BALANCING THE STATE COLLEGE BUDGET: WHY MUST TUITION INCREASE AND BY HOW MUCH?

The organizational setting for the case is a moderately sized public university with a total enrollment of 6,500 students. The major players are the Vice President of Finance (Percy Bradshaw) and the Director of Academic Computing and User Support (Gerald Radner). It is early summer and Percy is att...

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Bibliographic Details
Published in:Journal of the International Academy for Case Studies 2011-08, Vol.17 (6), p.43
Main Authors: Bradbard, David A, Robbins, D Keith, Alvis, Charles
Format: Article
Language:English
Subjects:
Budgets
Case studies
College presidents
Colleges & universities
Cost control
Decision making
Education
Enrollments
Expenditures
Land-grant colleges
State budgets
Students
Tuition
User services
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Summary:The organizational setting for the case is a moderately sized public university with a total enrollment of 6,500 students. The major players are the Vice President of Finance (Percy Bradshaw) and the Director of Academic Computing and User Support (Gerald Radner). It is early summer and Percy is attempting to finalize the university's budget for the coming academic year. His task is complex for several reasons. First, the state legislature has not completed deliberations with respect to allocations of funds for the coming year. Second, there was a budget shortfall in the current fiscal year that was covered by the university's reserve funds. The university president has stated this cannot happen again. Percy must present the president with a draft of the budget and he is feeling overwhelmed. Fortunately at this crucial decision time, Percy has a chance meeting with Gerald. As a result of this meeting, Gerald offers to show Percy several tools from Excel that might make Percy's task easier. Percy needs a way to present the budget so it can quickly be revised as the situation changes. In the case, Percy explains the major variables related to expenses and revenue. Based on this discussion, Gerald shows Percy a way to systematically vary tuition revenues to examine the effect of this variable on the budget. As state support for universities has declined, most state schools have responded by increasing tuition to offset the diminished funds from the state. Public state universities generally enroll both in-state and out-of-state students. Usually, state universities charge in-state students a lower tuition rate than out-of-state students. The higher tuition paid by out-of-state students provides an incentive for schools to enroll more out-of-state students. [PUBLICATION ABSTRACT]
ISSN:1078-4950
1532-5822