Procedures for Service-Based Pricing Program Proposals

This KnowledgeBase page provides information regarding the creation, implementation, and review of service-based pricing programs. The Policy for Service-Based Pricing Programs can be found in the UW-Madison Policy Library.

Background

The University of Wisconsin System policy grants campuses the authority to offer academic programs for nontraditional students that can respond to market demands while including additional instructional and student support services dedicated to the success of these students. The different fiscal model means these programs have requirements in addition to requirements for regular academic program approvals. For programs that meet the criteria and are willing to operate under the associated rules (refer to the Tuition/Service-Based Pricing Programs policy for details), paid tuition for the program will be posted directly to the program through a Fund 131 account to cover expenses and allow for program reinvestment. The rules associated with service-based programs are designed to protect the tuition pool and support program success.

These procedures and guidelines apply to all programs that are offered using a service-based pricing tuition structure. In other contexts, such programs have been referred to as 131, Non-Pooled, Revenue, or Professional Degree and Certificate (PDC) programs.

Proposal Creation and Approval Process Steps

Programs seeking to utilize one of the service-based pricing tuition tiers must show the proposed tuition is appropriate based on the market and show how the proposed tuition is competitive with peer or competitor programs. The process outlined for proposing a service-based pricing program is in addition to the standard process for proposing any for-credit academic program:

1. Program faculty meet with the appropriate school/college associate deans to discuss the feasibility of creating a new academic program. This discussion should include an honest review of how the program would fit the strategic goals of the department and the service-based pricing policy.
2. Contact the Division of Continuing Studies and the Graduate School¹, per the contacts below. These units/individuals will provide information about the initial steps for proposing a new service-based pricing program.
3. Initiate a Lumen Program Proposal. The proposal will not be submitted to workflow in Lumen until it is ready to go through governance, meaning both the aspects of the proposal related to the service-based pricing model and the general new academic program proposal components (e.g., the curriculum, the admission process, etc.). It is not necessary or expected that all programmatic or curricular details will be known at this point, but ultimately the full Lumen Program proposal will need to be completed. Throughout the process, it will be important to keep in mind:
   1. School/college budget officers must be involved in planning and must approve plans and budgets for these programs before the program proposal is submitted to the school/college Academic Planning Council (APC) for academic approval. School/college approval signals approval of all aspects of the proposal, including the budget and the financial obligations of the school/college.
   2. If courses from outside the program’s school/college are used in the curriculum a copy of the Memorandum of Agreement (MOA) must be uploaded to the Lumen Program proposal.
4. Complete the Service-Based Pricing Budget Template
5. Notify the Division of Continuing Studies and the Graduate School¹ (contacts below) when these steps have been completed in Lumen Programs. The Service-Based Pricing Program Committee (see committee details below) will then review the budget spreadsheet and Lumen Programs information. The committee may request additional information or changes prior to the budget review meeting.  
6. The budget review meeting is held with the Service-Based Pricing Program Committee and those from the school/college involved with planning the new program. This group must include: a) the school/college budget officer, b) the appropriate associate dean for academic affairs, and c) the lead program faculty member. The group will assess whether the proposed program is appropriate for a service-based pricing tuition structure and will meet the requirements of the service-based pricing policy.
7. The program planning team will get feedback at the meeting as to whether the program meets the criteria and can proceed with planning as a service-based pricing program. Committee members representing the Vice Chancellor for Finance and Administration (VCFA), Data, Academic Planning & Institutional Research (DAPIR), the Graduate School¹,and the Division of Continuing Studies (DCS) must unanimously recommend the proposal moving forward. DAPIR will document the meeting decision and feedback in the Lumen Program proposal.
8. Once the budget is approved, the program will upload the approved Service-Based Pricing Budget Spreadsheet and the Service-Based Pricing Tuition Request Form to the appropriate fields in the Resources, Budget, and Finance section of the Lumen Programs proposal form.
9. With approval on the service-based pricing component of the new academic program, the department and school/college will then follow the standard process for proposing a new program and approving it through governance. Please note: 
   1. Curricular requirements for the program must follow a prescribed series of courses specified by subject and catalog number that are logically connected to the program learning outcomes. Elective options must also be defined by subject and catalog number.
   2. If the program requires a course that is outside of the school/college offering the program, a Memorandum of Agreement (MOA) is required between the school/college offering the program and the school/college offering the course. The MOA needs to include agreements on cost, capacity, and other operational needs. If both parties agree, the UW-Madison Campus Standard Memorandum of Agreement may be used. If no MOA exists and a student takes a course in that school/college, the Standard Memorandum of Agreement will be applied.
10. DAPIR will coordinate approval by the UW System President (for market-based tuition) or UW-Madison Associate Vice Chancellor for Finance and Administration (for online/distance tuition).
11. Notification of final approval of the tuition will include program representatives, the school/college dean's office, the Graduate School (if applicable), the Registrar’s Office, the Bursar’s Office, the Madison Budget Office, DAPIR, DCS, the VCFA, and the Provost.

