Tuition increases for the next few years will be greater than most measures of inflation, but College financial officers say they do not expect the percentage increases to be greater than previous years.
College Vice President and Treasurer Lyn Hutton said she expects the fee for tuition, room and board to increase by about 6 percent next year. Total charges for the current academic year are $25,720, a 6 percent increase over last year.
Although tuition for next year is officially set by the Board of Trustees during its Winter term meeting, Hutton's assessment comes at a time when administrators are beginning to finalize the College's more than $300 million budget for fiscal year 1996, which runs from July 1, 1995 to June 20, 1996.
"I do not believe we will have to increase the rate of increase," Hutton said.
Hutton also said she believes Dartmouth currently provides a better education at a lower price than many other competitive schools.
"I can't justify any way why out of that group of [competitive] schools, why we should be near the bottom ... when we're ranked higher," Hutton said.
College Provost Lee Bollinger said keeping tuition increases down is difficult. "We're looking for ways around [raising tuition] but it's very difficult. Everyone must remember that tuition really covers roughly half of the cost of educating students."
Bollinger said that "with a need-blind admissions program the effective tuition rate is far lower than the announced rate. Tuition is probably not going to stay static."
Budgets are planned over a three-year period, so at the same time planners are finalizing the 1996 budget, they are also making early forecasts of the 1998 budget by using modeling techniques. "It's fairly sketchy," Hutton said. "That view will get refined."
Currently every operating unit is reviewing its 1996 budget line by line and updating projections for 1997 and 1998.
About $160 million of the budget is allocated to pay the College's operating costs. The rest is appropriated to the Medical School ($80 million); the Thayer School of Engineering ($12 million); the Amos Tuck School of Business Administration ($13 million); the Hanover Inn ($40 million) and the auxiliaries, which include Dining Services and the Dartmouth Skiway.
These budgets are all planned separately.
This term the College Priorities Advisory Committee will meet to discuss the College's financial priorities. The committee is composed of five faculty members, three or four students, Hutton and Bollinger.
Budget priorities
The College currently has five financial management principles -- to maintain need-blind admissions; to uphold a competitive compensation structure (including salaries and benefits); and to refrain from cutting any core academic programs, eliminating any tenure track positions and deferring maintenance on College facilities.
The priorities are "ultimately what decides the budget," Hutton said.
College President James Freedman has asked CPAC to reevaluate and prioritize these principles this year.
"At the first meeting of the Committee of Chairs, the president said that he would like us to take a look at these principles, the reason being is that although there are some problems for the budget of 1995 and 1996, they're not huge," CPAC Chair and Classics Professor Jeremy Rutter said.
"The president has asked us to take a look at what adherence to those principles is costing the College." Rutter said the committee will "make a list of what the costs are and then I suppose we'll try to make some recommendations."
Bollinger said he expects all five principles to be reaffirmed. "One cannot say at this point that every one will be the same as in years past, but I would say that ... my own personal expectation is that those values will be reaffirmed," he said.
One area of particular interest is the need-blind admissions policy. Financial aid currently makes up about 17 percent of College expenditures.
"We are challenging very hard the financial aid budget in terms of assumptions," Hutton said.
Rutter said financial aid is a "major inflater."
"Is that smart, is that the right thing to do?" he asked. "That's a tough decision, I look forward to finding out more about that."
"The faculty are more vocal exponents of the need-blind admissions policy than just about anyone else I've heard, because if you're interested in student diversity, that's a major contributor to it," Rutter said.
The 1996 budget
After CPAC makes its recommendations in November, the Trustee Finance Committee will meet to talk about the 1996 budget and to assess the current fiscal year. Although some schools run budget deficits, Hutton said the College Trustees, "generally demand a balanced budget."
After the November meeting, groups on campus begin requesting money for the next fiscal year. "The appetite for new programs and expenses always exceeds the availability of revenues," Hutton said.
At the end of November and in the early days of December, "We have to start saying no," Hutton said.
By February a balanced budget plan for 1996 will be submitted and the Trustees will give formal authorization for increases in tuition, room and board.
Hutton blamed the need for tuition increases on decreasing federal funding and growing expenses -- including financial aid and library books. Both increase by about nine percent a year.
In the spring, the detailed line-item budget is prepared and loaded into the College's computer systems. Formal approval from the Trustees comes during the Board's June meeting.
Also in June the books are closed on Fiscal Year 1995 and the first look at 1999 will begin.
Hutton and Bollinger both said the College is in good financial shape.
"I think it's very healthy financially, I would not say that it is as robust as I would like, I wish there were more funds for innovations and experiments, but there are no deep un-resolvable financial barriers to continuing what are the essential strengths of the institution," Bollinger said.
Hutton said, "Overall we are slightly better situated in some respects then most of our peers," Hutton said. "We do pretty well with what we've got. Maybe it's that Northern New England frugality."
