Princeton trustees approve operating budget, bolster financial aid
Princeton University trustees Jan. 28 approved a 5.6 percent increase in undergraduate financial aid in adopting an operating budget for 2012-13 that includes a 4.5 percent increase in tuition, to $38,650.
Provost Christopher Eisgruber said the increase in the financial aid budget will maintain Princeton's commitment to full access to its education to any student who is admitted, regardless of ability to pay and without the need for loans.
"One of Princeton's defining commitments is its promise to ensure that a Princeton education is affordable to every student," Eisgruber said. "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."
The increase in the financial aid budget for 2012-13 to $116 million continues a trend in which Princeton's scholarship spending has outpaced fee increases for a decade. As a result, the average "net cost" for Princeton students today is lower than it was in 2001, even before adjusting for inflation. During the past 15 years, Princeton's average annual fee package increase has been among the lowest in the nation, and in two of the previous three years, the percentage increases in the fee package were the lowest in more than 40 years.
Generous financial aid
Sixty percent of the current student body receives financial aid, compared to 38 percent in the Class of 2001, reflecting the University's pioneering no-loan financial aid program that enables Princeton students to graduate with the lowest student debt among national universities. This year, the average grant is $35,352 and for the coming year it is expected to be in excess of $37,000. The financial aid program meets the full need of students on aid, and extends to some families making more than $250,000 per year.
The total undergraduate fee package increase of 4.5 percent includes the 4.5 percent tuition increase to $38,650; a 5.4 percent increase in room charges to $6,950; and a 3.8 percent increase in board rates, to $5,680 for a full meal plan.
The trustees also approved a 4.5 percent ($1,650) increase in the regular graduate tuition, from $37,000 to $38,650, the same as undergraduate tuition; a comparable increase in the Dissertation Completion Enrollment (DCE) graduate tuition, from $2,800 to $2,930; a 4 percent increase in board rates at the Graduate College; and an average increase of 3.5 percent in room rates for University housing for graduate students, faculty and staff, including a 5 percent increase in some faculty and staff housing units that are currently below market. The trustees approved a 3.2 percent increase in graduate student stipends.
The Student Health Plan fee will rise from $1,620 to $1,850, reflecting the need to offset rapidly rising medical costs.
The fee changes are included in a 2012-13 overall balanced operating budget of $1.5 billion adopted by the board at its Jan. 28 meeting. The budget proposal, based on the recommendations of the Priorities Committee of the Council of the Princeton University Community, was presented by President Shirley M. Tilghman. The committee, which has served for four decades as the mechanism for recommending fiscal and programmatic priorities, includes faculty, students and staff.
Eisgruber noted that the operating budget has benefited from a 21.9 percent return on investments by the University's endowment in the past fiscal year, as well as University-wide cost-savings initiatives. Following the recent global economic crisis, the University successfully completed a two-year $170 million reduction in the operating budget, and all academic and administrative units achieved or surpassed their budget reduction plans, he said.
"Despite this good news, the University budget continues to reflect lingering impacts from the recent recession, and the Priorities Committee was able to recommend a balanced budget only through continued financial discipline and a planned draw on one-time reserves," Eisgruber said. He added that the committee has stressed the need to eliminate its draw on one-time funds as soon as possible and begin rebuilding strategic reserves that it relies upon to recruit new talent, fund new initiatives and respond to economic adversity.
Eisgruber said the Priorities Committee's work was influenced by the prospect of continuing uncertainty in the U.S. and international economy, as well as pressures upon federal support for sponsored research.
“One lesson learned from the great recession was that the University needed more effective mechanisms to identify opportunities for budget efficiency and to enhance management practices,” Eisgruber said.
Eisgruber said SUMAR ("Strengthening University Management and Resources"), a committee that meets regularly to design and implement cost-saving strategies, has during the past year and a half tracked about 60 proposed initiatives that are expected to save more than $13 million annually from departmental budgets and central accounts. SUMAR's five highest priorities this year are vehicular fleet management, computer server consolidation, new financial and budgeting tools, absence management for staff members, and controlling the costs of health care benefits.
The budget includes funds allocated for salary pools for faculty and staff, which will increase at the same rate as last year, when the funds were restored to pre-recession levels after two years of constraints. The pools enable managers to reward meritorious performance and remain competitive in attracting and retaining members of the faculty and staff.
Focus on priorities
The budget includes a total of $500,000 to fund high-priority initiatives in internationalization, health and well-being, and public safety.
The high-priority initiatives that will receive funding include:
- increasing the dispatch capacity in the Department of Public Safety to strengthen public safety response and enhance critical security protocols;
- hiring an additional staff member in the Office of International Programs to help students find placements overseas and to address risks they may face when abroad, develop new courses and programs abroad, and assist in managing international summer internships;
- maintaining the heavily used fitness equipment in the Stephens Fitness Center in Dillon Gym and extending the opening hours; and
- expanding the use of background checks in the hiring of all University employees other than faculty members, while suggesting a study of the potential expansion of the program to include members of the faculty.
Eisgruber said the University will continue to focus on fiscal discipline while pursuing its key priorities, such as launching new initiatives; preserving its commitments to generous financial aid, superb teaching and world-class research; and retaining the human capital — students, faculty and staff — crucial to its excellence.
"The University accordingly must continue to seek out creative ways to find efficiencies and reduce expenditures," Eisgruber said. "Most importantly, the University must concentrate its resources on the priorities that are most crucial to its mission."