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The numbers change, but the concerns are always the same: how can tuition go up so much? For the 2015-2016 academic year, undergraduates will pay $47,929 in tuition and fees to attend Notre Dame. This is a 3.7 percent increase from last year, the smallest increase Notre Dame has seen in 55 years, but how does tuition fit into the university’s finances as a whole?
Making up about 35 percent of the university’s budget, tuition is still an important source of income. According to Vice President for Finance John Sejdinaj, tuition used to be the largest component of the budget, making up well over 50 percent. By consistently trying to increase other streams of revenue (the endowment, research, auxiliary enterprises, unrestricted giving), the university has been able to control tuition.
“Supply and demand would tell you we could raise our tuition a lot greater because the demand is there. If we went to market pricing, it would be like ‘how far can we go?’ We don’t do that,” Sejdinaj says.
Keeping in mind the needs and situations of students and their families, Notre Dame administrators actively increase other streams of revenue in an effort to keep tuition low.
“Every student at Notre Dame is getting subsidized. Their tuition dollars do not pay for the cost of tuition that they get. It is subsidized by endowment and auxiliaries,” Executive Vice President John Affleck-Graves says.
Notre Dame has central budgeting, which makes it impossible to say directly where tuition dollars are spent. All unrestricted revenue goes to the same pool and is spent from there.
According to Sejdinaj, however, a big part of rising costs is the university’s aspiration to be great and provide a first-rate education to its students.
“We want students to have great professors. We want them to have small classes and study abroad opportunities and the career center so they can get a job, a great residence hall experience. You put all those things together; it is costly,” Affleck-Graves says.
The university has made immense progress since the 1960s in terms of the type of education and experience it is providing its students, Affleck-Graves says.
“We should be proud of that. We want to give students tremendous opportunities to grow as people, to find a career, to gradually transition from a student to a life in the community. It’s expensive to do that. What we don’t want to do is decrease those experiences by decreasing tuition,” Affleck-Graves says.
Notre Dame doesn’t want to cheapen the experience or the education.
“Would you not do the new research building? Would you not do the two new dorms and stay a little overcrowded? The international opportunities we’re offering? To get those opportunities, it has a price...But we want to offer everyone a great Notre Dame experience,” Sejdinaj says.
Other reasons for tuition rising include the costs of salary and benefits for Notre Dame’s employees. “Universities are mostly people,” Sejdinaj says. “It’s important that the university remains competitive in terms of employee salaries and benefits.” Though buildings are donor-funded, the utilities, maintenance and upkeep of the buildings are additional factors influencing rising tuition and fees.
In the budgeting process, Notre Dame has a set of parameters it tries to work within, Sejdinaj says. For example, administrators try to keep tuition increases below four percent. They also don’t want students to graduate with more than a certain amount of debt, and they want to meet full need in terms of financial aid.
Financial aid is a huge part of the university’s efforts to keep college affordable. The university is committed to meeting all of students’ demonstrated financial need. According to Sejdinaj, Notre Dame first met need for all students in 2000. Notre Dame gave a total of $28 million in financial aid. For this year, the university will probably spend close to $125 million in financial aid.
This month, Notre Dame alumnus Sean Cullinan made a $20 million gift to the university to fund a new program that will support low-income families at Notre Dame. The new initiative will cover tuition and fees, room and board, books, transportation and other expenses for low-income students as well as create an enrichment program to help these students make the most of their time at Notre Dame.
“You have to take care of the people, and Notre Dame’s a family — we’re very much a family here, and I think when you go and look at the decisions that are made, that comes first...cover the people, cover financial aid. Now, what’s left?” Sejdinaj says. “When the economic downturn came, we did like a $30-35 million jump [in financial aid] in a two to three year period because our families were really feeling it, and that meant we had to cut expenses elsewhere in order to make sure we provided for our families.”
Financial aid increase has outpaced tuition increase, but there is still a problem of closing the gap between the very wealthy and those who qualify for aid. Notre Dame is working to address the financial needs of those people who do not qualify for aid, but are not wealthy enough to be fully unburdened by tuition costs.
So, is Notre Dame being as fair as possible to its students in terms of tuition and rising costs?
“If we were resting on our laurels, I would say no, but it continues to be a priority,” Sejdinaj says. “It’s like you can’t do enough...We’re always looking at how to get better and be good stewards.”
Introduction: "The Almighty Dollar: The Financial Landscape of Notre Dame" by Rich Hidy
Part 1: "The Endowment: Not Just a Pot of Gold" by Hunter Kuffel
Part 2: "Tuition" by Katie Harris
Part 3: "Faculty and Research" by Tessa Bangs