Approved by the: University Senate - November 30, 2006
Administration - See comments*
Board of Regents - no action required

* The President has asked Professor Geoff Sirc, chair of the Senate Committee on Faculty Affairs, for the opportunity to discuss the tuition proposal with the committee. Time on the agenda at their regularly scheduled meeting on February 13, 2007, has been reserved for this purpose. The President plans to issue a final presidential decision after that discussion.

Response issued September 22, 2008

I have met with the Senate Committee on Faculty Affairs (SCFA) where the committee presented a number of valid arguments in support of the tuition benefit proposal. Since then, I have also requested and reviewed a variety of options from the Office of Human Resources for developing a tuition benefit program for employee dependents, and have considered these options very carefully. All of the options were noteworthy, but they either added some level of new costs or they seemed to indirectly disadvantage a particular employee group. I also remain quite concerned about the public perception of providing this benefit at a time of rising tuition costs for all students and families, and declining state support. In light of the University's current budget situation and projections for the coming year, as well as the current cost of funding our fringe benefits, which have made the University of Minnesota one of the more competitive in higher education, I feel that the University simply cannot justify tuition remission for employee dependents as an additional cost and new program at this time.

The University is in the early stages of examining ways of providing more flexibility in its fringe benefits package, one that strengthens support for our employee needs while taking into account the costs constraints facing the University. We will be asking the University's Benefits Advisory Committee and key employee groups beginning this fall to help us identify creative ways for the University to maintain the core benefits like health care and retirement, which affect the greatest number of employees and protect the most important needs of all of our employees, while providing more flexibility in other fringe benefit areas to better meet the particular needs and interests of our employees.

We feel this approach could be an effective way for the University to recognize the tremendous value of its employees and to demonstrate good stewardship of public dollars.

Statement on Tuition Benefits for Dependents of University Employees

The Senate Committee on Faculty Affairs is disappointed and puzzled by the President's reaction to the recommendation from the Faculty Senate that the University offer a tuition benefit to the dependents of University employees. We offer the following observations.

1. The University is the outlier on the matter of tuition benefits for dependents if one compares it with other institutions in the state and in the Big Ten. MNSCU and the private institutions offer such benefits, as do seven of the eleven Big Ten schools. We are also well aware that members of the public are surprised to learn that University faculty and staff receive no break on tuition for their dependents.

2. We see the tuition benefit for dependents as one step toward the possibility of a tuition-reciprocity pact among employees of Big Ten or CIC schools. It is not possible to enter such a pact, should it be created, if the institution does not offer tuition benefits to its own employees.

3. Many of us on the Committee are aware of examples where a valued colleague has left the University, recruited away in part because our competitor was able to offer tuition benefits to his or her children/dependents. Adopting a tuition benefit would not only be a relatively inexpensive way to prevent the loss of at least some of the faculty who will help lead the University to the top three, but would also give us more leverage to recruit stellar faculty from private colleges and universities.

4. We remind the administration of the sophisticated study conducted by Professor Fossum and his colleagues a few years ago, which concluded that the cost of the tuition benefit would be outweighed by the cost to recruit and replace individuals who accept offers from other institutions because of the tuition benefit offered at the competing institution. A tuition benefit reduces employment costs by reducing employee turnover.

5. We are not persuaded by the argument that only 2% of University employees would use the benefit in any one year. We understand that half or more of the University's employees would make use of the benefit during their careers here. It seems to us unlikely that the administration would propose to drop faculty sabbaticals or phased retirement because only a tiny fraction of employees use the benefit in any one year.

6. The Committee continues to believe that a tuition benefit will improve the effectiveness, or at the very least the commitment, of its workforce.

7. We have been told that the question to be addressed, when allocation of resources is at stake, is where the University can get the greatest return on its investment. We accept that as a rational standard for making decisions. We suggest that the calculation would lead one to conclude that the modest amount of money required should be invested in a tuition benefit would generate a return, in employee morale, commitment, and retention, that is greater than many other investments might generate.

As we did last year, we again strongly recommend:

-- that the children/dependents of all full-time University employees (as defined by the University) having accrued 5 or more years of uninterrupted University service be granted a 50% tuition reduction upon being regularly admitted to an approved undergraduate program leading to a bachelor's degree;

-- that the tuition reduction apply for the first four years of a child/dependent's enrollment, during periods in which the child/dependent student is in good academic standing; and

-- that the percentage of tuition covered by the benefit increase by 10% for each additional year of uninterrupted service through year 10.

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