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       When President Todd speaks to prospective students and parents, he tells them
that one of the best things UK can do to keep costs down is go graduate students in four
years. To encourage this, UK offers such options as the winter term, which was very
successful in its first year, and the four-year-graduation contract. An increase of $600 in
tuition for one year pales in comparison to having the pay another $ 10,000 to keep the
student in school for an additional year.

       President Todd was pleased that UK received $ 100 million of authorization for
bonding for hospital plans plus permission to spend $100 million of UK's own funds, for
a total of $200 million. This will enable UK to begin the construction of its much needed
bed tower. The university also received $40 million of state bonding, meaning that the
state will pay $40 million over time to begin the first phase of the UK pharmacy-biology
complex, our top priority. Also received was $24 million of authority to bond a student
health center and $7 million of authority toward a basketball practice facility. The
university received operating money, project money, and a $.0 1-per-pack increase of the
tobacco tax for UK and U of L to share as research funding. Although some of this must
be matched, the funding gives us additional resources with which to attack cancer issues
in the state of Kentucky. In sum, the budget is very good this year, and we have tried to
reflect that by moving the tuition increase down from 16.5 percent to 12.5 percent while
making the key needs - of employees, students, scholarships, and benefits - the
destination of most of the funding.

       President Todd next asked Provost Nietzel to speak about the professional
programs detailed in FCR 1.

       Provost Nietzel concentrated on pages 3 and 4 of FCR 1, explaining the
percentages and rationale associated with the professional programs. He stressed that in
most of the professional programs, the board would see an introduction of a different
increase for continuing students versus for incoming students. The Pharm. D. program is
the exception. For Law, Medicine, and Dentistry, the recommended increase for
incoming students is 12.4 percent, the same percentage as for the undergraduate resident
tuition discussed earlier by the President. Upon recommendation of the deans of these
three areas, the increase in tuition for returning students is 9.4 percent. For the past two
years, there have been differential increases levied for these professional programs.
There is a feeling that such steep increases represent a very large burden for professional
students in these areas, and thus it would be wise to provide a bit of cushioning this year.
Similar changes were made to the other professional programs listed as masters programs
at the top of the third page - 12.4 percent increases.

       The Pharm. D. program changes were to increase returning-student tuition by 24.8
percent. The amount above 9.4 percent (i.e., 15.4 percent) will be returned to Pharmacy
for the college's use. The resulting $12,000 annual tuition for Pharmacy's Ph.D. program
will still be only slightly higher than tuition at their benchmarks for similar programs next
year, and UK's tuition will remain well below the median. For new Pharm. D. students,
there is an even greater tuition increase, 51 percent, the bulk of which will also be
returned to Pharmacy for the enrichment and expansion of their program. The new