Guaranteed Tuition Program

To Lock or Not to Lock: The Ups and Downs of Guaranteed Tuition Rates

The escalating costs of higher education are a national concern.  The past decade has witnessed unparalleled tuition escalation.  The combination of relatively stagnant state funding and increased expectations from colleges and universities have had a major impact on the sticker price of obtaining a college degree.  Even UCO has seen its share of significant tuition increases. 

Yearly Comparison              (24 UG Hrs)

Tuition Expense for Oklahoma Resident

Percentage Increase Compared With the Previous Year

Total Percentage Increase Compared with the First Year

Fall 07 - Spring 08

$2652.00

9.51%

70.92%

Fall 06 - Spring 07

$2421.60

7.68%

56.07%

Fall 05 - Spring 06

$2248.80

10.83%

44.93%

Fall 04 - Spring 05

$2029.00

14.96%

30.77%

Fall 03 - Spring 04

$1765.00

13.75%

13.75%

Fall 02 - Spring 03

$1551.60



(These ‘Tuition Expense' amounts take into account cost factors that have only impacted actual tuition rates but have not changed the overall cost of attendance.  For some years, the ‘Tuition Expense' is actually a combination of general tuition and enrollment fees.  They have been combined because the specific fee has been rolled into the tuition rate instead of continuing as an external enrollment fee.)

 Recently, some states have turned to plans allowing students to lock in a guaranteed tuition rate.  As these students and their parents consider their budgets, locked (or guaranteed) tuition rates make the expenses of college more predictable.  In Oklahoma, recent tuition lock legislation allows for (1) new, (2) first-time, (3) full-time (4) freshmen to ‘buy' a guaranteed tuition rate that will remain constant over four calendar years.  To do so, the student agrees to pay 15% more than the current tuition rate.  That rate, then, remains unchanged for four years unless the student becomes ineligible for the program.

Students can lose their eligibility for the program by dropping below full-time (12 credit hours) or withdrawing/not enrolling in a consecutive semester, excluding Summer.  They also lose eligibility for the locked rate when they obtain a degree in less than 4 years.  (Students who have their enrollments interrupted by military obligations are the only exception.)  Finally, students must commit to the locked/guaranteed tuition rate before the first day of the semester.        The following is an example of what would happen to a student as he/she committed to a locked tuition rate.

Academic    Year

Description

Tuition for 12 hours in Fall

Tuition for 12 hours in Spring

Locking a Fall tuition rate results in an immediate 15% increase in tuition cost.  Over 4 years, enrolling in 12 hours per semester could cost:

Fal 08-Spr 09

Rate prior to Lock

$1,420.00

$1,420.00

Fal 08-Spr 09

Locked Rate

$1,633.00

$1,633.00

Fal 09-Spr 10

Locked Rate

$1,633.00

$1,633.00

Fal 10-Spr 11

Locked Rate

$1,633.00

$1,633.00

Fal 11-Spr 12

Locked Rate

$1,633.00

$1,633.00

To graduate from UCO, a minimum of 124 hours must be completed.

$13,064.00



Students that commit to a higher, locked tuition rate agree to pay an increased amount now to cover increases that might occur within the next four academic years.  Assuming that enrollment remains constant at 12 hours per fall and spring semester, something pretty dramatic would have to happen to make this a good deal for students.  Consider the following example that begins with the same example tuition rate and assumes that tuition increases 9.5% each year.

Academic    Year

Description

Tuition for 12 hours in Fall

Tuition for 12 hours in Spring

If tuition increases by 9.5% each year and enrollment is in 12 hrs per fall and spring term, the cost would be:

Fal 08-Spr 09

Rate prior to Lock

$1,420.00

$1,420.00

Fal 09-Spr 10

9.5% Increase

$1,555.05

$1,555.05

Fal 10-Spr 11

9.5% Increase

$1,702.75

$1,702.75

Fal 11-Spr 12

9.5% Increase

$1,864.50

$1,864.50

To graduate from UCO, a minimum of 124 hours must be completed.

$13,084.60



So, students who commit to the locked tuition rate either believe that tuition could increase by more that 9.5% per year or they anticipate enrolling for more credit hours or shifting out of pocket expenses to the later years.  For instance, if the student enrolled in 12 hrs per term during the first two years, but enrolled in 15 hrs per term in the third and fourth years, the student could realize some savings.  (Refer to the following charts.)

Academic    Year

Description

Tuition for Fall

Tuition for Spring

Locking a Fall tuition rate results in an immediate 15% increase in tuition cost.  Over 4 years, enrolling in 12 hours per semester could cost:

Fal 08-Spr 09

Rate prior to Lock

$1,420.00

$1,420.00

Fal 08-Spr 09

Locked Rate (12)

$1,633.00

$1,633.00

Fal 09-Spr 10

Locked Rate (12)

$1,633.00

$1,633.00

Fal 10-Spr 11

Locked Rate (15)

$2,041.25

$2,041.25

Fal 11-Spr 12

Locked Rate (15)

$2,041.25

$2,041.25

To graduate from UCO, a minimum of 124 hours must be completed.

$14,697.00



But, even with this example, the savings would only be $171.10.

Academic    Year

Description

Tuition for Fall

Tuition for Spring

If tuition increases by 9.5% each year and enrollment is in 12 hrs per fall and spring term, the cost would be:

Fal 08-Spr 09

Rate prior to Lock (12)

$1,420.00

$1,420.00

Fal 09-Spr 10

9.5% Increase (12)

$1,555.05

$1,555.05

Fal 10-Spr 11

9.5% Increase (15)

$2,128.40

$2,128.40

Fal 11-Spr 12

9.5% Increase (15)

$2,330.60

$2,330.60

To graduate from UCO, a minimum of 124 hours must be completed.

$14,868.10



As one considers ‘to lock or not to lock' the tuition rate, one final point needs to be considered.  Oklahoma's tuition lock policy requires students to complete a minimum of 12 credit hours each term.  Dropping below 12 hours for a term would render the student ineligible for the locked tuition rate for all following terms.  It is an overt effort to keep students in school.  And, the reality is that many students will need to drop classes from time to time.  This adds an additional financial element to these decisions.

As a result, the desirability of locking tuition rates can only be considered on a case-by-case basis.  It can be managed in ways that benefit the student.  But, on the other hand, the up front cost may not be worth it, especially considering the possibility that the student can become ineligible for the lock.