UK budget: Sustained, historic investments in students increase access, affordability

LEXINGTON, Ky. (June 14, 2024) — The average debt of Kentucky students graduating from the University of Kentucky has decreased. And UK is marking the highest average of Kentucky students graduating from the university without debt in almost a decade. 

Among the highlights of a proposed $8.4 billion budget for UK in fiscal year (FY) 2024-25, UK President Eli Capilouto said what is most stirring to him is the institution’s progress in increasing access and affordability for more students from Kentucky.

Specifically, Capilouto told members of the Board of Trustees on Friday that among the Fall 2017 cohort of students who graduated, a little more than 50% did so without any debt. It is the highest percentage of students graduating without debt in at least nine years. In addition, the average debt amount decreased by a little more than 2% for that cohort of students — 2017 — compared to students in the 2016 cohort.

The average debt of those students was less than $36,000; the median debt was $27,000.

“Those are the results of a sustained strategy to grow investments and scholarships over the last decade at UK and to target that aid toward the students who need it most,” Capilouto said. “Many institutions drive student success by becoming smaller and more elite. We’ve taken a different path — a Kentucky path. We’ve grown enrollment, constrained tuition increases and invested heavily in the success of our students to lower debt and increase their opportunities to graduate on time. This formula is working for UK. More importantly, it is working for Kentucky. We plan to invest even more in it.”

In fact, in a separate study of student debt, the Kentucky Council of Postsecondary Education — the state’s higher education coordinating body — reported that the average debt of in-state graduates (who had debt) from public universities declined by 5.8% between 2020-21 and 2022-23. At UK, the average debt for its in-state graduates (who had debt) declined by 8.5% for the same period. 

Highlights of UK’s student success strategies as reflected in the FY 2024-25 proposed budget include: 

• The University of Kentucky will invest a record $175 million of undesignated General Funds in scholarships and financial aid. 
• That figure represents about a 6% — or $10 million — increase in student financial aid. That investment in students has increased by more than $70 million in the last decade.
• UK is proposing a 2.2% increase in tuition for the 2024-25 academic year. Undergraduate resident students will pay $6,751 in tuition and mandatory fees in Fall 2024, up from $6,606 in Fall 2023.
• The four-year rolling average annual tuition increase is now 2%, down from more than 4% a decade ago.

The combination of increased student aid, constraining increases in tuition and targeting that assistance to the students who need it the most has allowed UK to better serve Kentucky, Capilouto said. 

“Kentucky is asking us to enroll, graduate and prepare more students for success in their careers and for lives of meaning and purpose,” said Capilouto. “That means constraining cost, investing more in students and lowering debt, which is the chief barrier for many students to staying in college. The work here continues, but our efforts to advance Kentucky by advancing the success of our students is paying off.”

• For Fall 2023, a quarter of undergraduate full-time students from Kentucky came from families where the median family income was a little more than $27,000 annually. 
• For those students at UK, grants and scholarships on average covered 100% of tuition and mandatory fees and provided an additional $3,315 that they could use for other costs associated with college.
• In fact, that cohort of students is receiving increasingly more money to put toward their education. These Kentucky students received $195 more than the average cost of tuition and fees in fall 2019 and that has grown to $3,315 more than the cost of tuition and fees in Fall 2023.
• More than 90% of UK in-state undergraduates received grants or scholarships, which did not have to be repaid, in Fall 2023.
• Those students paid, on average, a little more than $400 out-of-pocket for tuition and fees in Fall 2023. Kentucky students receiving aid in Fall 2018, by comparison, paid about $1,200 on average in tuition and mandatory fees.

Capilouto said those numbers are particularly noteworthy considering the other student imperative that UK has focused on over the last decade — to steadily grow enrollment as well as retention and graduation rates.

• UK’s enrollment has grown in the last decade from about 30,000 students to a projected nearly 35,000 students this fall. UK projects a first-year class in August of about 6,500 students. First-year classes in the last decade have increased from about 5,000 to about 6,500.
• Even with the growth in enrollment, UK has experienced a historic growth in retention and graduation rates over the last decade. Retention has increased more than 4 percentage points, to nearly 87% for the 2022 cohort of students. 
• Over the last eight years, UK’s six-year graduation rate has increased more than 9 percentage points to 70% — among the top institutions in the country. And UK’s four-year graduation rate has increased more than 22 percentage points over the last decade to 58%.