By Mackenzie McCoy

The Bureau for Private Post-Secondary Education (BPPE) is in a difficult financial position. With the bureau’s operating budget continuing to be slashed, a majority of the Bureau’s funding comes from the annual fees paid by the post-secondary schools regulated by it.  The Bureau plans to take out a loan for $8 million to be used for immediate operating costs. Even with the added loan, the BPPE will fail to collect sufficient funds for its existing budget and requires other sources of revenue. The fact that the instant loan must be repaid within 24 months underlines the deficiency.  Taylor Schick, a Department of Consumer Affairs (DCA) staff member, stated at the BPPE’s most recent Advisory Committee meeting that the Bureau’s special fund is projected to become insolvent in the current fiscal year. The DCA projects that it will collect $14.6 million in revenue this year, falling substantially short of the projected $21.2 million in expenditures. It is predicted that this deficit will only increase in the following year even before considering the repayment of the $8 million loan. Most of the Bureau’s revenue stems from the singular annual institutional fee that each school pays to the BPPE. That amount paid is based on the revenue that the respective institutions bring in each year.

The DCA recommends two alternative fee adjustments that may help to increase revenue. The first solution presented is to institute a base fee of $3,500 to all institutions that are monitored by the BPPE. This base fee would allow the BPPE to pay for the basic cost of approving and monitoring each institution. The second solution is an increase on a currently existing revenue-based fee from 0.55% to 0.775% of the revenue from the prior year and some adjustment of the minimum and maximum fee notwithstanding that percentage total. The minimum fee would be reduced from the current $2,500 to $1,000, while the maximum fee (for those with substantial income) would increase from $60,000 to $80,000.

The new fee plan seeks to increase the Bureau’s revenue to $20,800,000, which would allow it to stay solvent. However, note that this fee change will only increase as projected if the schools are able to stay profitable and produce some increased revenue. These two major changes, along with additional other fees, such as accreditation fees, several application change fees, and fees for non-accredited institution operation may allow the agency to become and remain solvent for the upcoming fiscal year.