Tuition and financial aid increase in new budget
The budget includes increases in both undergraduate financial aid and undergraduate fees. At $51,280, the total cost of a Princeton education now exceeds $50,000 for the first time in University history.
The 4.5-percent increase over last year’s undergraduate fee package is higher than the 3.3-percent increase in last year’s undergraduate fees. In 2010, the University increased fees by just 2.9 percent, the lowest increase since 1966.
The operating budget that President Shirley Tilghman presented to the trustees was based on recommendations from a Jan. 18 report by the Priorities Committee. The committee, chaired by Provost Christopher Eisgruber ’83 and a subdivision of the Council of the Princeton University Community, is composed of three other senior administrators, six faculty members, four undergraduate students and two graduate students.
University Spokesperson Martin Mbugua explained that the Priorities Committee deemed the fee increase necessary to balance the budget.
“The University is still drawing on reserves to balance its budget, and one of the goals of the committee is not only to eliminate the need to do that, but to begin to replenish the reserves to be prepared for any future financial challenges,” Mbugua said in an email to The Daily Princetonian.
The fee increase includes a 4.5-percent increase in the cost of tuition to $38,650, a 5.4-percent increase in room costs to $6,950 and a 3.8-percent increase in the cost a full meal plan to $5,680.
But the University hopes that the 5.6-percent increase in undergraduate financial aid will blunt the effects of the fee increase.
“One of Princeton’s defining commitments is its promise to ensure that a Princeton education is affordable to every student,” Eisgruber said in the press release.
“All students who receive financial aid are insulated from any increases, because aid packages are automatically adjusted to compensate for changes in fees, so Princeton’s scholarship budget will once again rise more rapidly than the fee package,” he added.
The new budget includes a projected $115,764,000 for undergraduate financial aid, the largest total sum in University history. The total represents 7.63 percent of the University’s total budget, up from 7.5 percent last year but not quite as high as the 7.9 percent of the budget dedicated to financial aid in 2010-11.
For the 2011-12 fiscal year, the budget is currently estimated to include $109,663,000 for undergraduate financial aid. The average financial aid grant was $35,352 for the 3,102 financial aid recipients. For fiscal year 2013, the average grant for all undergraduate students is expected to exceed $37,000, Mbugua said.
In the fiscal year that ended in June 2011, the Priorities Committee completed its goal of reducing spending by $170 million over two years. The move was intended to prevent the University from running a deficit in the wake of a recession that had shrunk the endowment.
This year, Eisgruber noted that the University had benefited from a 21.9-percent rate of return on the endowment, which increased in value to $17.1 billion. Still, the University once again drew on reserves to balance the budget.
Mbugua said in the email that endowment spending covers nearly half the University’s operating budget. The University aims to limit yearly endowment spending to between 4 percent and 5.75 percent of the total endowment.
The report by the Priorities Committee also suggested that the trustees consider increasing the range. While such an increase would have a number of short-term benefits, in the long run it could cause the endowment to shrink, the report said.
Additionally, the report outlined the Priorities Committee’s recommendations for how the University should utilize the $500,000 it receives in the budget to fund urgent requests from specific University departments.
The Committee decided to use this money to fund an increase in the Department of Public Safety’s dispatch capacity, hire an additional staff member for the Office of International Programs, extend hours and maintain equipment at Dillon Gymnasium and increase the background checks for faculty and staff.
“The initiative will support two additional dispatchers in the Department of Public Safety communications center to enhance dispatch and emergency response,” Mbugua said, noting that DPS currently has 62 professional police officers, security officers and other team members.
The Committee, however, turned down requests from the Graduate School and the Office of the Dean for Research for additional staff. It also denied a request to create a position to coordinate the hiring of foreign nationals abroad.