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NAICU Board Appointments for 2005-06; Earlham College President Is Named Chair

NAICU Board Appointments for 2005-06; Earlham College President Is ...

February 10, 2005


A list of the full NAICU board of directors is available online.


WASHINGTON, D.C.—The membership of the National Association of Independent Colleges and Universities (NAICU) ratified the election of 13 new members of its board of directors, and the appointment of new officers and executive committee members, on February 2 at the 2005 NAICU Annual Meeting in Washington, D.C.

Chair of the NAICU Board of Directors

Douglas C. Bennett, president of Earlham College (Ind.), has been elected chair of the NAICU Board of Directors. Vice chair of the board in 2004-05, Bennett succeeds George J. Hagerty, president of Franklin Pierce College (N.H.), who remains on the board as past chair.

Bennett has been president and a professor of politics at Earlham since 1997. From 1994 to 1997, he was vice president and chief operations officer of the American Council on Learned Societies in New York City. From 1989 to 1993, he was the vice president and provost at Reed College. Growing out of his work at Reed, Bennett helped to create the Portland Area Library System (PORTALS). During 1993-94, he served as the first executive director of PORTALS. Earlier, he was a political science professor at Temple University from 1973 to 1989. Bennett has a bachelor’s degree from Haverford College, and master’s and doctoral degrees from Yale University.

Additional New Officers of the Board

David E. Shi, president of Furman University (S.C.), has been named vice chair

Patrice Werner, president of Caldwell College (N.J.), has been named secretary

Katherine H. Will, president of Gettysburg College (Pa.) has been named treasurer.

Members of the Executive Committee

Seven other board members have been named to one-year terms as members of the board's executive committee. They work with the five officers to spearhead the development and implementation of NAICU's goals and priorities.

Daniel A. DiBiasio, President, Wilmington College (Ohio)
Chair, Student Aid Committee

Toni Larson, Executive Director, Independent Higher Education of Colorado
Chair, National Association of Independent College and University State Executives

Thomas R. Morris, President, Emory & Henry College (Va.)
Chair, Tax Policy Committee

Debra M. Murphy, President, Nichols College (Mass.)
Chair, Accountability Committee

Jon C. Strauss, President, Harvey Mudd College (Calif.)
Chair, Policy Analysis and Public Relations Committee

New NAICU Board Members

Eight new members were elected to three-year terms on the NAICU board, representing the association's national regions:

Debra M. Murphy, President, Nichols College (Mass.)
Region I (Conn., Maine, Mass., N.H., R.I., Vt.)

Thomas H. Powell, President, Mount Saint Mary’s University (Md.)
Region II (Del., D.C., Md., N.J., N.Y.)

James T. Harris III, President, Widener University (Pa.)
Region III (Ky., Ohio, Pa., W.Va.)

H. Douglas Lee, President, Stetson University (Fla.)
Region IV (Fla., Ga., N.C., S.C., Va.)

James E. Bultman, President, Hope College (Mich.)
Region V (Ill., Ind., Mich., Wis.)

Loren P. Gresham, President, Southern Nazarene University (Okla.)
Region VI (Ala., Ark., La., Miss., Okla., Tenn., Texas)

Robert A. Oden, Jr., President, Carleton College (Minn.)
Region VII (Iowa, Kan., Minn., Mo., Neb., N.D., S.D.)

Jay A. Barber, Jr., President, Warner Pacific College (Ore.)
Region VIII (Alaska, Ariz., Calif., Colo., Hawaii, Idaho, Mont., N.M., Nev., Ore., Utah, Wash., Wyo.)

Four presidents have been named to three-year terms as at-large members of the board:

Victor J. Boschini, Jr., Chancellor, Texas Christian University

R. Judson Carlberg, President, Gordon College (Mass.)

Marianne E. Inman, President, Central Methodist University (Mo.)

Ronald K. Machtley, President, Bryant University (R.I.)

One individual joins four other ex officio members of the board, and begins a three-year term:

Deborah L. Hyatt, Director of Government Relations, University of Chicago

NAICU serves as the unified national voice of independent higher education. Since 1976, the association has represented private colleges and universities on policy issues with the federal government, such as those affecting student aid, taxation, and government regulation. NAICU members enroll 85 percent of all students attending private institutions. With nearly 1,000 member institutions and associations, NAICU reflects the diversity of private, nonprofit higher education in the United States. They include traditional liberal arts colleges, major research universities, comprehensive universities, church- and faith-related institutions, historically black colleges, Hispanic-serving institutions, single-sex colleges, art institutions, two-year colleges, and schools of law, medicine, engineering, business, and other professions.


A list of the full NAICU board of directors is available online.


