Tuition increase announcedBy Ben Stanger
President Paul E. Gray '54 announced Friday that the total cost of tuition, room and board at MIT will rise to $15,230 next year. That is an $830, or 5.8 percent, increase over last year's fees. The figures, however, do not include the cost of books, travel and miscellaneous items.
Tuition will increase to $11,000 -- a $700, or 6.8 percent, jump. Room and board will increase by an average of $130 to $4230, a 3.2 percent increase over last year's average cost of $4100. The self-help level will rise 6.5 percent to $4900.
Gray announced the increases Feb. 28 after approval by the MIT Corporation Executive Committee. The MIT Academic Council recommended the increases.
The Academic Council met Feb. 19 to discuss tuition and self-help levels for 1985-86. Undergraduate Association President David M. Libby '85 attended the meeting. "The Academic Council is basically an advisory council to Gray ...," Libby said, "... but that's where the decisions are made."
Libby said the committee members discussed several alternatives. They considered the Institute's "financial picture." They looked at how a variety of combinations of tuition and self-help would affect the Institute's budget and student welfare, he said.
Gray said there were several factors involved in the final decision: the effects of increased costs on students' enrollment at MIT; the tuition at other selective universities; and the anticipated operating costs of the Institute.
"You have to make some judgements about what the economic circumstances will be like," he said.
Gray said 12 percent of tuition revenues are given as scholarships annually.
MIT Vice President Constantine B. Simonides said $90 million of MIT's $600 million operating budget came from tuition. Other funds used toward education came from interest returns on the endowment -- about $37 million -- and gifts -- about $22 million.
About one-third of the operating budget is used for educational purposes. The remainder is used for research on campus and at the Lincoln Laboratory.
Simonides said the rise in tuition results from salary increases, new programs and compensation for poor returns on the endowment and gifts. Gifts do not increase significantly even in a strong year, he said. But salaries, utility costs and new program expenses rise annually at a rate much greater than the Consumer Price Index (CPI), he added.
Gray said tuition is not related to common indicators of the economy such as the CPI or the Gross National Product (GNP) deflator. The Higher Education Price Index and the Research and Development deflator are better indicators of tuition increases, he said.
Tuition generally rises at a rate two to three percent in excess of inflation as measured by the GNP deflator, he said. Gray added that students can expect tuition to rise by about seven percent each year, as long as inflation remains at about four percent.
Simonides said several of the Ivy League universities have already announced next academic year's tuition. Harvard University's tuition, including fees, will be $11,360.
Princeton University ($10,960), Brown University ($10,825), and Stanford University ($10,476) are other selective institutions which have announced their tuitions for next year.
He added that MIT's 6.8 percent tuition increase is lower than any Ivy League schools' increase. "By increasing more, they're catching up," he said.
Both Gray and Simonides agreed that MIT's tuition is generally higher than tuition at other colleges. This is because of greater research and development expenses.
Libby commented on the Academic Council's recommendations. He said, "Given the overall rather poor financial situation of the Institute, the increases in tuition and self-help are within reason." But he criticized the handling of MIT's budget. He cited three areas in which MIT has met with "less than success."
He criticized the Institute's lack of anticipation of the present financial situation and the management of the endowment. He also said that the operating expenses of operations, such as Graphic Arts and food services, should be handled more efficiently. He finally claimed that a bigger effort should have been made to solicit unrestricted gifts and grants.
Libby linked the Institute's financial problems to funds which were earmarked for specific purposes and facilities. Tuition has increased as a result of restricted gifts and MIT's relatively small endowment, he added.
Libby said when a school such as Harvard meets financial difficulties, it utilizes part of its endowment. MIT does not have that stock. He added that the Institute is initiating a $200 million fundraising campaign which will span the next ten years.
Tuition will be lower than expected because the Institute was in the black this year, Libby continued. He attributed part of the positive cash flow to a 15 percent budget cut at MIT over the past three years.
Gray said this is the final year of a three-year program limiting administrative support services. The cuts have put some restraints on library spending on low-circulation journals and caused a five percent reduction in support staff jobs.
Gray, Simonides and Libby all expressed concern over President Ronald Reagan's proposed federal financial aid cuts, but they agreed that Congress would probably not approve the proposal.
Simonides said Institute loans and the self-help level would rise if the cuts were made. Students would have to pay some interest on loans while still in school. "I think this is more of a scare than a project," he said.