SD university officials worry about affordability

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PIERRE — Declining state financial support and rising tuition and fees could put college out of reach of many South Dakotans in the future, the president of the state Board of Regents told state lawmakers Tuesday.

Kathryn Johnson, head of the appointed board that oversees the six state-run universities, said students currently can afford to attend the universities and repay student loans. But she said officials are worried that will change.

“We think we’re all right. But when we look at the future, when we look at some of the trends, it’s very concerning,” Johnson told the Legislature’s Joint Appropriations Committee, which is putting together next year’s state budget.

Federal funds, as well as other sources, cover some parts of the university system’s budget. Yet state support of the higher education operating budget continues to dwindle. A decade ago, South Dakota covered 57 percent and students paid 43 percent, Johnson said. The Board of Regents has increased tuition and fees to cover these rising costs, and this year, student tuition and fees make up 61 percent, with the state paying 39 percent.

Student costs at South Dakota’s public universities are competitive with schools in neighboring states, but the Board of Regents will seek to manage carefully future increases to keep tuition and fees at an affordable level, Johnson said.

Tuition and fees at South Dakota State University, the state’s largest public university, are about $8,100 for a resident student this year.

Johnson said the loan default rate for South Dakota public university students was only 4 percent in 2009, much lower than the national default rate of 6.4 percent. Johnson and other university officials said the low default rate is an indication that students are getting jobs that allow them to repay those t loans.

“They’re paying their debts because they can,” Regents Executive Director Jack Warner said. Johnson said regents are using more programs to help students stay in school, but those programs operate on limited budgets.

Another problem is that 80 percent of the students hold jobs while attending school, Johnson said.

“That’s probably the No. 1 issue why students don’t complete college,” she said.

Gov. Dennis Daugaard’s about $793 million next year on public universities — about $151 million would come from the state and $190 million from tuition. The rest would come from federal money and other sources.

University officials said one of their top priorities is to give faculty and other staff a pay raise, since state salaries have been frozen for the last three years.

Daugaard has called for a 3 percent across-the-board pay raise for state employees next year and a one-time bonus to be paid this spring.

Johnson said the 3 percent ongoing pay raise for next year would require a tuition increase of at least 4.2 percent. And Warner said the proposed 5 percent bonus would be a challenge because state money would cover only $5.1 million of the $12.5 million total cost. If the state does not provide extra money to pay for the bonuses, universities will have to shift money from other programs to make the one-time payments, he said.

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