Op3.04-15 Differential Fees
A decision framework for consideration of program-specific enrollment fees
As colleges at Missouri State University (MSU) advance proposals for program-specific enrollment fees, the Board of Governors needs a process by which to make an informed decision on approving or disapproving the request. Similarly, colleges should provide the Board guidance on how to assess the success of the fee in achieving the stated goals. This document seeks to lay out a framework to guide the Board on these two issues.
Front end decision for a new program specific enrollment fee proposal
A program-specific enrollment fee proposal should include three primary components. First, the proposal should include background and research that supports the request. Such items may include:
- Student demand;
- Expected impact on enrollment;
- Information as to whether this fee is usual and customary in the area;
- Peer and competitor analysis
- Job placement;
- Internship numbers;
- Pass rates on licensure exams;
- Admission to graduate/professional schools;
- Expected starting salaries of graduates;
- Expected use(s) of the fee,
- Total cost to students;
- Input that has been sought from internal and/or external constituencies, including student input.
Note that this list is not meant to be exhaustive or invariant. A college may tailor a request to the unique features of its college. The burden is on the college to make the case for the proposed fee.
Second, the college should identify how the fee revenue will be used to support university goals and objectives, with particular emphasis on enrollment.
Third, the college should describe the metrics that will be reported to university leaders on an annual basis. These metrics should correlate directly to the data used to support the original fee request. Complete the Request for Consideration of a Program-Specific Enrollment Fee form (Appendix A) to report these metrics. View all differential fee forms.
As a general rule, the starting point for the revenue split is 80/20, with colleges receiving 80% of the gross proceeds from the fee revenue, and central administration receiving 20%. However, the actual split will be tied to enrollment so that a downturn in enrollment would result in a proportionate change in the revenue split. For example, if enrollment declines 5%, central administration would receive 25% and the college would receive 75%. If enrollment increases, the college will receive a proportionate increase in the fee split. For example, if enrollment increases 5%, the college would receive 85% and central administration would receive 15%. The college and central administration will mutually determine the baseline enrollment number from which future enrollment numbers are measured. Typically this would be a three year average of undergraduate enrollment (assuming an undergraduate fee) with the most recent three fall semester enrollments serving as the look-back period.
The college and central administration may revisit the initially-agreed-upon enrollment target if there are changes in enrollment not attributable to the fee increase. Examples of such changes might include structural changes in colleges (e.g., a department moves colleges), the university may discontinue an international partnering agreement, or an economic downtown may occur adversely impacting enrollment. In such cases, the college and university leadership should discuss the situation and mutually agree upon any adjustment needed to the previously agreed upon target enrollment number.
In rare cases, a split other than 80/20 may be mutually agreed upon (for example, under difficult financial circumstances).
Back end accountability and stewardship
As a matter of public trust, as well as accountability and stewardship, colleges shall report annually by July 31 to university leadership specifically how much fee revenue was collected, how the fee revenue was used and how those investments improved college-related programs and attracted more and/or higher quality, or more diverse students, or improved student retention. Colleges should provide metrics that map back to their original proposal. Complete the Annual Stewardship Report for a Program-Specific Enrollment Fee form (Appendix B) to report these metrics. View all differential fee forms.
Every five years the college will prepare a renewal request to continue the supplemental enrollment fee and fee arrangement. The request should contain justification for continuing the fee, intended purpose of the continued fee revenue, fall enrollment numbers for each of the 5 years the fee has been in effect, and any supporting documentation needed by university leadership to make an informed decision on continuation of the fee and existing fee sharing arrangement. Complete the Request for Renewal of a Program-Specific Enrollment Fee form (Appendix C) to report this information. View all differential fee forms.
A college may request a fee increase within a given 5-year window. Increases in fees within a 5-year window do not alter the date which the 5-year renewal request must be filed. Complete the Request for Increase of a Program-Specific Enrollment Fee form (Appendix D) to initiate this request. View all differential fee forms.
Summary and conclusion
Ultimately, the most important criteria for deciding whether to approve a proposed program-specific enrollment fee is whether the fee supports and enhances university goals and objectives, and, in particular, its enrollment management objectives. Colleges then should demonstrate annually that the fee revenue was used to improve the program and attract higher quality and/or more students and report out using appropriate metrics. The university will review the fee arrangement every five years to determine whether to continue the existing fee and/or fee arrangement.
Approved by Administrative Council: August 6, 2012