state will give us more money at this point. I believe all of the (public) universities in Oregon are in a crisis because we are not a part of a revenue package focused on higher education.”
The cost of a public university education in Oregon has shifted dramatically over the past 20 years from the state to individual students. Today, the state spends about $2,000 less per student on average in inflation-adjusted dollars than it did two decades ago.
The prolonged lack of state funding has forced PSU to make budget cuts in addition to tuition hikes. Since 2011, over 100 employees have been terminated because of budget shortages, while an additional 50 employees voluntarily retired early with PSU’s retirement incentive program. Many other positions have simply gone unfilled after a retirement.
The tuition graphic shows the amount of PSU resident undergraduate tuition increases based on various levels of state funding. Source: PSU Government RelationsThe $10 million budget cut proposal for the 2019-20 academic year will mean a reduction in campus-wide positions, primarily through attrition, and other cuts to the university’s academic and administrative divisions.
Of the seven public universities in Oregon, PSU is near the bottom on the amount of money it spends on a managers’ salaries per 1,000 students. PSU spends $339, compared to the University of Oregon, which spends $1,130.
“PSU continues to operate as efficiently as we can,” Reynolds said. “Additional budget reductions impact student services, student success, and core operations at the university in areas such as safety and compliance.”
A double-digit tuition increase will have a big effect on PSU’s 27,670 students, about 40 percent of whom come from families making $50,000 a year or less. That is significantly less than Oregon’s median household income of $60,212 and less than the U.S. median household income of $61,372, according to the U.S. Census Bureau. An overwhelming majority of PSU students live in the Portland Metro Area, Oregon’s most expensive region.
Even though Portland State’s current tuition and mandatory fees for undergraduate residents is $9,105 — an amount that’s substantially less than the University of Oregon at $11,898 and Oregon State at $11,211 — many PSU students are still struggling to make ends meet.
Because of that, several colleges at PSU have established a hardship fund to provide small grants for low-income students to remain in school and in some cases, put food on the table. For these needy students, an increase in their rent or problems with their cars can mean the difference between staying in school or dropping out.
PSU also has a campus-wide emergency loan that allows cash-strapped students to borrow up to $600.
Since a majority of PSU students are transfers — many of whom come from community colleges — the university’s proposed budget also includes funds for a transfer student success center to help transfer students make a successful transition to Portland State.