WASHINGTON, D.C.—The membership of the National Association of Independent Colleges and Universities (NAICU) ratified the election of 13 new members of its board of directors, and the appointment of new officers and executive committee members, on February 2 at the 2005 NAICU Annual Meeting in Washington, D.C.

Chair of the NAICU Board of Directors

Douglas C. Bennett, president of Earlham College (Ind.), has been elected chair of the NAICU Board of Directors. Vice chair of the board in 2004-05, Bennett succeeds George J. Hagerty, president of Franklin Pierce College (N.H.), who remains on the board as past chair.

Bennett has been president and a professor of politics at Earlham since 1997. From 1994 to 1997, he was vice president and chief operations officer of the American Council on Learned Societies in New York City. From 1989 to 1993, he was the vice president and provost at Reed College. Growing out of his work at Reed, Bennett helped to create the Portland Area Library System (PORTALS). During 1993-94, he served as the first executive director of PORTALS. Earlier, he was a political science professor at Temple University from 1973 to 1989. Bennett has a bachelor’s degree from Haverford College, and master’s and doctoral degrees from Yale University.

Additional New Officers of the Board

David E. Shi, president of Furman University (S.C.), has been named vice chair

Patrice Werner, president of Caldwell College (N.J.), has been named secretary

Katherine H. Will, president of Gettysburg College (Pa.) has been named treasurer.

Members of the Executive Committee

Seven other board members have been named to one-year terms as members of the board's executive committee. They work with the five officers to spearhead the development and implementation of NAICU's goals and priorities.

Daniel A. DiBiasio, President, Wilmington College (Ohio)
Chair, Student Aid Committee

Toni Larson, Executive Director, Independent Higher Education of Colorado
Chair, National Association of Independent College and University State Executives

Thomas R. Morris, President, Emory & Henry College (Va.)
Chair, Tax Policy Committee

Debra M. Murphy, President, Nichols College (Mass.)
Chair, Accountability Committee

Jon C. Strauss, President, Harvey Mudd College (Calif.)
Chair, Policy Analysis and Public Relations Committee

New NAICU Board Members

Eight new members were elected to three-year terms on the NAICU board, representing the association's national regions:

Debra M. Murphy, President, Nichols College (Mass.)
Region I (Conn., Maine, Mass., N.H., R.I., Vt.)

Thomas H. Powell, President, Mount Saint Mary’s University (Md.)
Region II (Del., D.C., Md., N.J., N.Y.)

James T. Harris III, President, Widener University (Pa.)
Region III (Ky., Ohio, Pa., W.Va.)

H. Douglas Lee, President, Stetson University (Fla.)
Region IV (Fla., Ga., N.C., S.C., Va.)

James E. Bultman, President, Hope College (Mich.)
Region V (Ill., Ind., Mich., Wis.)

Loren P. Gresham, President, Southern Nazarene University (Okla.)
Region VI (Ala., Ark., La., Miss., Okla., Tenn., Texas)

Robert A. Oden, Jr., President, Carleton College (Minn.)
Region VII (Iowa, Kan., Minn., Mo., Neb., N.D., S.D.)

Jay A. Barber, Jr., President, Warner Pacific College (Ore.)
Region VIII (Alaska, Ariz., Calif., Colo., Hawaii, Idaho, Mont., N.M., Nev., Ore., Utah, Wash., Wyo.)

Four presidents have been named to three-year terms as at-large members of the board:

Victor J. Boschini, Jr., Chancellor, Texas Christian University

R. Judson Carlberg, President, Gordon College (Mass.)

Marianne E. Inman, President, Central Methodist University (Mo.)

Ronald K. Machtley, President, Bryant University (R.I.)

One individual joins four other ex officio members of the board, and begins a three-year term:

Deborah L. Hyatt, Director of Government Relations, University of Chicago

NAICU serves as the unified national voice of independent higher education. Since 1976, the association has represented private colleges and universities on policy issues with the federal government, such as those affecting student aid, taxation, and government regulation. NAICU members enroll 85 percent of all students attending private institutions. With nearly 1,000 member institutions and associations, NAICU reflects the diversity of private, nonprofit higher education in the United States. They include traditional liberal arts colleges, major research universities, comprehensive universities, church- and faith-related institutions, historically black colleges, Hispanic-serving institutions, single-sex colleges, art institutions, two-year colleges, and schools of law, medicine, engineering, business, and other professions.

February 10, 2005

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Thomas Kean to Receive 2005 NAICU Award for Advocacy of Independent Higher Education

Thomas Kean to Receive 2005 NAICU Award for Advocacy of Independent...

