'Parenting' the University budget: A reform to the process of tuition hikes

Across the United States, business owners observe rising costs and ask "Why?" In the confines of academia, where recessions are studied more than felt, administrators look at unbridled spending and ask "Why not?"

Each fall, the Priorities Committee, a group of sixteen faculty, students and administrators, analyzes Princeton's budget and recommends increases in discretionary spending. Its resources stem largely from tuition payments, putting members in an interesting bind. Absent meaningful increases in tuition receipts, their budget priorities remain unfulfilled.

Not surprisingly, then, this year's PriCom proposed raising undergraduate fees by nearly $1,600, which would add over $6,000 to the price of a Princeton diploma. Contrast this five percent rise with last year's rate of inflation, approximately one percent. Does anyone think that the undergraduate experience is getting five percent better every year?

The business of tuition management is fairly mysterious. During the boom of the late 1990s, previous Priorities Committees made a point of reducing the rate of tuition increases. Presently, in the midst of a recession and warnings of deflation by the Fed, the Committee has substantially upped tuition costs. The logic escapes me. In times of abundance, less is expected from the parental coffers. But during what many economists have identified as the most dangerous economic crisis since World War II, parents are being asked to pay an additional $1,600 after-tax per year.

Of course, with every spike in tuition comes an array of excuses and caveats, some more compelling than others. Provost Gutmann pointed out in Monday's Prince that current fee increases are below the national average for tuition hikes. This is, for starters, hugely misleading. Public colleges and universities may be raising fees at higher rates than Princeton, but their fees are significantly smaller to begin with. If the full cost of Princeton's tuition were in the $10,000 range, as it is with Berkeley, the hike would be easier to swallow. Furthermore, pointing out that tuition costs have been augmented across-the-board at private institutions — the administration's classic "everyone's doing it" fall-back — is a painful reminder of recent investigations by the Justice Department suggesting that Ivy League universities function as a monopoly, calibrating their tuition hikes to avoid price wars that might bring down costs.

PriCom members are also quick to note that aggressive financial aid packages will offset hardships resulting from higher tuition costs. This is a fair point, though just as it serves to allay concerns about downtrodden families, it should highlight the degree to which parents receiving no financial assistance will shoulder the burden of forthcoming increases. It is also a reminder that the general effect of financial aid programs is to transfer wealth from one set of families to another. Although it's not fashionable to express dismay about "hardships" confronted by upper-middle class families, paying $160,000 over four years for one child to attend college is probably not without its difficulties.

And this whole discussion has barely touched on the mystical role of the University's $8 billion ocean of an endowment, which the Trustees insist on releasing in small droplets, no matter the conditions confronting families. (As a friend recently remarked, perhaps the Trustees are saving the endowment "for the rainiest day ever.")

In sum, PriCom fails to consider the priorities of the one group that provides it with the millions of dollars comprising much of its discretionary budget: parents.

A simple reform is needed: at least one Princeton parent whose child receives no financial assistance from the University should serve on the committee. A parent elected by his/her peers would then have the opportunity to voice the concerns of all families required to pay full tuition. The tradition of excluding the largest financial stakeholders from determining the size of the University's budget should end by the next fiscal year.

If my experience on PriCom is instructive, then the presence of just one parent would be remarkable. The hundreds of millions of dollars (literally) earmarked for construction efforts over the next decade would be questioned immediately. The longterm prospects of a new "Health and Wellness Center" for activities like yoga would be thrown out the window. The faculty salary pool — which was enlarged this year, despite suggestions in last year's Committee report to the contrary — would receive heightened scrutiny from parents, who might be reluctant to award bonuses while many Americans experience the layoffs and pay cuts typical of a down economy. (The current system holds students responsible for questioning publicly the salaries of their professors and leaves faculty members responsible for restraining the growth of their salary pools.)

Fair-minded critics concerned with tuition policy are caught in a difficult situation: disciplining the budget requires the support of dozens of people and several different committees and boards, which makes criticism of the "administration" unproductive. That's the nature of bureaucracies: disperse accountability to the point that none exists. Restructuring PriCom to include a key stakeholder in the fiscal decision-making process would bring fresh scrutiny to University spending policies.

Brad Simmons is a politics major from San Jose, Calif.