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Out-of-state, out of mind

Maine-native Sierra Connell is attending her second semester at UVM. She’s at her “number one school.” She’s volunteering, playing flute in concert band, spending her nights going to music events and hanging out with friends.

Now, she’s leaving.
Sierra Connell UVM
First-year Sierra Connell volunteers at the South Burlington Energy Prize Kick Off event at Frederick Tuttle Middle School in South Burlington Jan. 24.

Natalie Williams

Before she could graduate high school, her father passed away and her mother became too injured to work. Without financial support, she had to take out $18,000 in student loans for her first year of school. Now she doesn’t want to graduate with $100,000 in debt, she said.
“I shouldn’t not be able to go because things happened to my family and I don’t have money,” Connell said. “It’s not like my family [is full of] drug addicts. There’s no reason why I shouldn’t be able to go to the school I want to go to.”
Former student Aiden Holwerda was a biochemistry major in his first year, who spent his weekends skiing with friends at Jay Peak and Stowe. Now he works at a brickyard and attends community college near his hometown, Wyckoff, New Jersey.
He said he was aware of the cost of going to UVM as an out-of-state student, but that he didn’t understand the magnitude of the situation until it was too late. In order to attend a second year, he would’ve had to take out a $30,000 loan.
“I ended up not feeling comfortable with it, so I ended up coming home, with hopes to find a cheaper way to get through school,” he said. “If [the money situation] worked out I would have been able to stay, however I’m home now and I’ve just got to make the most of my scenario.”
Out-of-state tuition at UVM is the fourth highest in the country. Contributing to the high tuition cost is a barely-known state law called the “40 percent rule.”
The law limits in-state tuition to 40 percent of out-of-state tuition. In other words, out-of-state tuition must be two and a half times more than in-state. The 40 percent rule is specific to UVM. Vermont was supposed to provide money to UVM to make up for the discount.
Over the 56 years that this rule has been in place, this has not happened. Now out-of-state students are paying for it.
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Illustrated depiction of the 40 percent rule.

Alyssa Handelman


Unsustainable

In 2012, Gov. Peter Shumlin ordered the creation of an advisory report on the state’s relationship with UVM. The report gave 12 recommendations; one of these was to change the 40 percent rule.

A Vermont resident who is enrolled in the University as a full-time undergraduate student shall not pay tuition in an amount that exceeds 40 percent of the tuition charged to a nonresident student. The actual law: Vermont Act 16, Chapter 17, Subchapter 1, § 2282
“It is imperative that the 40 percent rule be modified or the future viability of the university is in jeopardy,” stated the report.
The advisory board could not identify another public college or university in the U.S. which had any similar rules.
Holwerda believes that the fact UVM has to charge out-of-state students two and a half times more to do this is “absurd.”
“I was aware of [the cost] but I didn’t know the magnitude of the situation until I was at school, and realized that it was an enormous sum of money,” he said.
The 40 percent rule caused out-of-state funding to make up the difference. This situation is “unsustainable,” according to Shumlin’s 2012 report.
A little under $21 million of the state’s money goes to the university to pay for this rule, according to UVM’s 2014 appropriation request. Looking at the number of in-state undergraduates attending UVM now, the state should be supplying over three times more, about $63 million.
Though recognizing “how small Vermont is,” the university wishes it could receive more funding, said Richard Cate, university vice president of finance and treasurer.
“I mean, the bottom line is tuition is higher because the amount of money we get from the state is less,” Cate said.

A law forgotten

When the state made the law, they put a “placeholder for a percentage,” without “debate or reflection on its meaning or its consequence,” President Tom Sullivan said.