January 28, 2005

WASHINGTON, D.C., Jan. 28—Thomas H. Kean, president of Drew University and former governor of New Jersey, has been selected by the National Association of Independent Colleges and Universities (NAICU) to receive its 2005 Award for Advocacy of Independent Higher Education. The award will be presented at 2:30 p.m. on Monday, January 31, at the NAICU annual meeting. The meeting will be held at the Hyatt Regency Washington on Capitol Hill.

The NAICU Advocacy Award was established in 1993 to recognize individuals who have championed the cause of independent nonprofit higher education. Whether in government, business, or philanthropy, the recipient of this award has provided leadership, established resources, or enacted policy at the national or state level to significantly assist private colleges and universities in serving their students and communities.

Kean is the first person to have received both the Advocacy Award and NAICU’s other major recognition, the Paley Award. He was selected as the Paley Award recipient in 1989, in recognition of his achievements as New Jersey’s governor.

"The influence of Tom Kean on higher education, the nation, and the world has been multi-faceted and far-reaching," said NAICU President David L. Warren. "As president of Drew University since 1990, he has—with a deft personal touch, astute political skills, and visionary leadership—shaped the university into one of the nation’s leading small liberal arts universities by stressing the primacy of teaching, the creative use of technology in the liberal arts, and the importance of international education."

Kean’s commitment to issues beyond campus and around the world is reflected in his activities while serving as president of Drew. Most notably, he served as chairman of the National Commission on Terrorist Attacks Upon the United States (the "9/11 Commission"). He also headed the American delegation to the U.N. Conference on Youth in Thailand, and served as vice chairman of the American delegation to the World Conference on Women in Beijing. Within the U.S., he served as a member of the President’s Initiative on Race, and on the National Endowment for Democracy.

Kean served two terms as governor of New Jersey from 1982 to 1990, winning his second term by the largest margin in state history. He holds a bachelor’s degree from Princeton University and a master’s degree from Columbia University Teachers College.

He and his wife, the former Deborah Bye, have twin sons, Tom and Reed, and a daughter, Alexandra. The Keans live in Bedminster, N.J.

NAICU serves as the unified national voice of independent higher education. With nearly 1,000 member institutions and associations nationwide, NAICU reflects the diversity of private, nonprofit higher education in the United States. NAICU members enroll 85 percent of all students attending private institutions. They include traditional liberal arts colleges, major research universities, church- and faith-related institutions, historically black colleges, Hispanic-serving institutions, single-sex colleges, arts institutions, two-year colleges, and schools of law, medicine, engineering, business, and other professions.

WASHINGTON, D.C., Jan. 28—Thomas H. Kean, president of Drew University and former governor of New Jersey, has been selected by the National Association of Independent Colleges and Universities (NAICU) to receive its 2005 Award for Advocacy of Independent Higher Education. The award will be presented at 2:30 p.m. on Monday, January 31, at the NAICU annual meeting. The meeting will be held at the Hyatt Regency Washington on Capitol Hill.

The NAICU Advocacy Award was established in 1993 to recognize individuals who have championed the cause of independent nonprofit higher education. Whether in government, business, or philanthropy, the recipient of this award has provided leadership, established resources, or enacted policy at the national or state level to significantly assist private colleges and universities in serving their students and communities.

Kean is the first person to have received both the Advocacy Award and NAICU’s other major recognition, the Paley Award. He was selected as the Paley Award recipient in 1989, in recognition of his achievements as New Jersey’s governor.

"The influence of Tom Kean on higher education, the nation, and the world has been multi-faceted and far-reaching," said NAICU President David L. Warren. "As president of Drew University since 1990, he has—with a deft personal touch, astute political skills, and visionary leadership—shaped the university into one of the nation’s leading small liberal arts universities by stressing the primacy of teaching, the creative use of technology in the liberal arts, and the importance of international education."

Kean’s commitment to issues beyond campus and around the world is reflected in his activities while serving as president of Drew. Most notably, he served as chairman of the National Commission on Terrorist Attacks Upon the United States (the "9/11 Commission"). He also headed the American delegation to the U.N. Conference on Youth in Thailand, and served as vice chairman of the American delegation to the World Conference on Women in Beijing. Within the U.S., he served as a member of the President’s Initiative on Race, and on the National Endowment for Democracy.

Kean served two terms as governor of New Jersey from 1982 to 1990, winning his second term by the largest margin in state history. He holds a bachelor’s degree from Princeton University and a master’s degree from Columbia University Teachers College.

He and his wife, the former Deborah Bye, have twin sons, Tom and Reed, and a daughter, Alexandra. The Keans live in Bedminster, N.J.

NAICU serves as the unified national voice of independent higher education. With nearly 1,000 member institutions and associations nationwide, NAICU reflects the diversity of private, nonprofit higher education in the United States. NAICU members enroll 85 percent of all students attending private institutions. They include traditional liberal arts colleges, major research universities, church- and faith-related institutions, historically black colleges, Hispanic-serving institutions, single-sex colleges, arts institutions, two-year colleges, and schools of law, medicine, engineering, business, and other professions.

