The letter went out in February 2013. Signed by Rev. John Jenkins, CSC, it informed the parents of Notre Dame students that costs were going up again. Even though it pointed out that Notre Dame had kept the annual increase in student charges at 4 percent for the past four years — matching the lowest growth in half a century — the stark numbers were stunning.
The 2013-14 budget set undergraduate tuition at $44,605. Add in the average cost of room and board ($12,512) and you’re looking at $57,117 per year. Multiply that by four.
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And if you really want to torment yourself, calculate the cost of increasingly important graduate, medical or professional degrees. Or just compute those additional 4 percent increases till graduation and consider the employment prospects for your son or daughter (who is probably not the only child you are trying to usher toward independence).
No wonder the cost of a college education has become a hot topic for families and financial institutions, business reporters, the government and the people who run the nation’s colleges and universities. Notre Dame’s leaders acknowledge that affordability is perhaps the most pressing issue in higher education today. But Notre Dame is an institution that has long been undergirded by a conservative fiscal approach and that has benefited by generous benefactions and wise investment policies.
Important financial indicators suggest that health. Notre Dame’s $7 billion endowment is the nation’s 13th largest. The University recently completed a successful fundraising campaign that brought in more than $2 billion, and externally sponsored research programming topped $100 million for the first time in a fiscal year. And the physical plant — those 143 buildings (and counting) on 1,250 acres with a total replacement value of $3.3 billion — is just the outward sign of a secure, apparently thriving, international enterprise.
The trouble is the escalating cost of doing business. With an annual operating budget of roughly $1 billion, it costs about $2.7 million to keep the place humming — every day. More than a third of that is applied toward “instruction,” with about 20 percent going to financial aid, 12 percent to research and another third in the “all other” category — student services, public services, academic and institutional support.
Notre Dame is an ambitious, up-and-coming, first-class institution. It is striving, say University budget officers, to compete with the best schools in America; to provide its students with the best faculty, facilities, technology and educational opportunities; to expand its horizons globally; and to equip and support faculty and staff at a level commensurate with its aspirations. None of this comes cheap.
But when you speak with those wrestling to get revenues to match expenses, they will talk, too, about government regulations and compliance requirements, insurance and medical benefits for the University’s 1,300 faculty members and 4,000 employees — and the number of employees it now takes to staff human resources or the investment operation or to handle nettlesome legal issues, thickening IRS codebooks or proliferating environmental guidelines. It’s not just about school anymore.
Still, tuition supplies 42 percent of the University’s yearly revenues, as opposed to 33 percent for private schools in the 62-member Association of American Universities (AAU). Research generates about a quarter of the annual income for AAU schools, but less than 10 percent at Notre Dame. On the other hand, Notre Dame’s income from endowment and private gifts outstrips the AAU average.
Tuition sticker shock is made slightly more palatable, however, by the impressive strides Notre Dame has made in its financial aid offerings. In 1990 Notre Dame awarded $5 million in financial aid to students; in 2014 that figure will reach $115 million (excluding athletic grants-in-aid). Almost half of all undergraduates receive some form of gift aid from the University. This past fall the average amount awarded to freshmen who demonstrated financial need was $28,600. About three-fourths of the undergraduates receive some form of financial aid, from scholarships, loans, ROTC awards and athletic grants-in-aid. Also, 40 percent of the undergrads have campus jobs.
Admission to Notre Dame is “need-blind”; students are admitted on the basis of their academic and personal merits, not their financial circumstances. And since 1999 the University — determined to have an economically diverse student body — has been able to meet the full demonstrated need of its undergraduate students. That need, of course, is determined by formulae that measure a family’s financial situation and will invariably include loans. Notre Dame’s undergrads leave campus with an average debt of about $30,200; the average debt burden among graduates at other four-year private schools is $28,000.
College has always been expensive, but the forces gathering these days are unprecedented. And those wondering about investing in a Notre Dame education have much to consider — from future earnings to the alumni network awaiting them, from the whole-person educational experience on campus to the international learning opportunities, from lifestyle amenities to the value of a Notre Dame degree. A survey of rankings shows that Notre Dame is squarely in line with peer institutions in terms of cost and is well ahead of the curve in the recent “return on investment” studies that have become popular as the cost of higher education has been more closely scrutinized.
Those questioning whether or not a Notre Dame degree is worth the cost might also look here for the answer: The number of applicants for next fall’s freshman class was an all-time high.
Kerry Temple is the editor of this magazine.