Private colleges increased their tuition by an average of 3.9 percent in 2012-13, the smallest rise in four decades, the National Association of Independent Colleges and Universities announced Thursday. The association said its survey, which included responses from 445 of its 960 members, also found that the average institution's financial aid budget rose by 6.2 percent. The data come at a time of heightened pressure from politicians and the public for colleges to keep their charges within reach of students and families.
Moody's Investors Service said Monday that the weak return on Harvard University's $30.7 billion endowment, which the university announced last week had shrunk 0.05 percent in the 2012 fiscal year, is a bad sign for endowment-dependent universities. The rating agency said the results probably won't affect Harvard's rating, but are likely to lead the institution and others to rethink their dependence on endowments. "Based on highly variable investment returns over the past decade, we expect endowment-dependent institutions to make more conservative spending decisions for future fiscal years and to more fully assess their operational vulnerability to investment volatility," the agency wrote. "Budgetary models are increasingly stress tested, and management teams are adjusting to more conservative assumptions about long-term rates of return on their endowment. Many have lowered their assumed annual endowment returns to 7 percent to 8 percent, compared to the higher 9 percent to 10 percent return assumptions that were common prior to 2009."
Only a handful of private universities have announced their returns for the past fiscal year, but Moody's projects most endowments to have returns similar to Harvard's. "Most university endowments likely declined by 1 percent to 5 percent in fiscal 2012, net of new gifts, owing to weak investment performance and 4 percent to 6 percent endowment spending for the annual budget," the rating agency wrote.
A report Friday from the Lincoln Institute of Land Policy explores changes in the payments colleges, universities and other tax-exempt institutions make to municipalities in lieu of taxes, finding that they are concentrated in the Northeast and focus primarily on higher education institutions, which account for two-thirds of all payments in lieu of taxes. In recent years, as municipalities have struggled with revenue constraints, they have turned to asking local higher education institutions to contribute to the municipal budgets, a request that has sometimes led to confrontations between city leaders and higher education institutions, particularly in Pittsburgh and Providence.
Notable among the report's findings is that the majority of all money given to municipalities through PILOT agreements comes from just 10 institutions, eight of which are universities or academic medical centers: Harvard University, Yale University, Stanford University, Brown University, Boston University, Massachusetts General Hospital, Brigham & Women's Hospital, Massachusetts Institute of Technology, and Princeton University. The list suggests that municipalities target wealthy institutions, rather than those that are the biggest municipal burden or own the most land.
Harvard University's endowment is down about $1 billion in the 12 months through June, Bloomberg reported. The fund, still the largest university endowment in the world, ended up at $30.7 billion, down about 0.05 percent. Harvard, like many other universities, saw major losses the year that the recession started, but many other universities have been posting gains more recently. Harvard officials said that their losses were due to investments in publicly traded non-U.S. companies and in "emerging market" shares.
Submitted by Kevin Kiley on September 27, 2012 - 3:00am
The American Institutes of Research, the new home of the Delta Cost Project, released a report Tuesday detailing trends in college and university revenues from 2000-2010, the first of a series of four weekly reports about where colleges get money and how they spend it.
Because the data the reports are based on are two years old, many of the trends described in Wednesday's report will be familiar. Among the noteworthy findings in the report were that state appropriations have continued to decline over the decade; that per-student revenue at community colleges in 2010 was less than it was a decade ago; that net tuition revenue -- the amount colleges make from tuition after aid is subtracted -- at private institutions did not grow significantly between 2009 and 2010; and that tuition revenue exceeded state appropriations at public doctoral and masters institutions. The report also found that, in contrast to previous years, sticker prices at four-year public universities increased faster than gross tuition revenue. "This suggests that the practice of using other tuition revenue -- in particular from out-of-state students -- to mitigate tuition price increases for in-state students was no longer tenable in 2010," the report states.
Students and faculty members at Long Beach City College gathered at the college's board meeting Tuesday night to protest the planned elimination of 17 academic programs (and the likely layoff of 10 full-time faculty members), The Contra Costa Times reported. Most of the programs are in the arts or skilled trades, and those protesting said that these programs are vital for many students. College officials said that they had few options, given the severity of budget cuts in California.
The 10-person commission charged with plotting the future of the University of North Texas at Dallas released its recommendations Monday, largely backing a consultant's advice that the university focus on hybrid learning, minimizing the time to degree, and aligning courses of study with regional needs.
In 2011 the university commissioned 10 leaders from higher education, business, and local government, including Dallas Mavericks owner Mark Cuban and Dallas Mayor Mike Rawlings, to develop a strategy to expand the university from 2,000 students to 16,000 students while decreasing the cost of education and improving graduation rates. The Commission on Building the University of the 21st Century reviewed reports from the consulting firm Bain & Company, brought in on a pro bono basis in 2011 to suggest long-term plans for the 11-year-old institution, and from a group of faculty and staff who, critical of Bain’s analysis, drew up their own recommendations. While Bain advised increasing teaching loads and freshmen enrollment while decreasing the array of majors and integrating online courses, the faculty plan proposed focusing on transfer and underprepared students, developing a liberal arts core, and emphasizing research.
The commission’s recommendations, which its members will vote on Tuesday, largely fall in line with Bain’s suggestions. The 10 strategies the commission lists include developing hybrid courses that blend in-person and online instruction, increasing freshman enrollment, providing students with the option for year-round instruction, and working with local business leaders to develop degree programs that mesh with local workforce needs. The report states that the university will have a student focus and will value teaching over research, but acknowledges as one of its guiding principles, “Faculty play a key role in the success of students and UNT Dallas,” and suggests a comprehensive development program to engage faculty and staff in this “new model.”
A new report by the Federal Reserve Bank of New York finds a relationship between state appropriations cuts and tuition increases in public higher education. The report notes increased interest in the views espoused by critics of higher education that the availability of federal grants and loans has encouraged colleges to increase their charges. But the report looks at the tuition shifts since 2008, and finds that the greatest increases are in states that made the deepest cuts in spending on higher education.
Texas Governor Rick Perry, a Republican, is calling for public colleges and universities to offer students a four-year freeze on tuition, such that each entering class would be assured of paying the same tuition rate for the next four years, The Austin American-Statesman reported. He said this would encourage students to graduate in four years, and would help students avoid high debt levels. "If you get out of the University of Texas with a $50,000 debt, I don’t know if we’ve served you well," he said. In fact, student debt load at UT is not close to that level. Only about half of bachelor's recipients at the University of Texas at Austin borrow, and the average total debt for those who do borrow is just over $25,000.