Despite $30M budget surplus, tuition rises
ERIN PIROUTEK
Associate News Editor
Money is everywhere at Notre Dame. The Generations campaign reached its $767 million goal 18 months ahead of schedule. The endowment climbed to more than $2 billion dollars. During football weekends the sold-out stadium, NBC contract and booming business at the new bookstore suggest an endless stream of wealth.
But tuition continues to rise.
A letter from University President Edward Malloy to parents boasts of "the lowest percentage increase in tuition and fees in two decades — 5.2 percent." Although it sounds like the University reached a major breakthrough, each student still needs to pay Notre Dame about $1,000 more than last year, when tuition was $20,900.
Notre Dame undergraduates are baffled.
By all accounts, the University had a financially successful year in fiscal 1999, with a $259.3 million increase in net assets. The University usually finishes the year with a budget surplus.
"The average budget surplus is well over 30 million dollars per year," said Notre Dame student body president Brian O'Donoghue.
$30 million question
The budget surplus is not well-publicized, but students who know about it are surprised that tuition increases are still necessary.
"When you have a $30 million surplus like that, I think it's totally inexcusable to raise tuition," said junior Julie Carbol.
Scott Malpass, Notre Dame vice president of finance, acknowledges that the budget usually has a surplus. He explained that at the end of the year, the budget office, provost Nathan Hatch and executive vice president William Beauchamp, discuss how to allocate the money. Last year the surplus was spent on capital improvements, academic needs and financial aid.
Notre Dame doesn't pretend to be cheap. It costs more than a million dollars a day to operate the University. Financial aid literature warns students that paying for Notre Dame requires sacrifice and that "annual increases in the cost of a Notre Dame education are anticipated."
But in light of Notre Dame's vast financial resources, why does tuition continue to rise? Malpass explained that Notre Dame's goal is to increase its academic reputation.
"Notre Dame is in a mode of continuing advancement," said Malpass. Currently ranked 19th in the influential U.S. News and Reports rankings, Notre Dame is striving to better not only that ranking but also the overall quality of academics, research and student life.
And advancement is expensive.
Building to the future
Construction occurs at a dizzying pace. More faculty positions are necessary for smaller classes and more student—professor interaction. Thanks to massive improvements in recent years, Notre Dame's technology infrastructure is in the top 1 percent among colleges and universities.
One reason the University focuses on advancement is to continue recruiting quality students. The average SAT score of the freshman class has risen substantially over the past several years. Today's students pay for new advancements to attract tomorrow's best and brightest.
But shouldn't it be possible to provide a quality education, maintain a top ranking and make Notre Dame affordable to all students? Williams College, a Massachusetts liberal arts school, decided to freeze tuition for the first time in 46 years, creating a buzz in schools across the nation. Notre Dame doesn't expect to follow suit anytime soon.
"We continually have to raise tuition to continue that advancement," said Malpass, citing William's move as a short-term solution that would cause long-term problems. Williams used money from its endowment to cover the tuition increase.
"Yes, we could [freeze tuition] — absolutely. But that means we'd have to find the money from somewhere else," said Malpass, emphasizing the importance of the endowment for Notre Dame's future.
Malpass explained that Notre Dame's $2 billion endowment is not sufficient to halt tuition increases and provide security for the future. Although Notre Dame's alumni are more generous than most, donors often have specific requirements, which don't necessarily coincide with students' desire for more scholarships.
"People don't want to give money to financial aid, they want their names on things," said O'Donoghue.
Excellence for all?
Perhaps more important than the overall cost of Notre Dame is whether the University helps all students afford it.
Officials note with pride that the amount of financial aid has increased a much greater percentage than tuition has.
Admission to Notre Dame is need-blind and the financial aid office boasts that it now meets all students' demonstrated financial need. In the current school year, Notre Dame undergraduates receive more than $27.8 million in need-based University scholarship aid and $15.8 million in need-based student loans.
But individual families often have greater need than the formula demonstrates.
"Notre Dame is not meant to be, nor was it ever meant to be an institution for upper-class kids," said O'Donoghue.
Less than half of the freshmen class — 39 percent — receives scholarship assistance. Although the University is proud of its increased scholarship funding, is Notre Dame really doing enough if 61 percent of students do not receive scholarships? Or is the majority of the freshman class wealthy enough that it doesn't need scholarship assistance to foot the approximately $30,000 yearly bill for tuition, room and board?
For those who do receive aid, often a large potion of the need is met not through scholarships, but "self-help" measures such as loans and work-study. While in theory, "self-help" programs place necessary responsibility on the shoulders of the students, it may require more help than students are able to give.
"From my point of view the administration has not helped me at all financially," said Carbol. "I will be so far in debt when I get out of here,"
Administrators say they are aware of student debt worries but, as of yet, no solutions have been developed. "The University is currently striving to address the concern for student debt levels," said Joseph Russo, director of financial aid. Students, however, will continue to struggle until the concern translates into specific changes.
Students who have to or want to pay for their education themselves find it nearly impossible, even with great sacrifice. At six dollars per hour — the approximate pay rate of student campus jobs — a student would have to work 96 hours a week, year-round, to pay the $30,000 yearly bill for a Notre Dame education.
For some, it's just not worth it. All of her life, Erin Emme has been a Notre Dame fan. When she was accepted at Notre Dame and entered school in fall 1998, it was the realization of a dream. But Emme, a theology major, left Notre Dame after her freshman year.
"Since I was going into such an un-lucrative field and because I wasn't going to make any money, I couldn't justify the cost," said Emme.
"My experience with the people in financial aid [is that] these people are passionate," said O'Donoghue. "I've always been impressed with their dedication to the students."
But financial aid officials work with strict rules and formulas rooted in the concept of demonstrated financial need. Personal situations don't always show up in the numbers that the financial aid officers see.
"In some cases there will be allowances for individual circumstances," said James Malloy, associate director of financial aid. "That's part of our business, to listen and respond to each family."
It's not easy, though. Financial aid officers require convincing proof that family circumstances have changed or the aid formula overlooked the specific financial difficulties.
Athletics to the rescue
Notre Dame has also continued to pursue funding sources from outside the University. Notre Dame's television contract with NBC for home football games has bolstered financial aid by $50 million over several years. Additionally, the University requires that a portion of the ticket profits is returned to the general operating budget for academic services.
"Notre Dame may be the only major institution where athletics actually funds academic advancement — at most schools the athletic department loses money and must be funded by the university," said Malpass.
But while students can hope that the growing endowment and football revenues will provide more financial aid in the future, the University has no plans to discontinue tuition increases.
"Quality is expensive. That's just the bottom line," said Malpass.
All News Stories for Friday, April 28, 2000