“The history is that the 40 percent rule was literally not debated in the legislature when it went into effect in [1959],” Sullivan said.
Sullivan then went on to detail a legislative vanishing act — the part of the law noting the necessary state funding was cut out.
There was a second sentence after the law requiring the state to financially support the rule, he said.
“For some reason, the second sentence got taken out a year or two after, with virtually no one paying attention,” Sullivan said.
He likens the situation to driving a broken wheelbarrow: “We’re going down the road with both wheels on, and all of the sudden one is taken off…you need both pieces.”
Rep. Peter Fagan, vice chair of the House Appropriations Committee, has an idea of why Vermont lawmakers don’t know much about the rule.
“We’re not looking back at how did this evolve over time,” Fagan said. “We’re just looking to see what is the law as it’s currently depicted.  Going back in time like that is something that I doubt very few people will do.”
Holwerda thinks reflection on its laws is something the government should do more.
“I think that the law should be constantly reviewed and geared towards the students rather than the state,” he said.

Rule or restriction?

The state sees the 40 percent rule as fantastic in its intention to make Vermont higher education affordable, said Alyson Richards, director of Special Projects and Intergovernmental Affairs for Gov. Shumlin’s office.

“We of course applaud and appreciate the fact that Vermont students should get discounts in their home institutions and UVM doesn’t necessarily, in our discussions with them, feel differently,” Richards said.
For President Sullivan, this is “not a complicated story”: as the years have passed and state appropriations have gone down, the rule has become more of a restriction for the university.
“You have the 40 percent rule, no dollars coming to us for new buildings and the lowest appropriation in the country. Those three [things] are huge restraints on us,” Sullivan said.
The lack of state funding has become a problem which has fallen on the shoulders of out-of-state student tuition. As UVM and Vermont State Colleges have gone on to erect new buildings, the cost of construction has been and will continue to be filled by tuition dollars, according to Shumlin’s 2012 report.
“The more support you get from the state, the less pressure you have to put on the tuition,” Sullivan said.
The 40 percent rule acts as a restriction by linking both in-state and out-of-state tuition together, said senior Aya AL-Namee, SGA president.
“You can only raise one to a certain point because you know how much that will affect the other one. That limits how competitive our schools are,” AL-Namee said.
To Clarence Davis, university state relations director, the state has not been as “heavily invested” in public higher education as other areas, but has a limited amount of funds it can give.
“I’d like to see more investment in higher education. The state has decided to spend the limited resources it has,” Davis said.
The state’s decline in funding for the University was not a decrease in actual dollars, but a failure to increase proportionate to the amount needed. From 1960 to 1980, the make-up of state funding in the school’s budget dropped from almost sixty percent to roughly half of that, and currently its 13.8 percent, according to data supplied by Cate.
“The amount hasn’t decreased,” he said. “It just hasn’t grown.”
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Data compiled and organized using UVM Sourcebook, information supplied by Richard Cate and Google Sheets.

Abby Holmquist

Last year, Gov. Shumlin passed a bill mandating the Vermont PreK-16 Council to develop a plan to raise funding in UVM and Vermont State Colleges’ budgets. So far, the only proposal given was to increase appropriations by $1.3 million through taxing the possible sale of recreational marijuana and lottery funds. This plan was abandoned by the committee in early January, shortly after it was brought to the table.
The idea that UVM could accept funds from the sale of drugs in particular is “hypocrisy on its own,” AL-Namee said.
“Taxes off marijuana towards education is the biggest joke I’ve ever seen in my life,” she said.
Currently, Vermont is facing a $92 million budget gap. This is ultimately the main issue and priority at hand, said Rep. Mitzi Johnson, chair of the House Appropriations Committee.
“I mean – I went to UVM. I paid out-of-state tuition when I went [there]. I certainly understand the dilemma, and I know that UVM offers incredible opportunities for students, [but] my current job however is to pass a balanced budget,” Rep. Johnson said. “We’re taking all kinds of steps to figure out how to really measure results of our investments, what kind of returns are Vermonters getting on [them and] how well do various programs work.”

To repeal or not to repeal?

