6% Increase

Parents Forum
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<p>At dinner last night my son, diverting attention from potential discussion of a haircut, told us that his college, Grinnell, is anticipating a 6% increase in tuition. This school, a perennial "best buy", has substantially lower costs than a comparable school in the northeast, gives tremendous merit aid and is in the middle of a big building boom. It also has an enormous endowment for a school its size. I wonder what costs 6% more than last year- this is not just inflation. </p>

<p>How does 6% increase compare with what your children are telling you?</p>

2

<p>We have not heard what, if any, increase Tulane will have next year. But, I have noticed that this year the Distinguished Scholar Award is $22,000. Last year it was $18,000. Not sure if any, or all, of the difference will be a tuition increase.</p>

3

<p>The markets are still not particularly strong and endowments are not in many cases making the money they can when the economy is stronger.</p>

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<p>I've given up on the haircut...he looks like a white version of Ben Wallace of the Pistons.</p>

5

<p>Here's a link about the 6.5% increase.</p>

<p><a href="http://web.grinnell.edu/sandb/archives/volume121/11/news/article04.html%5B/url%5D"&gt;http://web.grinnell.edu/sandb/archives/volume121/11/news/article04.html&lt;/a&gt;&lt;/p>

6

<p>I have heard of this 6% figure, not just for Grinnell but "in the air" for the upcoming tuition increases.</p>

7

<p>thanks, guitar, for some reason the link doesn't link...</p>

8

<p>6% ain't nothing! Most publics in Ohio raise at least 10% a year sometimes up to 21%! Some school have even started raising midyear during the xmas break.</p>

9

<p>College tuition is not based on cost but rather on what the market will bear. No college or university can in economic terms isolate the "cost" of educating a student anymore than Oscar Meyer can tell you what it :costs" to produce a pound of bologna. The reason why is because you cannot produce a pound of bolgna without also producing bacon, ham, pork chops, lard etc. When a pig takes that last long walk across the bridge of sighs everything but the oink is going into different products that will retail at whatever price the market will bear. In the USA we put a premium on white meat when it comes to chicken. In China it is the opposite. Hear you will pay extra for the breast at Col. Saunders there you will pay extra for the legs but nobody can tell you what it cost to produce one chicken leg. So it is with a university that "produces" many things besides undergraduate degrees. The same library that supports the undergraduate also supports the professor doing research under an NIH grant. The situation is especially complex at large public or private research universities that produce everything from undergraduates to sports entertainment to medical services to patents and may in the process also provide a local newspaper and policing to the local community. The economic impact and sources of revenue are so inter-related that nobody can tell you what any part of the whole costs in isolation from the entire enterprise.</p>

<p>So the bottom line is tuition goes up 6% because people are willing to pay the additional 6% not because the cost of educating a single child went up by 6%.</p>

<p>BTW the more direct student financial aid the state and federal government give the faster the price will increase. College will simply absorb the money because they can just as Oscar Meyer would raise the price of bologna if the government gave every consumer a $! coupon for every pound of bologna they bought. The long term effects of these well intentioned programs have probably been to make college less affordable not more affordable.</p>

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<p>I don't remmeber what my tuition was during my freshman year.. I want to say that it was something like 6,800.00 for a full year (3400/semester), and now it's like 8600 per year, so it has gone up 2,000 dollars total over the past 4 years. which still is a great price for a private lac in the northeast.</p>

11

<p>I'll post it.</p>

<p>Volume 119, Number 11 | Dec 3, 2004 </p>

<p>College plans another fee increase </p>

<p>Brand, Crady discuss rationale for increase at open forum; about 30 students attend
by Amanda Bayliss </p>

<p>The college administration has announced that it plans to increase next year’s comprehensive fee by 6.5 percent, raising it for the sixth year in a row. </p>

