Administration defends increasing tuition costs

By Sydney Garrett     10/6/15 9:10pm

Rice tuition has increased roughly 142 percent in the last 15 years, according to Rice’s archived tuition records. The cost of tuition for students entering Rice in 2000 was $17,150, while the cost for students entering in the fall of 2015 was $41,560.

Vice President of Finance Kathy Collins said that the rise in tuition is due to increasing costs of supporting Rice’s faculty, staff, facilities and other expenses.

“Costs go up every year because people get pay raises and benefit costs increase,” Collins said. “Other operating costs increase. Just like in a household budget, things are not flat from year to year.”

---

---

However, Collins said these increases are not simply due to growing costs of previously existing institutions or positions. Each year, Rice adds more facilities and resources. Each of these expansions entails additional shortand long-term costs.

“We’ve added any number of buildings, and each of those buildings brings a new cost to the budget, both the debt service for those buildings paid for with debt, and then the operating costs of the utilities, custodial staff and regular maintenance,” Collins said. “Rice continually looks for ways to improve and update the educational experience and courses offered to students.”

One professor, who requested to remain anonymous, said Rice is implementing changes that appear major but may not actually improve the learning environment. “The money is going to things like new buildings, paying the interest, giving students a much bigger experience,” the professor said. “There are many of these facilities that have appeared, but if you actually look at the number of classrooms or the quality of the classrooms, those have not changed that much. The total student [to] faculty ratio has gone up, not down.”

According to Collins, Rice has had to bring in more revenue and expand facilities in order to remain competitive with other comparable institutions.

“In thinking about revenues to support the university, we want to remain a top national university,and that requires having significant revenues to support everything we do,” Collins said. “We recruit globally. We offer the high-quality educational experiences of schools that are charging more than Rice.” The average tuition of private universities that are members of the Association of American Universities for 2015-16 is $48,011. Rice tuition has remained approximately $6,000, or about 12 percent, lower than the average over the years. However, according to the anonymous professor, this $6,000 difference in cost on average is insignificant, compared to the burgeoning cost of tuition.

“Right now that $6,000 benefit is really pretty minimal,” the professor said. “15 years ago, that was a huge decision for people, especially in the middle class, because they could afford Rice whereas they couldn’t afford somewhere else.”

Additionally, increasing tuition cost has a long-lasting impact on those students who do choose to attend Rice.

“20 years ago, people weren’t leaving universities with $100,000 in debt,” the professor said. “Families weren’t going broke, and that’s changed. It’s not that you’re getting a better education; you’re just getting more stuff. The question is if that is really worth leaving a huge amount of the population saddled with debt.”

However, Collins said that the guiding principle of tuition discussions has always been affordability, despite the constant trend of increasing tuition. She said the financial aid budget increases each year and 54 percent of entering first-year students are receiving financial aid this year.

“Rice should be affordable to all students, and that influences both how we think about the price and also our recruitment and financial aid practices,” Collins said. “Rice’s tuition has always been lower, on average, than the peer universities we compare ourselves with.”

Rice’s tuition has grown at a higher rate than these same private institutions in the AAU. The average increase in tuition from 2014-15 to 2015-16 was 3.5 percent, while Rice’s tuition increased by 4.2 percent. Collins said this is due to mathematical reasons.

“Our tuition is lower than our peers, so we have to increase by a larger percentage to generate the same incremental growth in revenue,” Collins said. “Because Rice’s [tuition] base is lower, for the same dollar increase Rice is always going to have to charge a larger percentage of increase.

Collins said the Board of Trustees approves a range of percentage increase for undergraduate tuition and room and board in December based on its Finance Committee recommendation, the president makes a decision on the rate within the recommended range, then the Board ratifies the rate in March. According to Collins, the Finance Committee includes the board chair, the president and at least five trustees.

Rice has experienced a net revenue growth of roughly 6 percent per student because of tuition, though the rate of increase has slowed in the past year, Collins said. She said costs have also increased by 6 percent annually.

“Tuition is only one piece of the revenue to support the operating costs of the budget,” Collins said. “Undergraduate tuition revenue, net of financial aid, accounts for 20 percent of our revenues. Tuition does not support 100 percent of the operating budget of the university.”

The costs that are not covered by tuition are paid for by the endowment, which in July 2014 was $5.5 billion. The endowment provides approximately 40 percent of the operating revenues, according to the 2013 endowment report.

Collins said tuition only covers approximately 44 percent of the cost of education, which was roughly $80,000 per student in 2014. She said the full cost of education includes a number of additional expenses.

“[The cost of education] is the cost of faculty and staff salaries and benefits,” Collins said. “It’s the cost of supporting facilities on campus, the utilities, the depreciation of facilities, the interest and debt service on the borrowing to support facilities. It’s operating costs of the library, and other operating costs.”

The budget for operational costs covers the salaries of the college coordinators, the faculty, the custodians, and other staff members. In addition, it pays for the college masters’ stipends and the costs of running and maintaining the buildings on campus.

The anonymous professor said the increasing budget and new facilities go hand in hand with a change in Rice’s priorities since the turn of the century.

“The entire university has become much more business-like in the last 15 years,” he said. “It’s going from a place where the goal was really about teaching and an educational environment rather to a business. We’re now in the business of higher education.” The professor said the way Rice’s increasing cost of tuition parallels national trends has made him question Rice’s claim of uniqueness.

“Despite our mantra about how unconventional we are, I think we’re very much the same as all universities,” the professor said. “You can’t say Rice is so different from everyone else when we do the exact same things as all the other schools.”

---