The Iowa Board of Regents will submit a report studying the possible effects of implementing a tuition guarantee, where tuition would remain the same for all four years of a student’s undergraduate degree. 

During a presentation of the report to the regents on Monday, Iowa Board of Regents Chief Business Officer Brad Berg said the report found that a select few universities nationwide have tuition guarantees, and historically, they have been stopped during economic downturns, which result in a decrease in state appropriations. 

Currently, tuition revenue makes up for roughly 70 percent of the regents’ annual budget, with only 30 percent coming from state dollars. This number has stayed mostly stagnant since 2018 and has not increased at the same rate as inflation. 

Berg said that typically, the largest tuition increases have coincided with a large decrease in state appropriations due to extenuating economic circumstances like the 2009 recession. 

Currently, the state’s general fund is seeing a decrease in revenue following income tax cuts put in place by Iowa Republicans. Berg said the income tax revenue is the “primary source of state support that the regents receive for operations.” 

“This creates uncertainty regarding this revenue source for us,” Berg said. 

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The regents also implemented a new tuition policy in April, mandating the board not to exceed an average of the previous three years’ Higher Education Price Index when setting new tuition rates, limiting the increases to inflation. 

“It’s a cap that we cannot exceed, that the board cannot exceed when setting tuition rates for the upcoming year,” Berg said. 

Berg said any tuition guarantee program “would need to be carefully designed and tested to avoid unintended consequences.” He also said the programs would require a large technical and administrative lift to implement and keep accurate records and billing for all of the students. 

“While this alone is not a barrier to implementing a tuition guarantee program, it does present complexities to ensure these systems can accurately track and enforce guarantees across multiple cohorts of students,” Berg said. “Implementation of a tuition guarantee program would require careful system planning and testing in the establishment of clear policies and ongoing coordination and communication with students and families.” 

The regents moved forward with submitting the report to the Iowa legislature as mandated by House File 440. However, at this time, they are not looking to implement a tuition guarantee and want to see how the cap plays out.