<p>On Monday, Nov. 22, Jonathan Brand, vice president of institutional and budget planning and Tom Crady, vice president for student services, held an open forum regarding a proposed 6.5 percent fee increase for the 2005-2006 school year. Around 30 students attended the forum, during which Brand and Crady discussed the college’s operating budget and explained the rationale for the proposed increase. </p>

<p>Many students in attendance seemed skeptical of the proposed increase, and the general mood at the forum was against an increase. </p>

<p>Vashti Davis ‘06, said she felt “slightly betrayed by the increase” although she “understood the thoughts of the administration on raising tuition.” Most students were favorable towards Brand and Crady’s efforts to present the proposed budget at the forum, although Davis expressed disappointment at the student turnout considering the amount of complaints across campus prior to the forum. </p>

<p>Yanika Schneider ‘06 expressed disappointment with the forum later to the S&B. “When you choose to attend a school, you don’t anticipate that it is going to be increasing so drastically every year,” said Schneider. </p>

<p>During the forum, Brand emphasized that the operating budget for the next fiscal year, which includes the tuition increase, still needed to be approved by the board of trustees, who will meet in February. The proposed budget given to the trustees is formed by the Budget Steering Committee, which includes Brand; Crady; 13 faculty and administrators; President Russell Osgood; and SGA treasurer Doja Khandkar ‘05. </p>

<p>The trustees have approved all recent proposed tuition increases. If approved, the budget will mark the sixth increase in six years—each more than double the rate of inflation. Last year tuition increased by 5.25 percent, and preceding increases were 5, 7.5, 5.5, and 4 percent. </p>

<p>What is “really important to get out to the students is that tuition is probably going to increase and students need to start talking about this,” said Khandkar. </p>

<p>In his explanation for increasing tuition, Brand cited assorted factors, including the size of the financial aid pool, the achievement of a balanced budget, the size of the student body and the comprehensive fees of peer institutions. </p>

<p>In particular, Brand feels that “reliance on the endowment is too large.”Thus, Brand views the tuition raise as a method of achieving a balanced budget without endangering the endowment. The endowment makes up 47 percent of the 2004-2005 operating budget, $31.1 million. </p>

<p>Schneider spoke with Brand after the forum, but said she still felt confused as to why more of the endowment could not be allocated to the budget. </p>

<p>Crady and Brand also focused upon Grinnell’s comprehensive fee in comparison to its peer institutions. This fiscal year Grinnell’s comprehensive fee is at 88 percent of its peer institutions, a relationship it has maintained for the past few years. </p>

<p>Another important point stressed by Crady is the college’s commitment to keep its admission need-blind and to meet 100 percent of a students’ demonstrated need. Next year’s budget also includes a $3.1 million dollar increase in financial aid. Starting with the incoming class of ‘09, the college plans to use the federal methodology system to determine students’ financial need rather than the institutional one it used in the past. Brand and Crady said they consider federal methodology to be more generous to students because it reduces the amount it expects the family to pay. </p>

<p>But not all students felt more at ease with the proposed fee changes after the forum. “A lot of students are on their own,” said Schneider. “You’re basically telling a bunch of twenty-year-olds to pull $2,000 more dollars out of their asses.”</p>

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<p>Thanks, Guitar...appreciate this...</p>

13

<p>6% is easy...U of Richmond is raising their tuition over 25% to be "more competitive" with other peer institutions like Wake Forest. Yeah right...</p>

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<p>Patuxent, you're sort of right, but sort of not. I don't know how one measures "the cost of educating a single student" but overall, the cost of running a college is going up at a good clip. Colleges are facing some pretty substantial expenditure challenges. </p>

<p>Now, it's probably true that they could do more to cut costs, and that the fact that, as you say, "the "market will bear" tuition increases means that they have a disincintive to cut costs as ruthlessly as they might otherwise. But it's not simply an arbitrary tuition hike with administrators laughing all the way to the bank. And the fact is, some colleges are pricing families out of their applicant pool, and they know it and don't like it.</p>

