Student fees delayed after proposal fails
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The arrival of new student fees has been postponed because Kent State and the Ohio Board of Regents couldn’t compromise on a funding method for the university’s $210 million bond proposal.
University officials proposed the fee in September to help pay off the university’s $250 million campuswide renovation plan.
Fees of $7 per credit hour would begin in 2012 and gradually increase to $24 per credit hour by 2016.
Now, that plan is obsolete.
“The Build America Bonds program is out of the question now,” President Lester Lefton said.
The bonds expire Jan. 1, and Kent State needed its proposal to be approved by Nov. 8 to have enough time to get the bonds on the market and picked up by investors. When that deadline passed, the university’s financial team scrambled, without success, to find a compromise.
Lefton said the bonds were ideal because they would have saved Kent State about $57 million. But now it’s simply too late.
Rob Evans, spokesman for the Board of Regents, said Chancellor Eric Fingerhut never received an acceptable proposal.
“We have a relatively simple test for each proposal that comes through,” Evans said. “And that’s right out of Strickland’s strategic plan for higher education. Increase the quality, while making it more affordable and therefore more accessible for more people in Ohio.”
Evans said Fingerhut’s biggest problem with the proposal was the student fee payment method.
But Lefton said renovations would be nearly impossible without some kind of student fee.
“Other universities that don’t use fees for their projects have higher tuitions,” he said. “But we’ve kept our tuition very low, so we need the fee. Even if we charged the fee, our tuition and fees would still be lower than Cincinnati’s, Ohio State’s and Miami’s.”
Evans said Fingerhut isn’t completely opposed to fees, but he would want to see cuts in other areas, namely Kent State’s regional campus tuition.
Lefton said he can’t afford to take money away from those campuses because he doesn’t want to cut the quality of their programs.
Evans also said there is a “whole universe” of other bond and loan funding options, especially for a borrower as reliable as a university.
The two parties will continue discussions, but Lefton said there will be no Plan B until he and the university’s Board of Trustees know next year’s budget, which won’t be introduced until March 15.
“The board (of trustees) feels it’s prudent, given the uncertainty of the budget situation, to defer any further decisions,” Lefton said.
Timeline: The rise and fall of Kent State’s bond proposal
June 2009: Kent State proposes a plan to the Ohio Board of Regents that would use bonds to pay for campus renovations.
Sept. 15: The Kent State Board of Trustees passes a $210 million bond proposal and campus renovation plans at its meeting. The board also approves a plan to use new student fees to pay back the bonds.
Sept. 21: Eric Fingerhut, Board of Regents chancellor, says no. He disapproves of the student fees and wants regional campus tuition to be cheaper. Fingerhut asks for a new proposal.
Nov. 8: Kent State’s deadline to get bonds approved and on the market passes without a final plan. There was a scramble to propose something agreeable to the Board of Regents, but the university’s financial officials reached no solution.
Now: The prospect of using Build America Bonds, which expire Jan. 1, is out of the question. University officials say they won't have a Plan B until around March, when they know what the next fiscal year’s budget will be.