PRESS RELEASE

January 10, 2003

Contacts: Sara Sanchez, Research Analyst
(801) 288-1838, ext. 121 (mobile phone: 718-1059 - available this weekend)
sara@utahfoundation.org

Stephen Kroes, Executive Director
(801) 288-1838, ext. 122
steve@utahfoundation.org

UTAH COLLEGES AND UNIVERSITIES LOSING NON-RESIDENT STUDENTS BECAUSE OF STRICTER RESIDENCY REQUIREMENTS

Utah Foundation today released its December report entitled "Utah's Regional Competitiveness For Non-Resident Higher Education Students." This research project was prompted by the implementation of Utah House Bill 331, which made it more difficult for non-resident college students to obtain Utah residency. HB 331 was enacted partly to provide additional revenue for the Utah System of Higher Education, but the expected revenue did not materialize, as many non-resident students seem to have gone elsewhere. This report examines how Utah compares to other western states in levels of tuition and residency requirements. The report should accompany this release; if not, it is available at http://www.utahfoundation.org/reports.html.

Highlights of the 16-page report include:

• Changes proposed in Utah's higher education residency requirements did not produce the revenue gain expected from House Bill 331. Some schools actually saw a reduction in non-resident students from the prior year.
   
• Although Utah higher education seems inexpensive on a national scale, other western states are also inexpensive, and Utah competes mostly with those western states for non-resident students.
   
• Over time, Utah non-resident tuitions have increased faster than resident rates, gradually eliminating taxpayer subsidies for non-resident students at most of Utah's colleges and universities.
   
• Utah higher education expenditures per full-time equivalent student have remained basically flat over 20 years when adjusted for inflation. At the same time, resident and non-resident tuitions have increased while tax funds per student have generally decreased.

Utah is similar to other western states in fostering a high level of access to higher education for residents. In fact, Utah spends a greater proportion of state and local government funds on higher education than any other state in the nation, according to the U.S. Census Bureau. Coupled with the sixth fastest growth in enrollment nationally, this policy has become expensive, leading to frequent tuition increases as state policymakers reduce growth in taxpayer subsidies for college tuition.

In the past, non-resident students have typically been able to attain residency before their second year in Utah, reducing their cost of tuition, but increasing the costs to taxpayers to educate these students. Utah's residency policy has been among the most lenient of western states, and even with the new residency law, it is easier to become a resident in Utah than in most other western states. Even so, the change enacted last year seems to have driven many non-resident students to other states. In doing so, the revenue expected from out-of-state students has not materialized. State estimators projected 932 additional non-resident students during the current school year, and they would have generated $5 million in extra revenue. Surprisingly, the non-resident student population only increased by 16 students statewide, leaving a $4.9 million shortfall in the revenue estimate. Utah Foundation Research Analyst Sara Sanchez said, "Recognizing that 54% of Utah's non-resident students come from western states, we need to be sure we stay competitive with those states when making changes to our higher education system."

Utah Foundation is a nonprofit, non-advocacy research organization. Our mission is to encourage informed public policy making and to serve as Utah's trusted source for independent, objective research on crucial public policy issues.