<p>Hmm. If they are still raising salaries and the endowment is down 25%, I suppose this means tuition is going up again. Lovely.</p>
<p>As</a> peer institutions freeze pay, U of Cresists - The Chicago Maroon</p>
<p>UofC, for good or bad, does not get as much of its budget from its endowment, so perversely, the impact of the decline is less. Have a fried at Case, same thing, no big change.</p>
<p>Tuition increase? Maybe, maybe not. The U is in a tough spot with the rest of us - too big an increase and they start losing students, which is even worse. I'm sure they're modeling scenarios right now...</p>
<p>All in all, about 13% of the University's income is from the endowment, so the endowment decline won't impact University revenue.</p>
<p>What is generally misunderstood is how the University spends money on projects. For example, the University has come under fire recently for wanting to spend money on building projects while still cutting budgets and whatnot. The reason they do this is because building projects are paid for by issuing debt (selling bonds) versus things like financial aid and paying salaries which are paid for with capital the University is holding. Constructing buildings, since they are paid for by issuing debt, is an INCREDIBLY smart thing to do in this economy, as the costs of construction are down and the University won't have to pay for it for a few years, and even then the expenses are spread out over 10-30 years. Therefore, construction is a lot cheaper now than it would be later.</p>
<p>Lastly, tuition, and many other fees that students pay, is indexed to rise with the rate of inflation (roughly 5% per year), so it's very unlikely that we'll see a "real" tuition increase- that is, one that's higher than normal.</p>
<p>Borrowing for construction is widely done - even Harvard has most of its medical mortgaged, even the buildings constructed 100 years ago - but is a complex issue. </p>
<p>IF I recall correctly, debt is mostly used for science buildings because the cost of that debt is recoverable as an overhead expense through indirect costs (but I could be wrong - any grants folks reading?) but beyond that, it gets controversial in today's economic environment</p>
<p>And don't think they are not making budget cuts. Ran into some former colleagues a few weeks ago at a professional meeting. For the first time in their memory, budgets are frozen or reduced. And they are a revenue source.</p>
<p>Please also note the choice of words in the quotes in the article. NO across the board cuts or freezes does not mean none of either. It does not even mean no one will be spared cuts.</p>
<p>"Lastly, tuition, and many other fees that students pay, is indexed to rise with the rate of inflation (roughly 5% per year), so it's very unlikely that we'll see a "real" tuition increase- that is, one that's higher than normal. "</p>
<p>The rate of inflation isn't anywhere near 5% per year. Over the last 5 years, inflation has averaged about 3.18% per year, but UChicago has increased costs 5.1% per year. That is a substantial difference, especially year over year. U of C isn't alone in this regard. FinAid</a> | Saving for College | Tuition Inflation</p>
<p>The idea that the increase in college costs is inflation driven, although prevalent, is a total fallacy.</p>
<p>Around noon today, on NPR, there was a guy from MIT talking about these things. Could only listen for a couple of minutes, but it was quite interesting. I'll try to see if it is online.</p>
<p>The guy was Simon Johnson, a professor at MIT's Sloan School of Management and he was on NPR's Fresh Air on 3/3 talking, among other things, about universities and their endowment, Harvard in particular (minute 27 more or less). </p>
<p>Let's see, according to an inflation calculator I found, my U of C tuition of $4700 would cost $13,260 in 2007 dollars. Since tuition in 2007 was about $37,000, it seems the tuition increases were a little more than the inflation rate. :)</p>