International Tuition Increases – 5 year plan

UBC has announced its latest round of substantial tuition hikes for international students. For most undergraduate programs, it will be increasing in the 40-50% range over three years. For some graduate programs the increases are up to 100%. Consultations will be held with students, but these will be limited it to where the university should spend the money. The amount is not up for discussion, according to Interim Provost Anji Redish. It’s at least a refreshing change of pace to hear straight up that nothing students could say would make any difference.

In spite of this welcome bit of honesty, there’s still a problem with the narrative presented. UBC’s consultation website suggests these increases arise from a Board of Governors directive which was passed in June 2015. In reality, these tuition increases, along with the 10% tuition increase last year, were planned at least as early as the beginning of 2014. That’s when the following slide deck was prepared for the Board of Governors for discussion in closed session. At the time, Toope was in his last few months, as was Pierre Ouillet (the former VP Finance).

2.2 2014.02 Operating Budget Outlook CLOSED

The presentation lays out UBC’s 5-year budget outlook from 2014 to 2019. As a financial presentation, on the surface it is a fairly mundane collection of numbers but it can yield interesting insights about things like revenue sources, priority areas of spending (counseling and health), concerns over research funding, rankings, and challenges with government funding. For international tuition, the relevant slides are 13 and 24, reproduced in part below.

Existing revenue sources (left) and areas of revenue growth over a 5-year period.

What these numbers are indicating is that from 2014-15 to 2019-20:

• Domestic tuition revenue, $232M in 14-15, will rise by $24M over a 5 year period and is projected to be $256M in 19-20.
• International tuition revenue, $126M in 14-15, will rise $154M over a 5 year period and is projected to be $280M in 19-20.
• The block grant from the provincial government, $519M in 14-15, will decrease by $6M over a 5 year period and is projected to be $513M in 19-20.
• Overall UBC revenue will increase by $202M over a 5 year period.

In other words, the university’s plan in early 2014 was to increase revenue from international tuition by 122% in just 5 years. During this time, it would become a larger source of revenue for the university than domestic tuition and account for more than three quarters of total revenue growth. Keep in mind that revenue isn’t directly correlated to tuition; growth could be from increased enrolment, increased tuition, or a combination. For the timeframe presented, growing aggressively on both fronts is necessary, and it’s clear that UBC is doing exactly that.

There’s lots of other interesting tidbits to glean from this set of slides, but we’ll leave those for another post.