Council Reports and Forms

Special Tuition Degree Programs at the University of Saskatchewan

I. Introduction

As a public institution, one forged for the greater good of the province, the University of Saskatchewan has enjoyed a long history of financial support from the public treasury. The recent decline in that support is well documented. The University's revenues are now composed of a complex mix of private and public funding with an increasing amount dedicated to specific initiatives. Of particular importance in considering this mix is the growth of tuition revenue relative to government funding as a component of the University's operating grant.

With this general increase in dependence on tuition revenue has come suggestions for "special tuition" programs, that is programs whose tuitions are markedly different from the norm, as elusive as that norm might be. Often described as "cost recovery," or even "full cost recovery," these programs seek to impose a significant amount of the costs of delivery on the students who are enrolled. They take at least four forms:

  1. College Differential Tuition. In this model a College becomes a separate, independent, financial entity setting its tuition independent of other tuitions in the institution and purchasing services from the University. Some subsidization may remain but it is the result of a negotiated relationship between the College and the University and is the subject of constant monitoring. Failure to sustain enrollments at the tuition rates charged results in curtailment of programs or termination of the College.

  2. Individual Differential Tuition. This model presumes that individuals in the same program can, or should, be charged different tuitions depending on some personal attribute(s) including country or province of residence, nationality or grades. Most Canadian universities have experience with this model in terms of differential fees for international students, but others have experimented with different tuitions for "above quota" students. This latter strategy can be deployed only where demand for places is so great that students are willing to pay a premium even if the tuition paid by others for the same program or course of study is considerably less.

  3. Location Differential Tuition. Sometimes the same program is delivered in a different setting and the tuition fees charged reflect different costs or opportunities. Where programs are delivered to international students in their own countries, universities often presume that they are justified in charging significantly higher fees inasmuch as marginal costs are often higher, new risks are assumed, and local taxpayers should not be expected to subsidize the education of non-nationals.

  4. Program Differential Tuition. Some Colleges want to impose significantly different fees for different programs. Differential fees for different degree programs are familiar features of the tuition landscape, but what is contemplated here, is a much more dramatic departure from the traditional tolerances. The fees imposed would be markedly different, in spite of the fact that the same faculty and, to a large extent, the same facilities, are being used for delivery.

  5. Each of these "special tuition" situations is important and deserves attention, but this policy document deals primarily with the last of these initiatives and is intended to regulate and limit the development of this particular type of "special tuition" degree program to best serve the interests of the University. The words "regulate" and "limit" imply, intentionally, that the University is not endorsing the development of these programs as a means of overcoming financial problems. The question of appropriate tuition levels must be addressed at a general policy level, not via the accumulation of "special cases."

    On the other hand, as the principles and financial terms outlined below make clear, the University will permit special tuitions to be charged to enable Colleges to make programs available where circumstances would otherwise not permit. These programs are expected to provide relief to the operating budget and are welcome developments where they can be accommodated within a College's overall offerings. Of course, the availability of additional tuition revenue will not solve all of the resource problems that Colleges face and may create new impediments to the equitable distribution of resources. For these reasons, it is understood that these particular special tuition programs exist at the margins of a College's overall offerings. Under these circumstances, these programs should be seen as rare, "special," initiatives.

II. Principles

There are some principles that apply to all programs, but which are rearticulated here for emphasis in the context of special tuition programs:

  1. Special tuition programs must be consistent with the mission of the University and with its goals and objectives.

  2. In recognition of the University's role in the creation and dissemination of knowledge, all special tuition programs must demonstrate that they make use of the results of scholarship and research.

  3. All special tuition programs will be subject to the usual rigorous review processes employed in the establishment of existing programs and will be monitored through the on-going program review processes of the University.

  4. Other principles apply only to special tuition programs, or apply to these programs with particular force:

  5. Special tuition programs will be expected to contribute explicitly to both the University's general operating budget and to the support of other College programs.

  6. The introduction of a special tuition program must not displace existing students, reduce the opportunities for incoming students to find places in the regular programs of the College, create a privileged program staffed disproportionately by full time faculty, or have a negative impact on the long term resource allocations and staffing decisions of the unit delivering the program.

  7. Colleges introducing special tuition programs must ensure that the student experience in all College programs, both special tuition and regular, is of comparable quality.

  8. Although the expectation is that the vast majority of current degree programs will continue to be offered under the current funding arrangements, programs presently offered by any College (i.e. programs that have been previously approved, not just new programs) can be treated as special tuition programs provided their operation conforms to the principles and criteria outlined in this document.

  9. No special tuition program will be approved for longer than five years at which point an academic review must be completed.

  10. Where special tuition programs already exist, the onus is on the sponsoring College to provide a detailed explanation of the impact of an additional special tuition program on the College's regular program offerings.

III. Criteria

In addition to conforming to the principles outlined above, special tuition programs must demonstrate that they provide a net benefit to society, to the individuals enrolled in them, and to the University.

Social Benefit: The development and operation of the program should meet a conspicuous need, often expressed by a professional association, government agency or international body. If the program is intended to augment professional requirements, it should be clear that a University degree is the appropriate vehicle and that the course of study is consistent with the degree conferred.

