Trustees approve a 2.9 percent increase in tuition, fees

Correction appended

The cost of attending Princeton University will increase by 2.9 percent next year, the smallest such raise since 1966, the University announced last week. In an effort to allay the financial stress on students and their families in this uncertain economic climate, the undergraduate scholarship budget will be expanded by 13 percent to help offset the 2.9 percent fee-package increase for students currently on financial aid and to assist students in next year’s expanded freshman class.

These decisions come as the University faces the most serious financial circumstances it has encountered in many years. While the endowment is projected to lose as much as 25 percent of its value by the end of the current fiscal year, the University’s budget reflects the increased financial stress on students and their families.

The aim of capping the fee package is to ensure that the most qualified students have no financial barriers to their success at Princeton, regardless of their families’ ability to pay, said Provost Christopher Eisgruber ’83, chair of the Priorities Committee (PriCom).

“[PriCom] believed it was essential for the University to recognize that the recession would increase the number of students needing aid,” Eisgruber said in an e-mail. PriCom recognized, he noted, that “even families not eligible for aid would be feeling financial stress from the recession, and that is why it held down the rate of increase to the fee package.”

Undergraduate tuition for the 2009-10 academic year will rise from $34,290 to $35,340, a 3.1 percent increase. Housing costs will rise 2.2 percent, from $6,205 to $6,340. Board costs will increase 2.7 percent, from $5,200 to $5,340.

These increases in the fee package come alongside a 13 percent increase in the scholarship fund from $92 million to $104 million, of which between $8 million and $9 million are specifically targeted to offset the effects of the current recession, Eisgruber said.

Faced with the largest incoming class in Princeton’s history and the increased need of the families of the students already on financial aid, the demands placed upon the University are also growing. The Office of Admission reported last week that 75 percent of the applicants to the Class of 2013 applied for financial aid, 5 percent more than the corresponding figure for the Class of 2012. The increased scholarship funds are designed to meet these needs.

The Graduate School is adopting similar measures. Tuition will climb to $35,340, and housing and board costs at the Graduate College will increase 2.2 and 2.7 percent, respectively. These rises match the corresponding fee changes for undergraduates. The University Board of Trustees approved a 3 percent increase in graduate-student stipends, however, to accommodate the mounting fees.

These decisions are meant to “protect the core [of Princeton] — what matters most — the quality of the students and staff,” President Tilghman said. These measures are “all about preserving human capital,” she added, explaining that they are primarily intended to ease the burden felt by faculty and students.

Many other parts of the University budget, however, are facing significant financial cuts.

Non-personnel administrative budget allocations will be slashed 8 percent, not raised 5 percent as has been done in the past. Dean of the College Nancy Malkiel said that though no specific decisions have been made, the College “will be reviewing [its] non-personnel operating budgets and making prudent judgments about economies that can be achieved.” The “overriding objective” of these cuts, she explained, will be “not to compromise programs and services that are important to students.”

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The pools from which faculty and staff salary raises are drawn will also be very modest this year compared to those of recent years. The PriCom report, nevertheless, notes that the University “was fortunate to offer salary pools in a year when some peer institutions have offered none.”

Instead of focusing on relative merit, the distribution of the money in the salary pools will be weighted in favor of the least-compensated staff to aid those most vulnerable to the effects of the recession. A progressive scale will be used to assign raises for assistant professors and employees in the lowest salary brackets, the groups receiving the largest percentage increases. A ceiling of $2,000 has been placed on raises for tenured professors and the most-compensated University employees.

The budget will also require the University to scale back faculty recruitment. New requests to begin or re-open hiring searches will be subject to review by Dean of the Faculty David Dobkin, but it remains unclear exactly what impact the recession will have on bringing new faculty to campus. “We hope to be searching in a more favorable job market if some of our peers are freezing new faculty hires,” Dobkin said in an e-mail. “We will decide later in the spring which faculty searches to authorize for next year. Many of the variables that will guide that decision remain unknown at this point. So, in the short term … things will either be as they would have been or possibly better. In the long term, its hard to project what will happen.”

A few campus programs have survived funding razes. Eisgruber said PriCom authorized the allocation of funding to health care and sustainability programs, recognizing “some increases to program are required even in years when the University finds itself forced to pull back on initiatives and cut costs.”

Overall funding devoted to programmatic requests, though, will suffer. This year’s $500,000 represents a two-fold reduction from last year and a three-fold reduction from two years ago.

Tilghman said that it is likely that similar measures will be considered for next year if the downturn persists and the “math drives to [that] conclusion,” noting the “great uncertainty” of how long the current recession will last.

Despite the University’s unprecedented financial position, however, Tilghman said she is confident the University will be able to successfully “weather this economic storm” due to its prudent fiscal management and pervasive sense of community.

“Over decades the University has exercised prudence, had terrific endowment returns and benefited from strong management of its resources,” she explained. “Thus, we have more levers that we can pull to buffer the worst possible consequences of the downturn.”

Tilghman added that she has been overwhelmed by the “enormous wellspring of goodwill” with which departments and colleagues across campus have responded.

“Whether it is asking departments to invite fewer visiting fellows and scholars next year or delaying such a critically important project as the new neuroscience institute, I have been met with not just understanding, but an eagerness to help in any way that is possible,” she said.

Eisgruber also stressed how important it was for the entire Princeton community to band together to help navigate these fiscally trying times.

“These cost-cutting measures will enable Princeton to protect its commitments to teaching, research, and financial aid,” he said. “They will not be easy, though, and everyone on the campus will have to cooperate to protect the strength of this institution.”

Correction

An earlier version of this article stated that 75 percent of the 1,300 students in the Class of 2013 applied for financial aid. In fact, 75 percent of the applicants to the Class of 2013 applied for financial aid, up from 70 percent of the applicants to the Class of 2012.