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Tuition increase: some explanation required

| Tuesday, February 17, 2015

Subtle, wasn’t it? In what has become an annual tradition, our administration came forward wringing its hands last week and murmuring gentle phrases such as “gratitude and connection,” “passionate alumni network” and “significant sacrifice” to soften the blow of yet another tuition hike bringing next year’s total cost of attendance to $61,775.

After spending a few happy moments thinking of other ways one might spend $61,775 — CouchSurfing Scandinavia, for instance, or bicycling in the Himalayas — I wondered whether such unassuming yet persistent climbs in tuition costs really passed the smell test.

In 1991, the average U.S. worker earned $21,811 and spent just over $17,000 to send sons and daughters to Notre Dame. The year 2001 witnessed salaries and total costs rise to $33,000 and $29,100, respectively — a 5.2 percent tuition upswing that was heralded then (as this year’s is now) as “the lowest percent increase” in decades. As of 2013, the average salary was $45,000, yet the University’s price now far outstrips what an average American worker earns.

An increase is still an increase, and celebrating how low it remains fails to mask basic disparities. While household income grew by a factor of 6.5 over the past four decades, private university fees and expenses rose by a factor of 13. Soft explanations and the “value of a Notre Dame degree” also fail to account for how the University’s price could have doubled over the course of 13 years and grown at a rate well beyond annual inflation. As I continue to remark when passing the inexplicable dumpster-turned-modern art-piece entrenched in front of Riley, “Something is wrong with this picture.”

We continue to accept the yoke of annual tuition spikes but never stop to question the logic behind them. If costs continue to rise at a rate of three percent per year, the price of a Notre Dame education 25 years from now will be over half a million dollars.

But the arms race among private universities competing for prestige, applicants and ever-fattening endowments is nothing new. Similar surges in price apply to all of Notre Dame’s peer institutions. Hiring more administrators, maintaining compliance, funding research and spending $400 million on a stadium expansion are expensive endeavors, after all. Harvard’s cost has doubled since 2000, so what’s the problem?

Since Princeton implemented its “no loan” policy in 2001, other universities across the country have followed suit. One notable exception is Notre Dame. Although schools such as Harvard, Princeton, Amherst, Penn and Vanderbilt compete with Notre Dame in price, they all have “no loan” policies replacing student loan offers with additional gift aid and give 100 percent of students the opportunity to graduate debt-free. At Stanford and Yale, families earning under $100,000 pay no tuition; families making under $60,000 pay nothing at all.

By contrast, the average student loan debt for Notre Dame’s class of 2013 was $27,000. When you keep in mind that only 45 percent of first-year students receive gift aid and many students can’t afford the cost outright, the figure for indebted students becomes much higher.

“But Harvard, Stanford, Princeton and Yale all have endowments larger than ours!” you say. “How can we hope to be so generous?”

Consider this. By 2014, Vanderbilt’s endowment reached $4 billion, and it has offered a “no loan” policy since 2009. Notre Dame’s endowment now stands at $10 billion and rivals that of Ivies such as Penn and Columbia, yet we continue to fall behind the schools with which we hope to compete and cannot match the financial aid scheme of a university with an endowment less than half of our own. When paired with the wheels of industry digging around Campus Crossings to the tune of $400 million, it seems a difficult and unnecessary pill to swallow.

Not only would a “no loan” policy alleviate the burden of debt on recent graduates, it would attract more applicants, place Notre Dame in the company of our nation’s elite institutions and affirm the University’s commitment to accessibility irrespective of economic background. As only 45 percent of first-year students needed gift aid last year, it represents a modest investment with power to transform the post-graduate options of lower-income students.

The University owes students and families a public and thorough explanation for how tuition is used and why it keeps increasing, and the administration should explain its continued resistance to a “no loan” financial aid policy. Until then, I will find it difficult to depict Notre Dame as a better investment than the institutions it claims to rival.

The views expressed in this column are those of the author and not necessarily those of The Observer.