Individual Benefit: The program should provide for a substantial enhancement of individual capabilities and the strong expectation of significant benefits to graduates.

University Benefit: A program will qualify for special tuition status only if it is deemed to provide adequate compensation to the University and sponsoring College. If the program is intended to serve a specific and identifiable clientele for a limited period of time, it must be subject to contract negotiations in which the University clearly specifies the limits of its obligations.

IV. Financial Arrangements

Special tuition programs draw on the University's total infrastructureÑits governance apparatus, its human resources, its capital structure, its risk-bearing capacity and its good will. The purpose of the financial arrangements outlined here is to ensure that these programs contribute to the replenishment of these resources. Those individuals charged with making supervisory decisions regarding these programs and resources will ensure that there is no conflict of interest regarding the distribution of any monetary benefits that may arise through the delivery of special tuition courses.

Two closely related concerns form the backbone of financial arrangements for special tuition programs: the recommending of tuition levels and the disbursement of tuition revenues. The principles set out below are intended to establish the rules to be used by the College and the University in reaching decisions on each of these issues.

Tuition levels and the identification of costs

Tuition levels for special tuition programs, as for all other programs, are set by the Board of Governors. In setting the tuition, the Board will have the benefit of a recommendation based on negotiations between the College and the University and an analysis supplied by the Budget Committee. The recommendation must respect the following rules:

  1. All costs and resources required to deliver the proposed program must be identified. Explicit costs consist of new, additional costs required to develop the program, including personnel costs, additional supplies and communication costs. Implicit costs consist of portions of the University's infrastructure, including administration (e.g. the Registrar's Office, the Business Office), support services (e.g. the Library, DAVS, Computing Services, and student services), and facilities (e.g., space, utilities, and custodial costs). Implicit costs will be the subject of negotiation, in the first instance, between the sponsoring College and the University.

  2. Explicit costs must be itemized; implicit costs will be estimated at the level of $3,700 per student. Estimates of explicit costs should employ university-wide standards and, where necessary, should be negotiated directly with the units providing the additional services. Estimates of implicit costs are based on the assumption that approximately 44 percent of the University's operating budget (in 1996, $5,300 per student) is used for infrastructure costs including depreciation. Removing depreciation from the equation yields the figure of $3,700 which can be used as a base to negotiate estimates and one which will be adjusted in tune with changing cost structures.

  3. The recommended tuition may exceed, be equal to, or be less than the full costs, but in all cases it will be determined with a knowledge of what the full costs are and with an appreciation of the long term financial viability of the unit delivering the special tuition program. It is intended that the tuition level recommended be the product of a negotiation between the University and the College in which both parties have all relevant cost information available. The sponsoring unit's viability, and the University's financial interest, will be critical factors in assessing the soundness of the negotiated tuition level.

The disbursement of tuition revenues

It is intended that the College and the University share in the revenues generated by special tuition programs in a manner that permits the College to cover all of its explicit costs and the University to recover some, if not all, of the implicit costs.

  1. Explicit costs become part of the program's operating budget and tuition income will be assigned to cover these costs. The program should be managed in accounts separate from the sponsor's base budget until such time as the program is firmly established. At that point the program's operating budget may be incorporated within the unit's base budget subject to a review of all financial arrangements. In the event that the tuition generated cannot cover the explicit costs, the Budget Committee will have the authority to forward a recommendation for the termination of the program.

  2. Implicit costs do not become part of the base budget of the sponsoring unit. The University is responsible for assigning tuition revenue in a manner that will meet increased implicit costs. Where these increased costs can be identified with a particular service unit, that unit may make a cumulative case for a budget increase.

  3. Once all explicit and all negotiated implicit costs, and any accumulated losses, are recovered, the unit sponsoring the special tuition program will have a claim on at least 50 percent of the residual revenue. Claims beyond the 50 percent level will be the subject of negotiation between the sponsoring unit, or College, and the University.

V. Procedures

Those units or Colleges seeking approval of special tuition programs should prepare a proposal which addresses the following:

Academic soundness. The assessment of this part of the proposal will be the responsibility of the Programs Committee of Council and the criteria employed should not differ in a meaningful way from the criteria normally used by this Committee in assessing other proposals for new programs.

Financial soundness. This part of the proposal will be the primary responsibility of the Budget Committee. The budget submission, which will be the product of negotiation between the University and the sponsoring College, should contain an enumeration of the full costs of the delivering the program (explicit and implicit costs plus implementation or transition expenditures), a recommended tuition level, and an explanation of the disbursement of revenues between the University and the sponsoring unit. This part of the proposal should also include an assessment of market demand, and a plan to address financial contingencies occasioned by revenue shortfalls from student attrition, unexpected costs, and changing market conditions. Where the program is jointly sponsored by an external agency, the proposal should detail the financial commitment this agency is making to the program, either through direct contributions or the provision of services/products in kind.

Appropriateness. The proposal should explain why this program ought to be offered as a special tuition program rather than a standard program. The Planning Committee will have primary responsibility for determining the degree to which the program succeeds in justifying this choice according to the principles and criteria outlined in preceding sections.