Washington universities won authority last year to vary undergraduate tuition rates according to what different degrees really cost. But before they start charging future engineers more than English majors, schools are grappling with how it would affect the state's prepaid tuition program.
To protect the solvency of the Guaranteed Education Tuition program, state and university officials and lawmakers are considering imposing new fees to help pay for expensive degrees -- fees that wouldn't be covered by GET.
State Sen. Jim Kastama criticizes it as a potential "bait and switch" for parents who were told buying 100 GET units would cover a year of their child's education no matter how high tuition climbed.
"Now they're going to get there and find out that only covers the cheapest degree at the institution," the Puyallup Democrat said.
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Kastama's stake in the debate is personal: He has a GET account for his 12-year-old daughter, who wants to be an engineer.
A change in the law
Washington's public universities are in the early stages of looking at charging more to enter undergraduate programs that are more expensive to operate. They already charge so-called "differential rates" for graduate programs such as medicine and law.
"I think every campus is going to be looking at how you can practically implement fee structures that more accurately reflect the costs," said Don Bennett, executive director of the state Higher Education Coordinating Board, which administers the GET program.
At the University of Washington, the differences could range from as little as $2,000 to as much as $5,000, said Randy Hodgins, vice president for external affairs at UW, where tuition and mandatory fees now top $10,500.
Bennett argues that GET needs a uniform tuition level to set its price and can't be expected to pay for differential rates.
GET "was never guaranteed to cover the full cost, because even today there are course fees, lab fees that aren't part of the calculation," he said.
When parents buy GET credits, they sign a contract with a similar disclaimer. Sen. David Frockt, D-Seattle, said the contract arguably lets GET off the hook for the proposed program fees.
But someone could challenge such a decision in court. Frockt has a proposal to spell out the authority more explicitly in law. It is scheduled for its first vote Wednesday in a Senate committee.
College students told lawmakers last week that they worry program fees could be a kind of "stealth tuition."
Andrew Lewis, government-relations director for the Associated Students of the University of Washington, said these large fees would be different from the course fees of perhaps $50 or $200 that some students are used to paying for music or science classes.
Frockt said he is looking to address the concerns, including a way to make sure students have input and ensure the fees are tied to financial aid. He is not sure if his bill will make it into law right away.
"I don't feel the urgency to fix it today," he said, "because no one's actually imposing differential tuition yet."
Desperate for engineers
A researcher at the University of Nebraska who looked at 165 public universities in 2008 found 45 percent of them charged differential tuition rates. Business and engineering were the most common programs to be pricier, followed by nursing and architecture.
The case for varying the price tag of an undergraduate education is simple: As long as schools charge all students the same, English and history majors effectively are subsidizing engineering and business majors.
Even with that subsidy, Hodgins said, tuition plus state money don't cover the cost of educating engineers. He said the UW has turned down hundreds of its own students who applied to the College of Engineering and were qualified, simply because the school couldn't afford to pay for more faculty.
"The state's desperate for engineers," Hodgins said. "Probably the only way we can realistically expand enrollment would be to add another fee for that purpose."
But if GET has to cover the fee, state actuary Matt Smith said, it could increase an unfunded liability that already stands at $688 million.
GET's risk of insolvency worsened last year when lawmakers gave universities the temporary power to set their own tuition. It improved when the program raised its prices to $163 per unit, or $16,300 for the promise of a year's tuition and fees.
Smith now gives the program's solvency a grade of B and sees just more than a 1-in-100 chance that lawmakers will have to shore it up with state money.
Frockt said the state might have to raid student financial-need grants or some other pot of money if the program isn't kept solvent.
An October report from GET said there are a few ways to ward off that risk: Redefine tuition or fees in some way, exempt GET account holders from being charged differential tuition or just cancel the authority for universities to set differential tuition.
Kastama, who is running for secretary of state, suggests if tuition is redefined, it should apply only to future GET buyers. But Frockt said that doesn't seem to fix the risk of insolvency.