Tuition fees will increase by an average of 4.31 per cent for domestic students and six per cent for international students, according to the tuition fee schedule presented to the Business Board on Monday. The hikes will go to Governing Council for final approval.

A 4.5 per cent hike will be applied to most undergrad programs, and four per cent to most grad programs. Exceptions are the eight per cent tuition increases for students entering pharmacy, engineering, dentistry, and law.

The board also heard the report for next year’s budget and long-range guidelines. After unprecedented endowment losses that led to the cancellation of a $62-million endowment payout in 2009, U of T plans to have a balanced budget next year.

The document also lays out plans for the next five years, which includes projects like a new student system to replace ROSI and a strengthening of infrastructure for research.

“It’s a well-balanced budget,” said Olivier Sorin, a graduate representative on Governing Council, happy to point out the increase in funding for merit-based scholarships. “Tuition increases, however? Not so great.”

Adam Awad, the president-elect of the U of T Students’ Union, called the tuition increase a move towards an increasingly privatized university that “continues to close doors to students from low and (increasingly) middle income backgrounds.” In an email to The Varsity, Awad wrote, “There are also some significant concerns over the Provost’s description of flat fees in the Faculty of Arts and Science as inevitable and permanent, in spite of the Governing Council’s mandated two-year review.”

Concerns

The budget report expressed concern that government funding won’t keep pace with the student population. With projected enrolment pressures that will continue at least until 2015, the report noted the potential for a “debilitating pro-ration of per-student grants.”

Pension liabilities continue to remain a concern. The combined pension plan deficit is currently over $1 billion. In February, president David Naylor announced that U of T would pursue a more conventional investment strategy, abandoning the aggressive style of big U.S. schools. There are plans to review funding strategies, investment risks, and return targets for pension funding in the coming months.

Balanced budget planned

Total revenue is expected to increase 9.4 per cent, from $1.44 billion in 2009-10 to $1.57 billion in 2010-11.

Last year’s cancelled endowment payout resulted in a $46 million loss for the operating budget, a loss that the budget acknowledges will still be felt in the coming years. A $45-million deficit fund was created to compensate. According to the report, divisions only drew $17.8 million from this fund, using unspent funds in endowment accounts as well as their own reserves to cover the shortfall. Since these funds have now been depleted, any future endowment issues cannot be similarly cushioned and would likely result in further budget cuts or increased burrowing.

Projected revenues have increased. A significant portion of tuition revenue increases is coming from international students and increased graduate enrolment, though revenue for doctoral students is typically a net zero for their first five years. The province’s tuition fee framework mandates that the average tuition for all students may not exceed five per cent a year. Though the mandate ends in April, U of T has assumed it will continue for the next few years.

*This article has been updated to include email comments from Adam Awad, president-election of the U of T Students’ Union.”