Dear Friend of Indiana University,

Last week, Indiana University’s Board of Trustees approved tuition and fee rates for all of our campuses for the next two academic years, and in keeping with our demonstrated commitment to provide an affordable, high-quality education, I am pleased to report that the increases approved were the lowest in more than 35 years.

Tuition and fees for Indiana resident undergraduates will increase an average of 1.75 percent each of the next two years, below the ceiling of 2 percent recommended by the Indiana Commission for Higher Education. Likewise, non-resident undergraduate students will see an average increase of 1.75 percent across all campuses, except for IU Bloomington, where tuition and fees will increase 2.75 percent each of the next two years.

To put this in perspective, the average cost of a typical 3-credit course for Indiana resident students will increase by less than $20 in absolute terms. Many of our students — more than 9,000 this year — will actually see no increase in tuition and fees for the 2013-2014 academic year under our “Finish in Four” program, which debuts this fall. This initiative provides a credit equal to any increase in tuition and fees to all students entering their third or fourth year on an IU campus who are on track to graduate in four years.

This program, along with our summer tuition discount initiative started last year, provides a powerful incentive for IU students to complete their studies in four years, which has been shown to be a major factor in easing the debt burden facing many students today. It also stresses the shared responsibility on the part of the university and our students on matters of time to completion and student debt.

IU Bloomington will receive $184.8 million in state funding in the coming year, a 2.5 percent increase from this year, while IUPUI, not inclusive of the schools of medicine and dentistry, will receive $96 million, up 6.5 percent from this year. The IU School of Medicine and the IU School of Dentistry, which are exempt from the performance funding formula because of their specialized missions, will receive a combined $109.4 million in state funding next year, a 3.5 percent increase from current levels.

IU also had 11 line-item requests, all of which received funding—most at current levels. In addition, IU will receive $2.5 million from the Indiana Economic Development Corporation to support research activities that specifically benefit the state of Indiana and another $1.45 million from the state to fund dual credit courses offered by Indiana high schools.

And it is important to point out that these lower tuition increases, as well as the “Finish in Four” initiative and the summer tuition discount program, apply to ALL Indiana University undergraduate students, regardless of the campus they attend.

As I said in my remarks to the trustees at the time of their vote on tuition rates, it is abundantly clear that in today’s global, information-driven economy, a degree from the right college or university is more important to an individual’s future success than ever. At the same time, there is growing concern nationwide that the cost of a college degree has risen beyond the reach of many students.

The question facing IU continues to be how do we balance the financial challenges faced by many of our students and their families against the need to maintain the academic quality expected of the state’s flagship university? Maintaining the high quality of an Indiana University education and the value of an IU degree is an obligation we have to all who come to us for an education. The degrees our students earn must continue to have market value and relevance to students’ lives, as well as be accessible and affordable.

We have wrestled with this issue for the past several years and have taken a number of well-publicized steps to become more efficient that have saved tens of millions of dollars at the same time we have moderated the growth in the “sticker price” of an IU education. Additionally, we have more than doubled the amount of institutional aid in the form of scholarships and grants provided to our students in the past five years.

As a result of all our efforts, I am proud to say that IU is consistently seen as one of the best values in higher education in the country. For example, IU Bloomington students pay the lowest average net cost of attendance, defined as the tuition, fees and living expenses minus scholarship and grant aid, of any institution in the Big Ten as calculated by the U.S. Department of Education. In addition, leading educational and personal finance publications such as Kiplinger’s and Fiske’s Guide to Colleges have ranked IU among the nation’s best for a combination of academic quality and reasonable cost over the last several years.

Just as all of us at Indiana University remain steadfastly committed to providing a high-quality educational experience for our students at a reasonable cost, credit also must go this year to the Indiana General Assembly and the Indiana Commission for Higher Education for their work during the recently completed biennial budget session to provide additional funding to public colleges and universities.

The Commission, working closely with IU and other public institutions, made meaningful changes to the performance funding formula that governs how a portion of state higher education funding is distributed and also recommended increased funding for higher education, which was approved by the General Assembly. As a result, IU will receive a 3.6 percent increase in its operational funding from the state next fiscal year, in addition to funding for several much-needed capital projects.

While state support for IU remains at the same level as a decade ago on some of our campuses and currently comprises 17 percent of the university’s total operating budget, the increased appropriation in the 2013-2015 budget and the constructive tenor of the recently completed legislative session are both very much appreciated, and will make a real difference in our ability to deliver a quality education, pursue important research, and maintain our physical infrastructure. We look forward to building upon our strong and positive relationship with our partners in the Indiana General Assembly and the Commission for Higher Education.

As we prepare for what I am confident will be another exciting academic year across all our campuses, I want to take a moment to thank all our employees — faculty and staff — whose hard work, creativity, talent and passion serve as a regular source of inspiration for me, and who continue to serve the needs of our students exceedingly well.

And, as always, the invaluable support of our alumni and friends around the world is very much appreciated.

Yours sincerely,

Michael A. McRobbie