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New Tuition Benefit for University Faculty and Staff

December 14, 2005

I am delighted to announce the adoption of an expanded tuition benefit program for University of Rochester faculty and staff with ten or more years experience whose dependent children matriculate at the University of Rochester.

The Faculty Senate, working with Provost Chuck Phelps, has for some time been exploring the wisdom and feasibility of increasing our current tuition benefits for faculty and staff. On November 15, 2005, a formal proposal was made by representatives of the Faculty Senate to provide (1) a full tuition benefit for up to four years of undergraduate education to dependent children of faculty and staff with ten or more years of experience if admitted either to the University of Rochester College of Arts, Sciences, and Engineering or the Eastman School of Music; and (2) to provide a portable benefit up to 30 percent of same year UR tuition for tuition costs at another accredited undergraduate institution. The portable benefit was proposed to be limited to faculty (including specified senior administrative staff).

Given our lack of experience with a 100 percent internal benefit or the proposed portable benefit, it is difficult to have a high level of confidence with respect to the cost of either tuition benefit. Provost Chuck Phelps and Professor Larry Van Horn went through a modeling exercise and calculated that their best estimate of the incremental cost of increasing the University of Rochester benefit from 50 to 100 percent would be approximately $3 million per year (that is, a total annual expected cost for the new program of $4.5 million minus the $1.5 million cost of administering our current program) and the incremental cost of the portable benefit would be approximately $1.5 million per year (that is, $2.3 million total expected annual cost compared to our annual current cost of $800,000), in each case when the benefits were fully implemented. Their analysis stressed their uncertainty as to how accurate their estimates could be before we have actual experience administering the proposed new benefits.

I have discussed this proposal with the Faculty Senate, separately with its Executive Committee, School Deans, the Senior Vice President and Vice Provost for Health Affairs, and the University's senior administrators. I benefited from their thoughtful comments. There was a general belief in the advantages of a more competitive tuition benefit system that would appropriately reward our loyal employees and enable us to be more effective in recruitment and retention. The academic administrators, at the same time, emphasized the budgetary challenges of initiating new benefits in schools or programs that currently are addressing such financial challenges as being competitive in terms of salaries, effectively addressing deferred maintenance, helping fund the build out of a new and extremely important advancement initiative, and in some instances facing uncertain levels of federal and state grant support, among other issues.

I have drawn three conclusions from these discussions. First, I am convinced that there are material advantages for the recruitment and retention of employees (both faculty and staff) in having an effective tuition benefit program. Second, we do have budgetary challenges that are greater than many of our peers and as much as the proposed benefits are desirable, we can not adopt all of the Faculty Senate proposals as rapidly as next year. Third, the key practical question becomes how best to phase in an expanded tuition benefit program that optimizes the advantages of such a program without creating unacceptable budgetary pressures on any school or division.

Beginning in the 2006-2007 academic year, solely on a prospective basis, the University will offer a 100 percent internal tuition benefit for dependent children of eligible University of Rochester faculty and staff who begin their undergraduate education on or after July 1, 2006. This will apply to dependent children of University of Rochester faculty and staff with ten years or more of experience. Given budgetary realities it will not apply to dependent children who have already begun their education here or elsewhere. This benefit will apply to all such undergraduate dependent children who matriculate as first year students either at the College or the Eastman School and will also be applicable to any other undergraduate program that operates now or in the future at the University of Rochester. As with existing tuition benefit programs, faculty or staff who have earlier worked at accredited colleges or universities will be given credit for the time worked at these institutions. As with the Faculty Senate proposal, all earlier programs will continue in full force. For example, our existing 50 percent benefit program will continue to be available for faculty and staff with five to ten years experience and the portable benefit will continue for faculty who began before 1996. For covered dependent children who on or after July 1, 2006 begin their undergraduate education elsewhere and who transfer to the University of Rochester, the benefit will apply to their undergraduate period at the University of Rochester. In all instances our normal admissions standards will apply.

After four years experience with the new and expanded internal benefit program the University will have a realistic sense of its expense. At that time, the University will revisit the wisdom of initiating a portable benefit.

I view this as an important new benefit for our faculty and staff. Most importantly, this benefit values what we do best here -- education. By providing the opportunity to the dependent children of all covered faculty and staff who satisfy our admissions standards to attend the University of Rochester, we are also reflecting our pride and confidence in what we do.

Early next year Human Resources will circulate further information about how to apply for the new benefit and will be available then and in the future to answer questions about the scope and operation of the new benefit.

In the meantime, let me wish all at the University of Rochester a happy holiday season.