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<p>Just a note that the college expense calculators posted on various websites such as PR include a built-in assumption or recommendation that college cost will increase overall by roughly 7% annually. If the tuition isn't increased in a given year, then something else will be.</p>

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<p>Actually a math major once explained to me that marginal costs = average costs, over time. So the cost of one student = annual budget, divided by the # of students.</p>

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<p>Well SBmom how does that $100 million per annum of NIH research contracts factor into the universities costs of educating on history major? How does the funding of the atheletic department figure? Are you going to tell me that it costs more to educate on biology graduate at USC any year they don't get a BCS payout for making a major bowl or the NCAA tournament? Why does one school need a thousand acres of real estate to educate 4000 undergraduates but another needs 50? Why is the tuition at a small liberal arts school in the middle of nowhere (Grinnell is as middle of nowhere as it is possible to get) virtually the same as a small liberal arts school in the middle of a major city (Macalester) or a major research university with billions in endowment (Harvard)? It is not because their cost structures are the same but rather because the market will pay.</p>

<p>tuition + Room&board</p>

<p>Grinnell = 35,408
Macalester = 33,988
Harvard = 34,934</p>

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<p>Supply and Demand... supply and demand.... </p>

<p>tuition+room&board at my school = 14,000ish</p>

<p>that is less than penn state university park. does that mean i'm getting a worse education? i don't think so. their classes have hundreds of people in them, they get assigned homework which makes up a ton of their grade and is graded on accuracy (sounds like highschool to me), and many classes are strictly lecture-based. most of my classes have about 15 people in them, there is obviously some lecturing, but most of this is open for all to discuss. we have some homework, which is normally graded for completion not accuracy. i'd say i'm getting a much more "hands on" education at my school than i would at such a large school such as penn state - as i learn by doing. for me, this type of education is better, and i am paying less while getting it. Could i of gone to a school where the tuition was 30,000 a year? Sure I could.. (if i wanted to be in debt forever), but i don't feel i would of gotten a better education there.</p>

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<p>BTW the Ivy's got nailed for price fixing a couple of years back. They quite literally were getting together and deciding how much aid they would give to individual applicants i.e. you would get the same bottom line offer from all eight of them if you were accepted by all eight and let me tell you Brown hasn't got the same emdowment or financial resources that HP&Y have. If Harvard decided to open its doors for free to accepted undergradutes the missed tuition money wouldn't be noticed in their over all budget.</p>

<p>Higher education operates as a classic cartel right down to a common methodology for determining financial aid - which by the way is an interesting term for what in economic terms and in any other industry would be referred to as secondary price discrimination.</p>

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<p>patuxent--</p>

<p>I agree that there is a market rate that people will pay, and I am not saying that the tuition is always equal to the cost per student. I am saying that when the university spends more $ (whether on renovation, equipment, scholarships, or whatever) then their costs rise-- and thus rise also on a per-student basis.</p>

<p>Not every student avails himself of every facility or academic program. But is all a part of the total package of the university: diversity of student body, rich & varied academic program, stature & prestige... Basically it costs a lot to throw an Ivy League party. If you want a place where the "total package" costs a lot less, there are many good places out there, as fendergirl points out. One can get a great education without some of these high end trappings. Some people, though, would like their school to have a nuclear accelerator-- whether or not they major in physics-- because it enriches the whole campus to have a state of the art physics program, teachers, and students. Some people like having a winning sports team, whether or not they are on it. Some people want a state of the art theatre to attend; should the costs of that theatre be attributed only to the theatre arts majors when figuring costs of ecuating students?</p>

<p>This is why you can't break out the costs of educating one history major. The total program & the high caliber of the typical student is the big lure at a top 25 school, not just the offerings in one's individual department. </p>

<p>Also: though I see your point about collusion, I believe the reason the Ivys have a standard financial calculation is to make it a level playing field so schools don't unfairly woo "prefered" kids with bigger financial aid packages when the packages are not really driven by the family's need.</p>