Institute runs deficit for third year in a row
By Eva Moy
For fiscal year 1991, ending June 30, 1991, the total Institute deficit totaled $330,000, according to the FY 1991 Report of the Treasurer. This marks the third consecutive year that the Institute has reported a deficit.
Costs of operations for the fiscal year exceeded revenues by $9.3 million, of which $9 million was paid through use of unrestricted funds, or moneys that have not been set aside for a specific department or laboratory. The remaining $330,000 constituted the deficit for the year.
The $333,000 was paid by other funds specially set up for these cases.
According to the the Report on Financial Results of Operations for Fiscal 1991, which was released in August, the deficit had been expected to total $3.4 million. The actual deficit fell below these expectations because MIT received $9 million in unrestricted funds instead of the expected $5.5 million, the report said.
Unrestricted funds would have otherwise been used toward endowments, said Vice President for Financial Operations James J. Culliton. But at least money set aside for endowments was not needed to meet the deficit, he added.
shows slight increase
Total on-campus research funding, both federal and non-federal, increased by about 1.6 percent to a total of $315.8 million. Off-campus research volume decreased by 7.1 percent, according to the Report on Operations.
There were a few significant changes in funding. Funding from NASA increased by 23.2 percent, and industry increased by 4.89 percent, while Defense Department support decreased by 4.1 percent.
These figures may not necessarily foreshadow revenue increases or shortfalls among research laboratories in the near future. With less funding, the laboratories will have to spend less and will end up with less debt by the end of a fiscal year, Culliton said.
"We haven't felt the effects yet," said Katherine Ware, Financial Administrator of the Department of Earth, Atmospheric and Planetary Sciences. "One of the things we have seen [is that] NASA waits until they get the money. . . . Funding at NASA is very focused," she said.
Major programs, like the space station and Magellan projects, may show increases in funding more than individual projects, she added.
Some other departments also do not yet know how the changes will affect them. "It's hard to say," said Barbara A. Cooper, senior secretary for the Center for Space Research. She added that although some contracts went up, the money amounts involved decreased overall in the space research center.
"In the future, a worry may be [that] with the redirection of the Department of Defense and other [research funding sources] MIT research may not be growing as much as in the past," Culliton said.
The Report of the Treasurer also addressed undergraduate financial aid concerns. The ratio of cost of education to tuition was 2.02, with the actual figures per person totaling $31,436 to $15,600, the report said. Generally this ratio is kept to about 2 to 1, and has stayed between 1.86 to 2.02 in the past five years, according to a memorandum from Anne H. Whealan, assistant director of finance.
The problem for MIT is that in order to maintain this ratio, it has had to increasingly rely on unrestricted funds for student financial aid. The Task Force on Undergraduate Financial Aid Policy, a one-time group formed in 1985, suggested that these funds not exceed 15 percent of tuition income. For fiscal year 1991, this amount was greater than 17 percent, according to the Report on Operations.
The Academic Council, chaired by President Charles M. Vest, will have several meetings dealing with this issue, Culliton said.
"The need to use an increasing level of MIT unrestricted funds for undergraduate financial aid continues because MIT maintains its policy of meeting the full financial need of all undergraduate students while federal and other sources of scholarships have not kept pace with the expenses of a university education," the Report on Operations stated.
Already for fiscal year 1992, the self-help level will increase by $400 to a total of $6100. This will in fact be an increased burden on the richer families to help pay for more financial aid for those not as well off, Culliton said.
"We need to review our policy in this area and decide an optimum tuition/self-self/endowment income scenario to assure continuance of need-blind admission without a significant increase in unrestricted supplement. As well, fundraising efforts following the campaign should continue to place a high priority on gifts for student financial aid," the Report on Operations stated.
NSF fellow tuition
payment up by $1500
On the other hand, the National Science Foundation has agreed to increase the tuition payment for its NSF fellows nationally from $6000 to $7500, according to the Report of the Treasurer. MIT pays the difference between that amount and the 12-month tuition, totaling approximately $22,500 per graduate student, said Dean of the Graduate School Frank E. Perkins '55.
There are currently 225 active fellows.
The increase still does not close the gap between what NSF pays and the cost of tuition, but it is a change from the flat $6000 that NSF has paid for the past six years, Perkins said.
Informally, NSF has told MIT that they would raise this amount by $1000 every other starting after the 1992-1993 year, Perkins said. But this increase, amounting to an average of $500 dollars per year, would still not keep
up with the rate of increase of tuition, Perkins added.
Student stipends would also be increased on the alternating years, Perkins said, but all of these increases would depend on the NSF's budget in any given year.
Another change is that NSF fellows are now formally permitted to accept part-time research assistantships. In the past, NSF had not allowed this because all of tuition is paid so that the student can concentrate solely on his studies, said Perkins.
The departments will now have to justify the appointment of NSF fellows to one-quarter RAs, said Perkins. They "can't be a digression from their education," he said.
By working as one-quarter RAs, the student receives one-fourth of the RA stipend, and the research sponsors pays one-fourth of tuition. This means that MIT has to pay less of NSF fellows' tuition, and this money can be used for other purposes, said Perkins.
MIT didn't encourage this before, because they were "worried about some people receiving substantially more stipend than others," said Perkins.
"In the past, one or two departments [had NSF fellows serving as RAs], but it wasn't a widespread practice. Now we're encouraging departments wherever possible," said Perkins.
NSF fellows will now be funded by their research sponsor, in addition to NSF and MIT. Graduate students who are NSF fellows currently get all of their tuition paid in full.