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  • John

    I couldn’t agree more that it would be great if Notre Dame could had a “no loan” policy, but there are several errors in your argument:

    -None of your tuition goes toward campus crossroads. The project is half funded by independent donors and half by bonds which ND took out at an all time low rate and will be paid off by the extra football revenue generated by the new buildings
    -You cannot draw a direct correlation between size of the endowment and amount given in financial gift aid please look at the university’s annual report to see how your tuition is being spent: http://annualreport2014.nd.edu/assets/154217/cont_3771_annual_report_final_for_web.pdf
    -While you say some students “many students can’t afford the cost outright,” Notre Dame meets full demonstrated need for all four years.
    -While tuition is increasing, the amount of gift aid given is increasing at a faster rate. (see annual report)

    No one like a tuition increase, but don’t claim that our administration is not moving in the right direction.

    • Sam

      As a financial aid student, I would like to address the “Notre Dame meets full demonstrated need for all four years.” ND bases this off of your expected family contribution (EFC). Once they have that number, say $10k, they provide you with enough aid. which includes grants, loans, and work-study (which you then have to earn) to cover that cost.
      Sounds great, right? One problem. All too often, the EFC is way off. This isn’t ND’s fault, because as far as I know, EFC is calculated by the federal government. Still, at least in my case, the EFC for my family is far beyond what we are actually capable of paying to send me here. Taking out extra loans and working extra jobs here at school then become necessary.
      In brief, “demonstrated need,” from what I have gathered from personal experience and from talking to friends also on financial aid, is rarely, if ever, enough, and EFC is almost always far too high, causing people like myself undue financial pressure.

  • McLovin

    “Although schools such as Harvard, Princeton, Amherst, Penn and Vanderbilt compete with Notre Dame in price, they all have “no loan” policies replacing student loan offers with additional gift aid and give 100 percent of students the opportunity to graduate debt-free.”

    Look at their amount of students at those schools that require financial aid. Harvard can be need-blind and have a no loan policy because they accept very few poor kids. Statistically, your family’s wealth correlates with higher test scores, more impressive extracurricular activities, and simply better performance in college. Notre Dame is a great school, and I love it, but let’s be real.

    • Derek

      Not sure what you’re saying. Harvard has a higher % of undergrads receiving pell grants (grants given to students from low-income families) than Notre Dame, and they’re still “no loan”. Maybe Notre Dame kids just don’t like government grants as much as Harvard kids, but free money is free money. so the fact that Harvard, Vanderbilt, and Stanford all have a higher percentage of students who qualify for these loans – and accept them – than Notre Dame should suggest something about the Universities’ willingness to accept and provide aid to students from low income families

      source –

  • Jose Albino

    I wonder how will I afford to send my kids to ND afterward. By the time I am forty, tuition could be more than $250,000/year and with that kind of money I rather buy a beach house in a tropical island in Honduras.

  • Danny

    I second everything John said.

    To address your no-loan policy argument and the comparisons you drew: no-loan policies do not give 100% of students the opportunity to graduate debt-free. Last year, Princeton was able to award 80% of its student body an average (strings free) financial aid package that was 80% of tuition, but for those average packages there is still 20% of tuition, room and board, and living expenses to pay for, so students may still have to take out loans to meet those, but they can’t take them out through Princeton. Notre Dame does grant a lot of no-loan scholarships (as you said, a bit over 45% of students get a package; this package is also no strings attached and on average worth 50% tuition). You might say that there is a big difference in these numbers between Princeton and Notre Dame – but Princeton has an endowment twice as big as Notre Dame’s and a student body half the size. Stanford and Yale both have endowments billions of dollars bigger than even Princeton’s – and well over $10 billion bigger than Notre Dame’s. A no-loan policy is a choice in policy but all it means is that more need scholarships are available but students who do not get need scholarships are not able to take out institutional loans from their schools. Also, all of the aforementioned schools bring in substantially more outside research money than Notre Dame and so have that additional source of funding.

    • Derek

      I just want to point out, if you second everything John said then you second his claim that endowment does not equal ability to provide aid to students. So why are you making the argument that Princeton can afford the provide more aid to its student’s because of the size of its endowment?
      otherwise, I definitely see what you’re saying about research funding

      • Danny

        The endowment is not the only thing that contributes to financial aid (for ND, individual donor gifts give dozens of millions of dollars per year towards it), but once interest generated by the endowment is big enough to cover operating expenses not covered by tuition, then any interest above that can be used for financial aid; basically, ND’s endowment cannot be directly correlated to financial aid because almost all of its interest is used elsewhere, but Princeton’s and Stanford’s can because they have plenty to go around.