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02/15/94

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Future method of charging graduate RA tuition is announced

STANFORD -- After two years of study, university officials have come up with a new method for charging the tuition of graduate student research assistants - replacing "tuition remission" - that will produce mostly favorable results for all parties involved, Charles Kruger, vice provost and dean of research and graduate policy, has announced.

Under the new method, which will start in September 1997, principal investigators outside the Medical School will charge 40 percent of full-time tuition for a half-time research assistant as a direct expense to a sponsoring agency. The Medical School will charge student tuition at 50 percent.

The student's remaining tuition benefit will be made up by the provost through university general funds or, in the case of the medical and business schools, a dean's subsidy.

Most graduate student research assistants work half time. They are paid a salary and receive as a staff benefit the right to register for up to nine units of graduate study.

As part of the 1993 revision to rules governing research overhead costs, the federal government told Stanford that in 1997 it must stop "tuition remission" - the practice of charging tuition as an indirect cost to the universitywide benefits pool.

Predictions surfaced when the government announced the change that the new regulation would cost Stanford $12 million and result in loss of financial support for one-quarter of graduate students.

Not so, according to Kruger.

"The effect on the number of graduate students will not be significant," he said of the new arrangement.

A positive side-effect of the new method, Kruger said, is a gain to non-medical sponsored projects of about $1.5 million because removing student assistants from the staff benefits pool will lower the university's benefit rate by nearly 3 points. That savings will help principal investigators who charge salaries of faculty and staff to come out ahead, Kruger said.

Directly charging tuition at 40 percent will result in a loss of $2.1 million annually in general funds - the difference between the new direct recovery and the current indirect recovery of student tuition through the benefits pool, Kruger said.

"The provost is willing to take a loss," Kruger said, "because graduate students are such an essential part of what we do at Stanford. The issue has been how to balance savings from lower benefits charges against the impact of the direct charges."

Kruger projected that the cost for a graduate research assistant would be $500 per quarter more under the new plan. He said there would be a "relatively few instances in which principal investigators" employing large numbers of students and few staff would see their costs increase, and that "investigators who do not pay regular indirect cost rates will be affected more."

However, reducing the direct charge for tuition to a lower number, he said, "would have resulted in disproportionally larger losses to general funds, and therefore to academic programs."

The direct-charge figures resulted from calculations done at Kruger's request by the Decision Support System team of the Stanford Data Center.

Staff members Paul Goldstein and Joy Mundy modeled various alternatives, using data about every contract and grant in a new relational data base to project the effect of different direct- charge percentages.

Their analysis led Kruger to conclude that 40 percent produced the best overall effect for the nonmedical side of the university and its principal investigators. At 45 percent, for instance, the university's net loss was projected at $1.8 million rather than $2.1 million, but the loss to principal investigators would have been much greater.

Kruger said that Goldstein and Mundy's work was "essential to developing a plan that makes the best overall decision for the university."

The new tuition-charging method is to be incorporated into proposals no later than March 15. Proportional figures will be used for quarter-time research assistants. The charges will apply to all sponsored projects, including nongovernment grants and contracts.

No indirect costs will be charged against the tuition, and Kruger said "it is our understanding that no staff benefits charge will be levied against the student salary."

He emphasized that the present tuition-remission system will remain in use until 1997.

Arrangements for teaching assistants will be made separately between the provost and school deans, Kruger said.

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