Tuition is "the price of or payment for instruction." It is payment for any contracted instructional service, from a weekly half hour of speech therapy to full-time enrollment. Tuition for school districts is governed by state law. In general, tuition must include the unusual costs of serving a student, exclude amounts not funded by tuition and property taxes, cover the actual period of service, and not impose a financial burden on the service provider (s. 121.75). Tuition charges must be based on a statutory formula or other methods approved by DPI (s. 121.76 (2) (a)).
Shared services and cooperative agreements are useful tools for districts to increase efficiency and realize cost savings. However, they are subject to legal requirements on how costs are shared. In addition to the law on tuition, the law on cooperative agreements specifies that when an agreement includes a plan for administering shared services, that plan is structured in terms of "proration of the expenses involved" (s. 66.0301 (3)). DPI interprets these laws to mean that a district may not sell instructional services to other districts for the purpose of generating revenue above and beyond its cost of providing those services.
Payments under the Open Enrollment program for students without disabilities are processed by DPI as aid adjustments, but are treated as tuition for accounting purposes. Students with disabilities in the program are funded by a direct tuition payment between the resident and non-resident district. The School Management Services team has more information on Open Enrollment.
Outside of the Open Enrollment program, there are three methods districts may use for determining tuition charges for a student or service:
- Standard (or Statutory) Tuition: A formula for calculating a daily tuition rate is specified in state law (s. 121.83). DPI form PI-1524, an Excel workbook, is used to compute that rate. An updated version that divides standard tuition into Fund 10 and Fund 27 components was posted in spring 2014 and is required for all districts using the standard tuition method in 2014-15 and onward.
- Open Enrollment Rate: The flat open enrollment transfer rate may be used to determine tuition outside of that program, and is charged to Fund 10. If this method is used for a student with a disability, only the actual, additional costs of special education specific to that student may be added to the flat rate, which are charged to Fund 27. Tuition for students with disabilities under this method must be agreed and billed with DPI form PI-9423.
- Actual Cost: Tuition may be set to reimburse a district for its actual costs of providing a service. The amount should include direct costs, such as salary and benefits or employee travel, and may also include administrative costs supported by appropriate documentation. The cost of a shared service or cooperative agreement may be split between participating districts, based on the services provided to each district or student, or allocated in another manner consistent with the general requirements for tuition. A flat daily or unit rate determined under this method should include a mechanism to resolve significant surpluses or deficits that may accumulate over the course of the year. For students with disabilities, tuition under this method must be divided into a Fund 27 portion that reflects the cost of special education and related services and (when applicable) a Fund 10 portion reflecting any non-special education instructional, overhead, or administrative costs.
When deciding upon a tuition method and rate, districts should consider the potential impacts of any variance between what is charged and the costs being offset. Tuition revenue is a deductible receipt in the calculation of shared cost for equalization aid. When received for special education instruction, tuition is subtracted from expenditures in all four IDEA Maintenance of Effort tests. It is in the interests of both the district providing a service and the district receiving it that tuition be determined as accurately as possible.
Please contact Daniel Bush at (608) 267-9212 or firstname.lastname@example.org with any questions about tuition.
Intergovernmental cooperation, Wis. Stats. ch. 66, subch. III. (2014).
Tuition. Webster's new collegiate dictionary (8th ed.). (1977). Springfield, Mass.: G.C. Merriam.
Tuition payments, Wis. Stats. ch. 121, subch. V. (2014).