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Administrators defend tuition hike policies

Eileen Duffy | Friday, February 18, 2005

As the University peels off the old $37,100 tuition sticker price and slaps on one for $39,552, those who will dole out the money are feeling the sting.

Director of Student Financial Services Joseph Russo said there have been few negative reactions in the Financial Aid Office thus far, but he anticipates some in the future.

“My guess is that there surely will be [phone calls], not just from parents but from students and alumni who might ask why our costs are going up higher than the rate of inflation,” Russo said.

Director of University Budgeting Linda Kroll said the decision to raise tuition has been long in the making.

“The planning for the budget for fiscal 2005-2006 begins in the spring of 2004,” she said. “It is a very thorough process that involves detailed analysis of all of the major factors that affect the University financially.”

These factors include “tuition, room and board levels, employee benefit costs [and] utility and insurance costs,” Kroll said.

Russo also defended the decision to raise tuition. He said the University is a “labor-intensive operation,” costing nearly $2 million a day to keep things running smoothly on campus.

Like Kroll, Russo offered financial factors the University considers, such as up-to-date technology, new books, maintaining the power plant and retaining and recruiting top-flight professors. Russo also stressed another cost – employee benefits. The cost of health care for Notre Dame rose 13 percent in the calendar year 2005, and the University’s finances need tuition to be able to cover these allowances, he said

“Those benefits have to be met,” Russo said.

Although Notre Dame is flooded with outside financial support, Kroll said much of that money serves a different purpose than tuition. She also said only 9 percent of the earnings on the University’s $3 billion dollar endowment can be used to support general University operations.

“Large gifts like Mr. Jordan’s generous $40 million dollar [gift] get much attention in the press,” Kroll said, “but often do little to fund daily operations.”

Kroll said Notre Dame is ultimately trying to “move our charge more in line with the rates charged by peer schools.” Indeed, other major universities are not cheap. In the 2004-2005 school year, Harvard had a $39,880 tuition, room and board price tag; Princeton’s was $38,297. Georgetown, often compared to Notre Dame due to its Catholic mission, charged its students $40,492; Northwestern, another midwestern private school, asked for $40,686.

Financial Aid

The question remains – who or what will the tuition hike benefit?

“Student tuition and fee income provides nearly 60 percent of the total operating revenue for the University, so all costs of running Notre Dame are supported by tuition in some amount,” Kroll said. “[We] don’t earmark a specific revenue to a specific expense.”

However, the University designated financial aid as the primary beneficiary of the tuition hike. Since 1999, there has been a 39 percent increase in tuition – but the University has increased its investment in financial aid by 151 percent in that same time period, Russo said.

In its admissions process, the University operates on a “need-blind” basis; that is, the University does not base its decision on a student’s ability to pay, Russo said. He added that Notre Dame has committed to another major policy – meeting the full need of every admitted student.

“That’s not to say that how we measure need is a perfect science or that the families won’t have to sacrifice or students won’t have to work and borrow money,” Russo said. “But we are committed to looking every student in the eye and saying, ‘Yes, we will meet your needs.'”

This policy wasn’t always the case, Russo said. In 1990 – when the need-blind policy was not in effect – the trustees asked how families were coping and what could be improved, he said. Results were clear – “it didn’t take a lot of research to see that we had to step up financial aid,” Russo said. They did so with the help of generous benefactors, financial campaigns, a robust economy and even the NBC television contract, said Russo, and finally achieved a need-blind status in 1999.

Russo said the need-blind policy has had a snowball effect.

Secondary school students become interested in Notre Dame and now hear that Notre Dame will meet their needs – so they want to apply, he said, noting application numbers have been higher in the last three years than they have ever been in history.

“That policy clearly has had an impact on improving the quality and diversity of the student body and the reputation of the University,” he said.

The value of a Notre Dame education

Russo emphasized the high value of a Notre Dame education. He pointed out that Notre Dame graduates 95 percent of its freshmen in four years, a rate which ranks fourth nationally; for the average college student, the chances of finishing on time are just one in three.

“You don’t need more semesters in college – each would cost more money – and additional time spent would be lost opportunity money, as they say in economics,” he said. “Not only are you not working, but you’re still there [paying for the cost of college].”

According to Russo, Notre Dame also has one of the lowest default rates on student loans, at just two-tenths of a percent. He called the low rates another indicator of success – not only do students graduate on time and become successful, but they have a sense of obligation to their alma mater.

Ultimately, Russo said, there is a difference between the rate of inflation and the rate at which tuition is rising, because there is a difference between an average market good and a four-year educational experience.

“Students aren’t purchasing a consumer item; they’re making an investment for which there’s going to be a return,” he said. “For most students, it’s going to be positive, especially for Notre Dame students.”

Students and parents respond

Sam Glass, a sophomore from Lyons in the work-study program at Notre Dame, said she feels there should be other fundraising techniques to cover financial needs.

“I understand the University has to keep up with the rising costs of living, but considering the cuts being made by the government to assist college students, it seems there are better ways to fund education than to continually increase tuition,” Glass said. “However, college is so expensive that it barely makes a difference – I’m already in debt forever as it is.”

Evan Henley, a Zahm Hall sophomore financing part of his own education, said he feels the University’s decision displayed a lack of awareness.

“I don’t think the University realizes that not everyone here has an extra $2,500 lying around,” he said. “This tuition increase puts a strain on all of us, and it’s hard to justify paying it when there are no noticeable changes.”

Steve Rowley, father of freshman Elisabeth Rowley, admitted the tuition hike was going to be tough.

Like Glass, he suggested another source of financial support for the University.

“For us, we’re not very wealthy, so it’s a struggle,” Rowley said. ” … I’m wondering if, maybe, they shouldn’t use [the Notre Dame] endowment to hold [the cost of tuition] down? I know they have a huge one.”

Like many parents, though, Rowley said they “love the school” and no matter the cost of tuition, Notre Dame is worth it. Mary Ryan, mother of freshman twins Brendan and Brogan Ryan – the third and fourth Ryan children to attend the University, of the Ryan’s 11 children – said the value of the religious education here is irresistible.

“Of course we have a problem [with the hike],” she said. “But we are firm believers in Catholic education; all of our children are in Catholic schools …We’re confident the University will meet our needs and help us out.”