REPORT OF STUDENT GOVERNMENT ON TUITION FEE

REPORT OF STUDENT GOVERNMENT ON TUITION FEE AY 2007-2008

By this letter Student Government of Kazakhstan Institute of Management, Economics and Strategic Research would like to express strong disagreement of ALL the students about tuition increase of 20% for academic year of 2007-2008 and summarize main arguments in support of this issue.

First of all we would like to express our appreciation personally to Dr. Bang for his enormous contribution in the development of educational sytem in the Republic of Kazakhstan and for educating highly qualified professionals of new generation. It is well-known fact that Dr. Chan Young Bang is the founder of most prestigious university not only in the Kazakhstan but also in CIS. Nowadays, many universities find KIMEP as the model of educational institute where quality is highly valued and students are put in first place. Thanks to Dr. Bang’s generous donation to our people all these could take place.

However, students who are the only clients of the service rendered in KIMEP, would like you to pay attention to the following statements:

1. Survey conducted among students of KIMEP revealed that current budget is prepared without any consultation with students, who ought to have some degree of impact on decion making processes. (please find detailed information about the survey in the attachment)

2. Students petition (more than 2000 signatures) is the supreme document to justify students strong disagreement about tuition fee increase of 20%, which they find unjustified.

3. KIMEP is a Kazakhstani university that should follow major policies in higher education practised by Kazakh universities. This basically means that kazakhstani students budget their university tuition fees for 4 years assuming that the entry-year fee will not be raised unless extraordinary events take place. Any university, be it private or public (state), has this policy. Examples could be KBTU and KazGu which are the leading universities in Technical and Social Sciences respectively. We insist that
KIMEP should stop increasing tuition fee for current year students which is the way universities do in Kazakhstan. Any student paying for courses 48000 tenges per course should do so throughout the 4 years of studies. This is a vitally important issue for KIMEP Students. Current Tuition Policy at KIMEP does not fit into the Kazakhstani Higher Educational System of which KIMEP is an integral and crucial part.

4. Capital Expenditure: New building, worth of 4.3 mln (almost 30% of tuition). During our study, it was revealed that the cost per sq. m. of major capital expenditures at KIMEP campus is budgeted at around $1000 (considering that KIMEP already has infrustructure and land), which is at least twice higher than the average cost of construction in Almaty, which per our observation varies between $350-500 including infrustructure and land costs. Besides, we believe these major capital expenditure costs should not be allocated to 3 years, while their useful life should be at least 15 years. This means that if KIMEP gets loan for $4.3 mln at 14% for 20 years, annual loan repayment (annuity payment) should be around $450K, which is more fair cost allocation rather than having such cash outlays devided into 3 years. (please see details about possible loan in the attachments). Another question is what happens after 3 years? Will tuitions decrease since the nature of major capital expenditures is not repeating?

5. Medical Center amounts to $200K. Considering the fact that the majority of students are Almaty residents, which mostly have their local or even family doctors, we believe it is not fair to charge this cost to all students. Medical center should charge for their limited services to those students who visit it. It could make more sense if KIMEP outsources this service or charges additional medical insurance to non-residents so that costs are allocated in a more fair way. Moreover, there's a limited number of service, Medical Center only prescribes and forwards students to other clinics, and gives "spravka". Finally, we were not able to understand the nature of projected costs, and could not test the feasability of proposed investment amount.

6. Net Scholarship increse of $591,000 MUST NOT be financed by students. We belive that KIMEP should seek some external sources for these purposes.

7. Increase in salary: We do not consider flat raise at 15% reasonable, since pay raise should reflect and correlate with the performance of each individual instructor, which should be done through an effective performance evaluation surveys. We do not want to make it flat 15% increase to all KIMEP employees, including administrative staff.

8. Non-academic revenue: we noticed in the budgets that there's no change in non-academic revenues, though they should also be increasing due to additional new charges each year for various services KIMEP provides. Assuming growth in number of students, it makes sense to expect growth in non-academic revenue.

9. Net Gain in PhD. Last year it was promised to hire 25 professors, and budgets were made accordingly resulting in tuition raise, however, only 15 professors were hired. Besides, per our discussion with Dana Stevens, we expect that the faculty turnover ratio was around 30-40% which we believe is abnormal, and this would make it harder to get net 20 professors next year.

10. What are approximate expenses per month, excluding education fees?
Minimal expenses for non-residents per month are the following (all figures are estimates and may actually be higher depending on the student's lifestyle and other factors):
Dormitory $ 50 - 90
Apartment From $ 120
Food $180
Books $10
Public Transport $10
Total Expenses $250-320

Apply this number for 2006 AY (9*300) we have $2700 and about $3000-$3300 for 2007!!!!

To sum up students require that administration of KIMEP stops increasing tuition fee and diversifies revenue sources and reduce their dependency on tuition fees to prevent a widening gap between rich and poor students.

Letter from SG on tuition increase

Dear Mr. Wood:

First of all, we would like to thank you for your support of our initiatives and for
understanding the importance of collaboration between students and the Administration
on issues vital to building the best future for KIMEP.

Being elected by the student body to represent their interests, we feel a deep
responsibility to the students who voted for us and the students opinions we
represent.

Per our latest discussion during KIMEP Council meeting, it was agreed that we take

additional time to analyse the Administration's decision to raise tuition fees. Thus,
we kindly request that you provide us with the additional detailed information
necessary to explain the justification for the proposed tuition fee increase.
Explicitly, we are inquire after the following:

CAPEX: Could you please provide us more details on capital expenditures.
The figures indicated in the presentation do not tell us precisely how these funds

would be used. We are interested to see a detailed budget for each
renovation/construction project, which as indicated in your presentation is around
$4.3 mln for the coming year. In order to justify these amounts of capital investment,
we need information on the construction/renovation cost per sq.m. for each project
unit. This will give us something to analyse and present to the students. The
projects in question are as follows: the New BCB building, the Medical Center,
Classrooms and Offices, the Dormitory-5th Floor, the Admissions and Financial Aid
Office, and the Language Center.

FINANCIAL STATEMENTS: Could you please provide us all past audited financial
statements. We would like to identify past trends and analyse KIMEP's historical

financial standing and cash flows.

REPORT ON EXTERNAL FUND RAISING: We would like to see what the Administration has been

doing to attract external funding for tuition directly as well as for capital
expenditures. We would like to see the past trends and future projections (i.e. what
has been done to attract funds in the past and what the plans are for the future).


Once our analyses is ready, we would like to make our findings publicly available to
the students. We would also like to gather more student input to inform any final
decisions. We strongly believe that the proposal for a tuition increase should be
widely circulated among the students as they will be the chief end-users of these
improvements.
It's critical to understand what the consumers feel are their priority needs in order
to provide a quality product or service.

Thanks for your time, and we hope for your kind support.

Regards,
Azamat, President of SG