Increased tuition and state funding is expected to cut Shippensburg University’s $1 million deficit to about $100,000 by the end of the semester, although it has the potential to increase by the fall semester.

Rising faculty and staff retirement and medical costs amounts to about $2.6 million in new expenses for SU, said SU president George “Jody” Harpster. The per-credit tuition plan that SU has implemented for next fall is expected to bring in about $2.5 million that can be used to bring down the deficit.

“The costs of that business have gone up,” Harpster said, referring to retirement and medical costs. “The state says ‘[the universities] have to take more and more of that burden on.’”

By the end of the 2016-17 academic year, SU could have to pull the same amount of money from its reserve funds, as it did this year. That does not take into account uncertain variables, such as the possible costs of rising faculty salaries, if the Pennsylvania State System of Higher Education (PASSHE) increases tuition, or if the state legislature gives PASSHE more funding.

“Even though we are way down in our reserves, $100,000 is not going to kill us,” Harspter said. “I have the ability to manage these small deficits for a much longer time than these big deficits that have been eating into our reserve account.”

Larger deficits drove SU’s reserve funds down by a few million dollars in previous years, leaving it at about $3 million, Harpster said.

The decreasing reserve funds sparked administrators to implement the per-credit tuition model.

When the plan was being discussed, Brendan Finucane, an SU economics professor and president of SU’s chapter of the Association of Pennsylvania State College & Faculties, said it was not necessary to close the deficit as quickly as administrators did. Raising tuition and cutting funding for departments can affect SU’s quality of education. Pulling money from the reserve funds could offset the need to raise tuition, but things have changed now

“That’s behind us now,” he said.

Per-Credit Tuition Model

SU’s president’s office emailed students last week to remind them about next semester’s changes to tuition, which will affect rates for full-time undergraduate students who live in Pennsylvania.

The three-year pilot program is expected to initially charge students 7 percent less per credit than the current rate. It will incrementally increase over the course of three years, at which point SU will decide if it wants to keep the plan.

Though students will be charged less per credit, it will raise overall tuition costs for about 60 percent of students, Harpster said. This is because the current tuition model is closer to a flat rate than the new one. This means students taking a different number of credits may have been charged a similar rate.

Under the new plan, the gap between the rates will be greater, causing some students to pay more, and others less.

The model is expected to generate $4 million in new revenue, but $1.5 million from the sum is committed to being used for financial aid to students struggling to accommodate for the new plan, Harpster said. The rest of the money will be used to close SU’s deficit.

A student who is taking 15 credits next fall is likely to pay about a $1,000 more for tuition than last semester, but may get need-based financial aid.

“Our commitment is we are going to give you as much of the $1,000 increase back out of this [$1.5 million] as we can,” Harpster said. “That gives me $2.5 million to put toward a $2.6 million deficit.”

To learn more about the per-credit tuition model, visit http://www.ship.edu/Tuition_Pilot/

To read about the history of the model read “PASSHE approves new SU tuition model” on theslateonline.com.

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