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Questioning tuition

Observer Viewpoint | Thursday, September 1, 2005

The new gateway on Notre Dame Avenue may remind you of the entrance to a national cemetery. But it also reminds students that their University has lots of money, including the 19th largest endowment and a tuition that rises with the best of them.

This year, the Consumer Price Index (CPI) rose 2.5 percent. Notre Dame tuition, room and board (TRB) rose 6.6 percent, from $37,100 to $39,552. Spending from the $3 billion Endowment covers one-sixth of the University’s total expenditures. But student tuition and fee income provides nearly 60 percent of the University’s operating revenue. Since 1999, TRB increased by 39 percent, while the CPI increased by only 16 percent, but the University increased its financial aid by 151 percent. Notre Dame, through its excellent Financial Aid office, commits to meet the financial needs of every student, but that generally includes the student’s commitment to take loans, whether federal or private. A loan is “financial aid.”

A 2005 Cato Institute study concluded that increases in federal financial aid enabled universities, beginning around 1980, to expand their research and building programs, relying on federal loans to pass the costs on to students. As federal loan availability rose, the major universities raised their tuition, then lobbied for increased federal loans, then raised tuition, and so on. The loan burden deters non-wealthy students from attending universities that play the tuition game. “At the most selective private universities across the country, more fathers of freshmen are doctors than are hourly workers, teachers, clergy members, farmers or members of the military combined.” N.Y. Times, April 22, 2004, p. A1.

Notre Dame is far from the worst offender. But it has used federal loan programs to expand its plant and to pursue Research Greatness while shifting the cost to students through tuition rises beyond the inflation rate. During the past 18 years, 27 new buildings were erected and 20 major renovations of other buildings took place. The end of the building binge is not in sight. The inevitable high-rise parking garage will symbolize Notre Dame’s conversion to a crowded urban-type campus. We lack empirical evidence of any ability of our leaders to reject any big donation for any building project.

In 1978-79, when Notre Dame first proclaimed itself “A National Catholic Research University,” the Notre Dame TRB was $5,180. Adjusted for inflation, using the CPI, the 1978-79 total, in 2005 dollars, would now be $15,420. In real money, the TRB is now more than 2-1/2 times what it was when Notre Dame began its pursuit of Research Prestige. In 2004-05, the average need-based University scholarship, given to the 44 percent of undergrads who qualified, was $16,740, bringing the total amount a scholarship student had to pay by cash, loans or work, down to $20,340, or $4,920 more than the 1978-79 TRB in real money.

The primary historic mission of Notre Dame was undergrad education in the Catholic tradition, with research in an essential, complementary role. Research, especially in the sciences, is an important part of Notre Dame’s mission. But the research enterprise ought not to be the tail wagging the dog.

Our leaders act in what they see as the best interests of Notre Dame. Any criticism here is of policies, not persons. But the burden of loans, required to finance the research enterprise, tends to compel Notre Dame grads to forego graduate education or community service and to defer marriage. It can make it difficult for those who do marry to remain open to having children.

Notre Dame has been criticized at times for aping the Ivy League. Princeton, however, has a policy that Notre Dame ought to emulate. Princeton informed its incoming class of 2009: “Since … 2001-02 … no Princeton aid student has been required to take out a loan to pay for his or her education. The amount that a student normally would have received is replaced by increased Princeton grant. Our ‘no loan’ policy was a bold step in the opposite direction from a national trend whereby student loans had grown to … 60 percent of all aid and a typical student was borrowing nearly $20,000.” Princeton’s TRB is $38,297. In 2004-05, 608 students, or 52 percent of the Princeton freshman class, received scholarships averaging $26,100 for a total scholarship aid of $15.9 million. Students can obtain loans to cover unexpected expenses. But the basic aid package is “no loan.”

Princeton is not Notre Dame. It is smaller, with 6,836 students, including 4,678 full-time undergrads. Its endowment in 2004 was $9.9 billion, 3 times Notre Dame’s. Notre Dame, however, has a unique ability to bring huge sums cascading into its coffers for special purposes. Notre Dame, as a Catholic university, should take the lead to enable its grads to serve the common good, and the good of their families and the Church, without a disabling student debt. To a regrettable degree, Notre Dame is investing instead in bricks, mortar and ostentation. Notre Dame has a higher purpose. Our leaders ought to consider the Princeton approach.

Professor Emeritus Rice is on the Law School Faculty. His column appears every other Thursday. He can be contacted at [email protected]

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