Feb 25, 2009 10:59 am US/Central
Northwestern Plans Tuition Hike, Budget Cuts
University Will Also Increase Scholarship Funds By 10 Percent To $86 Million
EVANSTON, Ill. (Sun-Times Media Wire) ―
Though Northwestern University President Henry Bienen believes the financial plan developed for the university will enable it to thrive in spite of "significant financial challenges," there will "be a need for sacrifices," he told the university Wednesday.
In a letter to the NU community, Bienen said, "Operating expenses across the university must be reduced in the coming year in order to provide needed funds for faculty and staff salaries, and increases in financial aid for students."
That includes a requirement for all academic and administrative departments to reduce operating expenses (other than salaries) by 3 percent in the coming year. These areas normally receive a 2 percent increase annually, so the reduction will essentially mean a 5 percent cut in operating expenses for next year, Bienen said.
His letter was released by the university Wednesday morning.
"Like all institutions," he said, "Northwestern faces significant financial challenges as a result of the worldwide recession now under way."
Undergraduate tuition/room and board will increase by 3.6 percent for 2009-10, but Bienen noted the university will also increase the amount of scholarship funds by 10 percent to $86 million. He said NU is keeping its tuition increase "to the smallest percentage in more than 40 years" while increasing financial aid "significantly."
Undergradute tuition for the 2008-2009 school year is $36,756, according to the university's Web site. The increase would raise tuition to $38,079.
Staff will get salary increases in the next year, but they will be "modest, selective" increases, Bienen said. The school will also reduce capital expenditures, including delaying several large construction projects totaling about $90 million.
The school will also hold down the number of new staff positions, but Bienen emphasized, "we are not planning any university-wide personnel reductions; however, personnel reductions may be necessary in some areas, such as those supported by external funds that may no longer be available."
Bienen said the school's endowment, which reached a high of $7.4 billion in April 2008, now stands at approximately $5.6 billion, a 24 percent decline.
"There are no signs of a quick recovery; indeed, it is likely that our endowment will decline even more." He said the fact that Northwestern is less dependent than many schools on its endowment for funding day-to-day operating expenses "has actually made things more manageable."
Bienen said that while applications for admission are up in almost all undergrad, graduate and professional schools, "That isn't likely to translate into additional tuition revenue. We simply do not have the capacity in most of our programs to add students, nor do we want to do so, as it would change the nature of a Northwestern education."
(Source: Sun-Times Media Wire © Chicago Sun-Times 2009. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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