Amid financial struggles, UA may end tuition guarantee for undergrads. Hobbs isn't happy

The University of Arizona may end its four-year guarantee on tuition and fees amid financial instability.

But first, it will have to contend with Gov. Katie Hobbs. She said she is worried about the university's cash shortage, but doesn't believe it should cut financial aid to students.

"I think it's important that we make college as accessible as possible to Arizonans," she said Monday in response to a question from a reporter. "I don't think cutting financial aid should be the answer."

Her comments on the university's guaranteed tuition program and financial aid offerings come after President Robert Robbins told members of the Arizona Board of Regents, which oversees the school, that his university is experiencing major cash flow issues.

He and other university leaders previously forecast they would have 156 days of cash on hand this fiscal year. Instead, they have just 97.

For years, he and other university officials have poured money into improving the school's rankings, producing high-caliber research and attracting top students with lucrative financial aid packages and merit scholarships.

"We made a bet on spending money," Robbins said. "We just overshot."

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Now, UA leaders are preparing to pull back. Some student financial aid deals may be financed by a new university fundraising campaign called Fuel Wonder, Robbins said. That initiative, launched last week, has already raised about $2 billion of its $3 billion goal and will also put money toward research projects and student life.

But none of that money will help with day-to-day operating costs. Robbins said cutting the tuition guarantee, which helps insulate undergraduate students from rising fees, is an option on the table.

"That's a great differentiator for us," he told the regents. "But if it's going to cost us money, which it does, then I think we've got to look at another hard decision."

UA officials didn't respond to a request for comment from The Arizona Republic on the school's guaranteed tuition program and whether cutting it would impact students currently eligible for the program or only future cohorts.

A university spokesperson previously told The Republic that the school intends to "address its current budget challenges and emerge stronger and better prepared for future growth."

Hobbs said she is "concerned" about the university's financial situation. She questioned why university and state officials didn't know about the school's cash issues sooner, calling it a "potential lack of oversight" by regents.

As governor, Hobbs is a member of the board. But she and previous governors have rarely appeared at meetings, and she was not at the Nov. 2 meeting where Robbins and other university leaders discussed UA's financial position.

“It's something that we're looking into," Hobbs said. "This is a problem and it certainly should have come to light sooner."

Arizona Board of Regents spokesperson Sarah Harper said the board receives regularly scheduled budget updates from leaders of Arizona's public universities.

"The University of Arizona submitted their required update in preparation for the November committee meetings, and at this time the board office learned of the changes to their financial condition," she said. "The board published the information before the end of October and included a public discussion of the issue during the November 2 Operations Committee meeting."

UA officials must give the board a report and corrective action plan by Dec. 15, Harper said.

What is UA's guaranteed tuition program?

UA's guaranteed tuition program locks in fees and rates for undergraduate students for eight semesters from the time of their initial enrollment.

It aims to make degree costs more predictable for students and protect them from rising education costs, according to UA's Bursar Office. All undergraduate students enrolled in a bachelor’s degree program on the university's Tucson campus are eligible, regardless of residency status.

Under the multi-year tuition plan approved the regents in April, the guaranteed tuition program could save incoming UA undergraduates thousands of dollars in the next several years.

Resident undergraduate base tuition for new students this academic year is set at about $11,900, and nonresident undergraduate base tuition starts at roughly $39,300. Assuming tuition grows in accordance with the maximum growth rates approved by the regents, UA could increase its rate by about 3% annually.

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By 2028-29, that would put annual resident undergraduate base tuition at roughly $13,800, and annual nonresident undergraduate base tuition at about $45,600.

The regents also approved a maximum 5% annual increase in mandatory fees for UA undergraduates.

No other public university in Arizona currently offers an initiative for new students similar to UA's guaranteed tuition program.

Since 2013, Arizona State University has committed to annual tuition increases of no more than 3% for resident students in campus immersion programs.

In 2008, Northern Arizona University began offering "pledge tuition" for degree-seeking students at its Flagstaff campus. That program, like UA's guaranteed tuition, provided a consistent tuition rate for eight continuous terms.

The school discontinued the program earlier this year for incoming students after unveiling its Access2Excellence initiative, which offers full tuition coverage at its Flagstaff and statewide campuses to Arizona residents with a household income of $65,000 or below.

Sasha Hupka covers higher education for The Arizona Republic. Do you have a tip? Reach her at sasha.hupka@arizonarepublic.com. Follow her on X, formerly Twitter: @SashaHupka. Follow her on Instagram or Threads: @sashahupkasnaps.

This article originally appeared on Arizona Republic: Amid financial struggles, UA may end tuition guarantee. What to know