Connell, who is moving to New Hampshire with the goal of qualifying for in-state tuition for schools there next year, understands the rule and its purpose but feels “bad for the university.”
“I know that no one wants to charge people that much, and it’s unfortunate that these laws are in place and it doesn’t really make sense,” she said.
However, the opponents say that changing the rule would possibly do more harm than good. As Fagan said, one must be wary of the “unintended consequences” behind removing a rule that has been around for so long.
“Understand what you do before you do it. It might sound good, but once you begin getting into the [outcomes] it might not turn out to be quite such a good idea,” Fagan said.
For UVM, ditching the 40 percent rule’s restrictions is an asset and that it would help to be more competitive on price and affordability, Davis said.
“If the 40% rule is abolished, its one more tool in the toolbox for the administration,” he said.

Story by Jacob Holzman, Krista Cantrell and Sarah Olsen. Banner photo illustration by Luci Lobe.

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17 Replies

  1. This site is really interesting. I have bookmarked it. Do you
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  2. Good for the Cynic for writing this story. Please follow-up with more detail and more meat on your implied solutions.
    Sadly, I felt the story to be full of holes. Having just heard this mentioned on VPR, and after reading it here, I’m left with the impression that this is, in fact, written for the benefit of out of state students (apparently the authors are not Vermont students.) The examples of out-of-state students “surprised” by the tuition makes me wonder how those students were able to matriculate in the first place. They didn’t read the documents before coming? And in terms of repealing the law and allowing the university more tools in the toolbox, what would those tools be, exactly? How do you reduce tuition for out-of-state students, in an environment where there are NO NEW DOLLARS from the State of Vermont, and not raise tuition for in-state students? Your article seems to laugh at the fact that state legislators are only considering their constituents by not taking action. I’m sorry, who else are they supposed to listen to? Residents of Wyckoff, NJ? (I’ve lived there, used to be very nice in the 70s.) Are we “locals” supposed to believe that in-state tuition won’t increase because someone pinky-promised? I think the Cynic has the opportunity to flush this story out a bit. Please take it.

  3. UVM needs to take a more critical look at it’s finances. Look at the graph. The General Fund Budget has more than doubled in less than 20 years. This is not sustainable. Perhaps there is (way) too much administration and the administration in place is too highly paid. Also, why do employee dependents receive free tuition? This benefit is massive and not taxed.

    • UVM expenses are what’s not sustainable. Too much administration, two little teaching by FT faculty. Try cutting expenses. How many programs have too few students to make it “worth it” There’s no organization on earth that can’t be cut 10% , Cut , not just reduce the growth in expenses.

  4. If you believe UVM that in state tuition for undergraduates will NOT increase if the 40 percent rule is repealed…tell me another one….as a past trustee I know better. It might be that way for the first few years, but after that when no one is watching in no time Vermont students will see increases because of increasing costs to UVM for operations!

  5. Somehow no one from UVM or the state put forward in this article, what the cost would be forVermonters going to UVM if the 40 percent law was repealed. Is it because it would cost Vermont students more ? UVM has been on a spending spree the last six years that has caused many of the financial problems it now faces…now the answer is who is going to pay for this! It looks like the students.

    • UVM went on the record during our investigation stating that in-state tuition for undergraduates would not increase if the 40 percent rule was repealed.

      • If you are implying that UVM tuition can’t go up in the event of a repeal simply because some undisclosed member/members of administration went “on the record” during a Cynic interview saying it wouldn’t then it seems you are being VERY naive.

        Why is it that you never once mention in this article that in-state tuition is the 7th highest in the country? Perhaps the problem is less the cost of out-of-state tuition in proportion to in-state tuition then it is why the cost of tuition is so high at all.

        Good on ya, Mr. Zampieri.

      • I feel like I’m missing something here. If in-state tuition isn’t going to go up as a result of this change, then why is the change needed at all? Is UVM planning to reduce out-of-state tuition?

    • I couldn’t agree more!!
      UVM will be digging itself out of the hole that Dr. Fogel created for decades. Perhaps UVM could sell one of the LEED-certified monoliths that stand as a memorial to his ego.

    • It boils down to what our priorities are. We would never consider charging high school seniors for the cost of their education. Regardless that the high school education is paid by property taxes, charging students is a terrible concept. It is to our communities good that we have an educated population. Shame on us for not prioritizing secondary education. College grads graduating with $150K in debt ?? Despicable.

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