Tuition, meals and on-campus housing will soon cost more at the University of South Carolina and the administration is partly blaming the hike on Obamacare.
In the second paragraph of a press release published Friday, the university pointed its finger at the Affordable Care Act, as well as the rising cost of state-mandated employee pay raises, health insurance and retirement benefits. These combined expenses are expected to cost USC $17.7 million, spokesman Wes Hickman said.
A 3.2 percent tuition increase, approved by the Board of Trustees on Friday, will generate about $9.5 million for the Columbia campus. The increase will cost in-state students about $171 more per semester. "This is in keeping with the small increases of the past few years," the press release explained.
Both USC and Clemson University tuition increased approximately 18 percent between 2009 and 2014, according to data compiled by the S.C. Commission on Higher Education. The average increase among all public schools during those five years was 15.5 percent.
The USC Board of Trustees also approved roughly 3.5 percent increases for food and housing on Friday.
The university expects to spend up to $4.5 million during the first six months of 2015 implementing a provision of the Affordable Care Act that requires large employers to provide health insurance to employees who work more than 30 hours a week. This will include benefits for some adjunct professors who are not eligible under current rules.
"That's a huge chunk of money for our system to have to come up with, but it's just part of that total package of unfunded mandates," said Hickman, a former press secretary for U.S. Sen. Lindsey Graham.
The Affordable Care Act's large employer provision was originally scheduled to start Jan. 1, but the Obama administration announced last July that the rule would be delayed one year.
In theory, large employers have had plenty of time to budget for the added expense, said Colin Smoak, a benefits consultant in Mount Pleasant.
"It should be no surprise to anybody," he said. "Some employers - and I'm not saying they're one of them - will hide behind the 'didn't know' or the 'delays confused me.' "
A spokesman for the College of Charleston explained that the school budgeted for the Affordable Care Act last year. When the federal government announced the large employer delay, the college set that extra money aside, understanding that the rule was only postponed, not canceled.
USC was in the process of budgeting for the increase starting this year, too, but passed its 2013-14 budget two days after the delay was announced. It allowed the university to make a last-minute adjustment and pull that money from the budget, Hickman said.
This year, he said, USC was counting on help from the General Assembly to cover some of these costs. President Harris Pastides approached legislators during the budget cycle with a proposal called a "tuition time-out." The school vowed to hold tuition steady if the Legislature agreed to pass a "modest increase in base funding" and to cover some of the costs associated with pay raises, health insurance and retirement benefits.
"That didn't pass," Hickman said. "Next year, we'll start a new conversation."
Hickman said he was not aware that any USC employee hours have been cut to reduce expenses related to implementing the health care law.
A spokesman for Gov. Nikki Haley's office called it "a tragedy" that the Affordable Care Act makes it harder for students to attend school.
"Our state universities don't need a one-size-fits-all bureaucratic mess forced on them," Haley spokesman Doug Mayer said in a prepared statement. "They need the kinds of reforms that will streamline their operations and actually help students be successful - reforms the governor has and will continue to support."
Tuition for in-state undergraduates studying on USC's Columbia campus will be $5,579 this fall. Out-of-state students will pay $14,720 per semester.
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Press release from USC
The University of South Carolina family began this year's legislative budget cycle with great optimism. Students, parents and alumni joined in the call to freeze tuition in return for the state providing a modest funding increase and covering state-mandated spending increases.
Instead, USC will start FY2015 applying nearly $18 million toward the additional costs of state-mandated employee pay raises, health and retirement benefits and implementation of the Affordable Care Act.
Today, in an effort to cover those added costs and continue to maintain its excellent academic quality, the university's Board of Trustees approved a modest tuition increase averaging 3.2 percent - or about $171 per semester for in-state students on the Columbia campus. This is in keeping with the small increases of the past few years.
"State policy on funding public higher education is fast evolving," said USC Chief Operating Officer Ed Walton. "While state support for many public entities is being restored and sometimes surpassing pre-recession levels, the state's public higher education system is being increasingly funded by student tuition."
Walton noted that state support for USC has decreased nearly 40 percent from a high of $230 million in FY2008 (23 percent of USC's budget) to $144 million this year comprising only 10.8 percent of our total revenue. That's less than in-state tuition, out-of-state tuition, auxiliaries, research grants and philanthropy.
For its part, USC has persevered and continued to thrive as a destination of choice with record applications, record numbers of freshmen and graduates - and academics at an all-time high.
"We have done more with less, outsourced when possible and reduced costs in many areas in order to focus resources on the education mission at USC," said Walton. "USC cut costs and completely reworked its business model to successfully emerge from the recession. At this time, USC is a lean operation providing outstanding educational opportunities for South Carolinians at an excellent price. We are very concerned about the long-term effects of increased costs mounting upon the university without additional resources."
Walton further noted that USC has accomplished a great deal while keeping prices low. Both Princeton Review and Kiplinger's Personal Finance magazine rank USC as a best value in higher education, and U.S. News & World Report recently named USC one of the 15 most efficient national universities while ranking in the bottom half of resources available. Average out-of-pocket tuition and fees for in-state undergraduates in fall 2013 was $2,700.
"We are now at a critical tipping point," said university President Harris Pastides. "The current trajectory is no longer sustainable for our students, parents and taxpayers. We must ensure all South Carolinians have access to an affordable college education and the opportunity to earn workforce-ready baccalaureate degrees. Our state's future economic prosperity depends on it."