Henderson State University will increase tuition across the board next fall, trustees decided Thursday, going against the tide of schools retaining the same tuition rates during the coronavirus pandemic.
The Arkadelphia university has spent more than a year closely monitoring whether it can making payroll and, like most schools, is projecting a decrease in enrollment, and thus a decrease in tuition revenue.
In the past year, the university has increased its cash position, cut its budget and changed several operations, such as switching to a new health insurance plan and reducing the amount of debt a student can incur at the university.
Trustees heard Thursday about more developments, including the phase out of most of its low-revenue concurrent enrollment program for high school students.
The university will end June with a cash position of $1.7 million -- the amount available to access if the university needs it. It ended June of last year with a cash position of $288,911. That low position prompted the university to ask for a $6 million advance in state appropriations last July, all of which was spent by the end of the month on outstanding invoices and salaries.
"We are actually not good, but we're not broke," Vice President for Finance and Administration Rita Fleming told trustees.
The university is still behind on some of its bills to the tune of $3.2 million, Fleming said. That's still less than months ago, she said, noting that the total was $3.6 million just weeks ago.
Most outstanding invoices are less than 30 days pastdue, Arkansas State University System President Chuck Welch said. (Last year, the Henderson State board of trustees voted to merge the school with the ASU System).
The biggest bill is Sodexo, the dining services contract provider.
Trustees approved Thursday raising tuition from $231 to $240 per credit hour for in-state undergraduate students -- a 3.9% increase that amounts to $270 more per year for a student who takes two 15-credit-hour semesters.
The increases will be far higher for other categories of students: 11.1% for out-of-state undergraduates to $320 per credit hour, or $960 more annually; 10.3% for in-state graduate students to $310 per credit hour, or $696 more annually; and 18% for out-of-state graduate students to $414 per credit hour, or $1,512 more annually.
Mandatory fees will rise $5.30 per credit hour to $68, or $159 more for two 15-credit-hour semesters. Nearly all of that is for building maintenance and health facilities.
"We were what I felt was really low on our out-of-state graduate" tuition compared with other schools, Fleming told trustees.
The new tuition rates are part of a $67.6 million budget approved for next year, down from the $68.7 million budget approved for this fiscal year, which ends Tuesday. It's far less than the $73.9 million expected to be spent this year, about $4 million of which covers invoices from the previous fiscal year.
The budget also looks different because it more accurately reflects expenses, Welch said. Previously, Henderson State had been employing and paying people to work jobs that weren't in the budget, he said.
It was unclear Thursday evening how many positions that might have been, what their wages were and if they were permanent positions.
Much of Henderson State's recent budget deficits have been blamed on outstanding student debt to the university, totaling nearly $10 million last summer after more than $4 million was incurred in the previous year.
Some of that debt has since been collected, but Welch told trustees that the numbers have likely been overstated on student accounts receivable. Henderson State, unlike most schools, included the debt of students who registered for courses but who never ended up going to school.
Welch said he'd gotten a call recently from a woman who learned that she owed money to the university, although she never attended it.
"She should've been dropped," he said.
"In some of these cases," Welch said, "we're not going to know it's real or not until they get that collection effort or that tax office to call them. ... So there's a lot of moving parts with student accounts receivable."
Fleming additionally told trustees that current and former students who owed money to the university had been sent emails about their debt, rather than letters, to save money. But former students won't be checking their Henderson State email accounts, she said.
"We've got to start mailing," Fleming said, adding that students also need to be informed of their debts earlier than they have been.
While unpaid student accounts have been an issue for the university, trustee Creed Spann, who was appointed to the board in the spring of 2019, said three years of budget deficits is a bigger issue.
"That's the real culprit in this situation," Spann said.
Next year, university leaders intend to spend a bit more on scholarships and several hundred thousand dollars more on debt service. Water use is expected to double to $200,000.
The university will spend less on employee benefits, continuing with reductions in retirement contributions and a lower-cost health insurance plan.
The budget reflects an expected 5% decrease in enrollment.
Spann asked about the possibility of having to make more cuts during the year if enrollment turns out to be worse than expected.
Welch said he didn't want to make too drastic a projection or unnecessarily cut services, adding that predicting enrollment this early in the summer is more challenging this year than usual.
"I think we're going to have a lot of last-minute decisions," he said.
If it is worse than 5%, Welch said, he'll ask trustees to cut the budget in August or September.
Cuts would likely affect academics and athletics, Fleming said.
Registrations for the fall are down as compared with the past two years. As of June 19, 2,124 undergraduate students and 264 graduate students had registered for the fall, down from 2,403 and 329 fall registrants, respectively, during the same week last year.