About Ellen McCulloch-Lovell
Remarks to Vermont Higher Education Council and members of the Vermont Congressional Delegation staff (March 30, 2010)
Our Vermont Congressional staff gave us college presidents some good questions about accessibility and affordability of higher education to sink our teeth into. We each represent institutions that exist to serve students: to develop their abilities to think, to do research, and to develop habits of learning, self-discipline, a sense of vocation and skills that will help them thrive in a changing society and economy. As both private and public college, and the University of Vermont, we also exist to add to the storehouse of knowledge and to enrich the state with innovation and by preparing engaged citizens.
My brief remarks are to frame our discussion. We are indeed partners in giving young people opportunities; at the same time, we are responsible for sustaining institutions of learning. We all know the cost of a degree has gone up for 30 years and parents, the public, legislators, and the press are asking questions about the value of a college degree - especially when students are burdened by loans that sometimes limit their choices of vocation, such as to teach or work in the nonprofit sector (which comprises 10% of employment.) Often we hear how the cost increases of tuition each year has exceeds the
Consumer Price Index. One reason is that higher education costs are driven by a higher percentage of those that are subject to inflation and largely out of our control.
To put costs in perspective, the Commonfund Institute publishes the Higher Education Price Index, or HEPI. An historical comparison of HEPI to CPI from 1961 to 2009 shows that HEPI is consistently higher that CPI, by between two to four percentage points. Why? HEPI weighs the main elements of our costs: salaries, benefits, supplies and materials, utilities and miscellaneous services. Looked at over time, HEPI shows volatility: a 14.2% increase in utilities in 2008, now down as costs have moderated. Benefits, which include health insurance for all employees, were consistently higher between 2002-2009. Somewhere between 60-75% of any college's costs are personnel-related.
The point is that our particular "basket of costs" is subject to many forces, many beyond our immediate control. We all work hard to control salaries and benefits, often relying on our mission-driven employees to make sacrifices. And we are all active in energy conserving measures. When you look nationally, it is true that some institutions allowed their administrative salaries to rise and went on building sprees - not only to better serve students but to enhance their reputations and compete with each other. In frugal Vermont, my guess is that we have largely avoided that temptation.
This year we all suffered from the Great Recession. We lost up to 30% of the value of our endowments; missed fundraising goals as donors gave less or not at all; admitted students who couldn't pay and awarded them more financial aid out of our institutional resources.
Some Vermont institutions had to lay off employees or freeze hiring. None received any direct support from the American Recovery and Revitalization Act (except Marlboro College, which received $50,000 from the National Endowment for the Arts to support a design project that benefits the town of Brattleboro.) Our Governor and General Assembly could have used stimulus money for higher education but instead chose to use it to fill budget gaps, perhaps assuring level funding for public institutions and VSAC.
This year, fiscal 2010, tuition, fees, room and board went up again but at a lower rate nationally: 4% for privates and 6.5% for public institutions, as state funding continued to be cut in most places.
All that said, the beauty of the American system is its diversity - in goals, offerings, cultures and costs. When you look at where most students attend, college is affordable. Community College of Vermont does cite a gap for low-income, working students. Using only data from the Vermont private colleges from 2005-6, we put over $101 million into financial aid, through money we raise every year - that far exceeds federal aid received by students. We do it through direct grants, endowed scholarships,and through reducing the price by discounting our tuition, in other words, through lost revenue to our colleges. I am sure the public institutions here could tell the same story, even about the private fundraising they must conduct to survive. Even at Marlboro, very small and relatively high-priced, a worthy student can attend for $10,000 a year. Thirty percent of our students are eligible for Pell grants, that is, their family incomes are $40,000 or below. The average financial aid award is $19,000; 80% of students receive financial aid. Again, we can all tell the same story - at Sterling College or at UVM. Americans have more access to higher education than in any other country in the world.
The other difficult factor is cost of living - whether they live on or off campus, students still need housing, food, books, and transportation. All those costs are also subject to inflation beyond their control. Another factor I must mention is that we are highly regulated: 101 new regulations in the recent federal Higher Education Act, covering federal aid, foreign students, how we conduct research, student health and safety and numerous reporting requirements. To comply costs us money.
Costs go up as we offer more support for students to succeed and raise our graduation rates. We offer academic advising, tutoring, health services, sports, study abroad and an array of activities to address the whole, healthy learner. Students come to us eager, with potential, but not always prepared for college-level work.
Staying up with technology and training our employees are increasing pressures.
Most of us pay property taxes: over $1.7 million each year from the private colleges. All of us serve our communities, with contributed services, student internships, free events, low-cost facilities, and community education programs.
We educate citizens of Vermont and citizens of the world, students who may have eight to ten jobs before they are 35 years old; people who will not just get jobs, but will create jobs; young people who will safe-guard our democracy due to their abilities to think, analyze, criticize and lead.
When we look at value, access and cost, we have to remember that powerful fact that in 2008 the average family income with a Bachelors degree was $101,000; the average family income for a high school graduate is $49,000.
One of our best ideas to control costs is to work together, in consortium, to save on spending as well as to enrich programs for our students. We must find ways to create a pipeline to college, reaching students as young as the 6th grade. Research shows that students decide they will go to college around 7th grade; they decide not to go in the final two years of high school. Vermont ranks 6th in graduating students from high school; we rank 26th in getting them through college.
We all want to improve retention and persistence so that students who aspire to a college education may gain their degrees and the preparation for thriving in a rapidly changing world.