FAIRBANKS — Business students at the University of Alaska Fairbanks will pay at least a $35 per credit “tuition surcharge” for many courses starting next year, a fee designed to boost revenue for the rapidly growing School of Management.
The plan will add a surcharge of $35 per credit to upper-division business courses in 2014-15, while graduate courses will cost an additional $68 per credit hour. Those fees translate into a tuition hike of nearly 17 percent.
University of Alaska President Pat Gamble and UAF Chancellor Brian Rogers have signed off on the plan, which is expected to bring in more than $325,000 to the School of Management. Enrollment in the department, which includes programs such as accounting, economics and business administration, has swelled to about 700 students — an increase of 70 percent in the past six years.
School of Management Dean Mark Herrmann said without more revenue the school won’t be able to keep up with that growth. Without a financial boost, he said the business school faced likely reductions in faculty, courses and even its top-level accreditation.
“There’s no leeway anymore — about 94 percent of our expenses are salaries,” Herrmann said. “There’s nowhere left to go.”
The tuition boost was backed by the School of Management’s student advisory council, which represents several student business organizations. The surcharge will cost undergraduates an additional $2,100 for a degree. A graduate degree will cost $2,040 more.
Herrmann said those increased costs can be justified because a business degree attracts starting salaries that are higher than those of a typical graduate.
Faculty members are relatively well-compensated because of the strong salaries they can attract in the private sector, he said, resulting in an expensive program.
Using those same arguments, universities in more than 35 states have boosted tuition rates specifically for business students, he said.
The tuition issue has simmered since a similar proposal went before the UA Board of Regents in April. Regents deferred the decision to Rogers and Gamble in September, expressing concerns that the idea could result in a mish-mash of tuition rates if it were poorly implemented.
“It was a huge concern with the Board of Regents that the floodgates would be opened,” Rogers said.
Rogers, however, said he believes it’s unlikely the tuition surcharge model will become widespread at UAF. He said the engineering school, another expensive program with well-paid graduates, has no plans to pursue a tuition fee. No other departments have raised the issue, he said.
Rogers said a UA policy is being drafted that would limit the types of programs that could pursue a surcharge to “high-cost professional programs with good employment prospects for students.” Student groups would review any proposal before it advanced, he said.
Contact staff writer Jeff Richardson at 459-7518. Follow him on Twitter: @FDNMbusiness.