Timeline

Proposals for service-based pricing programs follow the same governance approval process as all academic programs with an additional step for the approval of the tuition structure (market-based or online/distance) and tier. Tuition proposals are reviewed once the program has been approved by the UAPC. Proposals for online/distance tuition are reviewed by the Associate Vice Chancellor for Finance and Administration while market-based programs are sent to the chancellor and then to the UW System president. This process has been taking several months recently.

Approved Tuition Tiers

Programs must use an established tuition tier or propose the addition of a new tier. Existing tiers range from $800 to $2,700 in $100 increments.  Proposals for new tiers can be to the Service-Based Pricing Program Committee by contacting the DAPIR member of the committee.

Market Research

Market research is to be updated and reviewed regularly, at a minimum for the 3 year check-in and 5 year review. Market research for new program planning and continued ongoing program review can come from a variety of sources. Accepted sources of research include:

• Data collected through student/alumni/employer/industry partner focus groups or surveys
• Reports generated through market research tools or services within your school or college
• Reports generated by the Professional Degrees and Certificates team in the Division of Continuing Studies.  To request a report, contact the Assistant Dean for Professional Degrees & Certificates. Reports typically are generated within 4 weeks but can take up to 6 weeks to prepare.

Changing the Tuition Tier for an Approved Service-Based Pricing Program

An academic program's tuition tier is based on market and competitive pricing research. The program is priced to take into account fixed and variable costs, future enrollments, and frequency of offerings, recognizing new and additional program cost implications. Market research will be updated and reviewed regularly.

If an existing program that has been approved for service-based pricing determines that the tier currently used is not appropriate, a request may be made to change the tier. This is done by completing the Service-Based Pricing Tuition Request Form and an updated Service-Based Pricing Budget Spreadsheet.The change proposal must be approved by the Associate Vice Chancellor for Finance and Administration (online/distance tuition) or by the UW System President (market-based tuition) by February for a fall term program start or by November for a summer term program start.

If the change is approved it will apply to all students in the program, cohort tuition is not allowed.

Changing from a Pooled/101 Program into a Service-Based Pricing Program and Vice-Versa

It is not possible to convert an existing pooled/101 program into a service-based pricing program. If an existing pooled/101 program desires to run with the service-based pricing model, the existing program must be suspended/discontinued and a new program with the service-based pricing model must be proposed in its place, following the process detailed on this page.

Currently there is no process to change a service-based pricing program to a pooled/101 program, any requests to do so will be handled on a case-by-case basis.

Audit/Review Process

All service-based pricing programs will undergo financial and operational reviews as part of the academic program review process (i.e., the Graduate School's Three-Year Check-in, the five-year program review for new programs, and the ten-year program review for continuing programs). In addition, reviews may be triggered by low enrollment, other operational or fiscal challenges, or at the request of the school/college dean’s office or the Service-Based Pricing Programs Committee.

For the scheduled academic program review, the program will prepare an updated Service-Based Pricing Budget Spreadsheet using data from the previous and current year, as well as projections for the next 3-5 years. In addition to the standard program review process for the academic program, the Service-Based Pricing Program Committee will evaluate the program review documents, particularly the updated budget spreadsheet. If the program is deemed not to be meeting the service-based pricing guidelines and expectations, the committee may provide feedback to the school/college dean with recommendations.

Service-Based Pricing Program Committee Voting Members

The following roles/individuals have been designated by UW-Madison to consult with programs seeking to operate an academic program featuring the service-based pricing model. In addition to consulting on eligibility and program development, this committee also reviews and ultimately approves/denies proposals to utilize the service-based pricing model. 

1. UW-Madison Budget Director, or designee,
2. Vice Provost for Data, Academic Planning & Institutional Research, or designee,
3. Associate Dean of Continuing Studies, or designee,
4. Associate Dean of Graduate School, or designee, and
5. Vice Chancellor for Finance and Administration, or designee

¹ For programs in the Graduate School.  If the program is not part of the Graduate School, please include DAPIR as a contact.

Current Service-Based Pricing Contacts

Please direct questions regarding the service-based pricing policy, procedures, and/or proposals to the following:

Resources

List of Service-Based Pricing Programs 

Course Enrollments for Students in Service-Based Pricing Programs