Students pay it every semester. It increases every year. They take out thousand dollar loans and sacrifice daily to afford it, but few know how the cost of tuition is determined.

The process that determines how much the state of Ohio will spend on higher education annually involves hundreds of different individuals, including students.

It led to the University’s six percent tuition increase announced last July, but began two years ago in the offices of the Ohio Board of Regents, which overlook the Ohio Statehouse.

While there are two years between budgets, the Board’s legislative liaison Ryan Scribner said, the process “is really on-going.”

Among other responsibilities, the nine-member, governor-appointed Board is charged with advocating for and managing the state’s funding of higher education.

Two important tasks involved in those responsibilities – determining how the funds should be distributed among schools and then recommending a higher education budget to the governor-have a direct affect on how much the University eventually receives from the state.

Funneling Funds

Before any funds are set aside for higher education, the board must decide how those funds will be distributed to students at 62 different state-funded institutions of higher learning.

Basically, the funds are divided into three main categories: need-based financial aid awards, instructional funding, and facility maintenance and construction (capital) funding.

Financial aid awards are primarily distributed through the Ohio Instructional Grant Program, which is being phased out in place of the Ohio College Opportunity Grant Program.

The OCOG program will make it possible for low income students to fund the entire cost of tuition through a combination of state and federal awards, a goal that the 30-year-old OIG program was failing to do in recent years.

OCOG appropriates funds based on several factors found on the Free Application for Federal Student Aid. The older OIG program only took into account the income of student and parents, not such factors as the parents’ assets.

“Under the new system, many more students will qualify for the maximum grant,” a Board release said.

$115.3 million was set aside for the OIG program in fiscal year 2005.

Other financial aid programs include Access Challenge and Student Choice Grants, which distributed $63.3 million to help keep tuition costs at public schools down and awarded $52.1 million to students at private institutions, respectively.

The second funding category, instructional funding, is distributed through a formula known as the State Share of Instruction.

This complex formula distributes funds to schools based on enrollment and types of degrees offered. Schools with more students enrolled in more costly degree programs, such as medicine, receive more money.

For fiscal year 2005, the General Assembly spent nearly $1.6 billion on instruction, of which Bowling Green received $74.2 million. The Ohio State University, with the highest enrollment in the state, receives $301.8 million.

Re-examining the formula for each type of funding is a biannual process that takes place as needed, according to the Board’s vice chancellor for Finance Rich Petrick.

“If a program increases in cost, we increase,” he said. “Every two years we examine the formula.”

This year, modifying the state share of instruction formula was looked into.

The Board conducted two feasibility studies recently. They were aimed at determining whether operational efficiency at a school or the number of degrees actually awarded at a school could be included in the formula.

The third funding category, capital funding, supports the construction and equipping of new buildings on a campus.

“If it is for construction it comes through the capital funding,” Scribner said.

The Board’s method of distributing capital funding is slightly different than the other formulas.

Instead of enrollment and cost of degree programs, it takes into account such things as the number and age of buildings on a campus, as well as how much the buildings are used and the lack of space on a campus.

For the next state budget, the Board is recommending the University receive $21.9 million for, among other things, basic renovations, an addition to the health center and replacement the Saddlemire Student Services building.

The Process

While the process of funding higher education or any other state program is always ongoing, the budget must be completed by a certain day occurring every two years.

The next deadline the state must meet is June 30, 2007. The state’s new budget year begins July 1, 2007. The governor will need to sign in to law the new budget by this day.

The Board will finish work on the formulas for distributing the funds, prepare their higher education budget recommendation and submit it to the governor before the State of the State address in January.

The governor will review the recommendations and make slight changes to them. In previous years, Gov. Bob Taft has increased funding before submitting it to Ohio House of Representatives, the next step in the process.

There will be a new governor making the decision to increase or decrease this year, however, as Taft’s term ends in January.

In previous years, the Board’s and the governor’s recommendations have been larger than what is eventually signed into law by the governor, according to Larry Weiss, the University Associate Vice President for University Relations and Governmental Affairs.

The governor’s recommendation is submitted to the Ohio House of Representatives by early February. Amendments are discussed, tabled or approved by the House Higher Education Sub-Committee and then the House Finance and Appropriations committee.

In early April, the House then votes on the budget and sends it to the Senate. At this point, Weiss said, the higher education budget has in the past been “devastated.”

The Senate’s Finance and Financial Institutions Committee, after debate and testimony from interest groups, students and parents, considers changes to and approves the budget.

After the Senate approves it, the budget’s next stop is the Conference Committee composed of three House and three Senate members.

The Conference Committee’s task is to combine the House and the Senate’s versions and have a synthesized budget approved by both governing bodies in time for the governor’s signature on or before June 30.

Then the increase

After the state’s two-year budget is approved, the funds are sent to the Board of Regents for distribution to the state’s schools.

Meanwhile, the University’s budget committee projects an operating budget for the next year, taking into account rising costs and state funding, according to Senior Vice President for Finance and Administration Christopher Dalton.

That budget gets sent to University President Sidney Ribeau, who approves and submits to the highest governing board of the University, the Board of Trustees.

The trustees, after reviewing the recommendations, approve the budget, which may include an increase in the cost of tuition. The state has capped tuition increases at six percent.

What can I do?

The two year budgeting process, with all of its committees and boards, may seem a bit daunting to the average student, but, Weiss said it is that constituent group politicians wish to see more of.

Ribeau agreed that the best way to get involved in the budgeting process is to find out who your legislator is at www.legislature.state.oh.us and contact them with concerns on the cost of higher education.

“More state funding allows greater access,” he said.

Petrick, on the other hand, felt that the best way to get involved would be to make one’s self aware of higher education funding policy by visiting the Board of Regents’ Web site at www.regents.state.oh.us.

Petrick suggested taking a class on state and local finance and being aware of other funding issues such as “the state’s over-investing in Medicaid.”