January 28, 2005

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Robert N. Kelly Selected to Receive 2005 Paley Award for Service to Private Higher Education

Robert N. Kelly Selected to Receive 2005 Paley Award for Service to...

January 28, 2005

WASHINGTON, D.C., Jan. 28—Robert N. Kelly, executive director of the Kansas Independent College Association (KICA) from 1976 to 2004, has been selected by the National Association of Independent Colleges and Universities (NAICU) to receive the 2005 Henry Paley Memorial Award. He will receive the award from NAICU President David L. Warren on Tuesday, Feb. 2, at the NAICU annual meeting. The meeting will be held at the Hyatt Regency Washington on Capitol Hill.

Since 1985, the Paley Award has recognized an individual who, throughout his or her career, has unfailingly served the students and faculty of independent higher education. The recipient of this award has set an example for all who would seek to advance educational opportunity in the United States. The Paley Award is named for Henry Paley, president of the Commission on Independent Colleges and Universities of New York from 1975 until 1984.

“Few higher education advocates, inside or outside of the Washington Beltway, have had a more continued and profound influence on federal higher education law than Bob Kelly,” said NAICU President David L. Warren. “For 28 years, he has mastered formulas, built friendships on Capitol Hill, and negotiated regulations that have benefited private college students throughout the nation.”

In addition to heading KICA, Kelly served as the executive director of the Kansas Independent College Fund from 1995 to 2000. Kelly’s achievements during his tenure with the independent colleges and universities in Kansas are numerous.

Kelly was intimately involved in drafting the current campus-based aid formula that considers a student's unmet need, a factor that makes college choice possible for millions of low-income students. He pioneered a tax-exempt bond financing program in Kansas that has brought the students of his state less expensive, more efficient loans, and served as a model for other states.

Kelly has given his time to promote many national private higher education causes. He has been a steady presence on Capitol Hill in endless legislative battles, and was particularly effective in working with his delegation, when Bob Dole was Senate Republican leader and Nancy Kassebaum was the key Republican on the Senate education committee. He served countless hours as a NAICU negotiator in the tedious, but critically important, negotiated rulemaking process—through which detailed regulations are written with the input of the higher education community. Kelly was also a U.S. Senate appointee to the national Advisory Committee on Student Financial Assistance.

Kelly received his bachelor's degree from Occidental College, and his master's degree and doctorate from the University of Kansas. He has worked for the Kansas state legislature, served as an assistant professor at Washburn University, and worked for the Kansas State Education Commission and Kansas Board of Regents.

Kelly will be joined at the award presentation by his wife, Cindy.

NAICU serves as the unified national voice of independent higher education. With nearly 1,000 member institutions and associations nationwide, NAICU reflects the diversity of private, nonprofit higher education in the United States. NAICU members enroll 85 percent of all students attending private institutions. They include traditional liberal arts colleges, major research universities, church- and faith-related institutions, historically black colleges, Hispanic-serving institutions, single-sex colleges, art institutions, two-year colleges, and schools of law, medicine, engineering, business, and other professions.

WASHINGTON, D.C., Jan. 28—Robert N. Kelly, executive director of the Kansas Independent College Association (KICA) from 1976 to 2004, has been selected by the National Association of Independent Colleges and Universities (NAICU) to receive the 2005 Henry Paley Memorial Award. He will receive the award from NAICU President David L. Warren on Tuesday, Feb. 2, at the NAICU annual meeting. The meeting will be held at the Hyatt Regency Washington on Capitol Hill.

Since 1985, the Paley Award has recognized an individual who, throughout his or her career, has unfailingly served the students and faculty of independent higher education. The recipient of this award has set an example for all who would seek to advance educational opportunity in the United States. The Paley Award is named for Henry Paley, president of the Commission on Independent Colleges and Universities of New York from 1975 until 1984.

“Few higher education advocates, inside or outside of the Washington Beltway, have had a more continued and profound influence on federal higher education law than Bob Kelly,” said NAICU President David L. Warren. “For 28 years, he has mastered formulas, built friendships on Capitol Hill, and negotiated regulations that have benefited private college students throughout the nation.”

In addition to heading KICA, Kelly served as the executive director of the Kansas Independent College Fund from 1995 to 2000. Kelly’s achievements during his tenure with the independent colleges and universities in Kansas are numerous.

Kelly was intimately involved in drafting the current campus-based aid formula that considers a student's unmet need, a factor that makes college choice possible for millions of low-income students. He pioneered a tax-exempt bond financing program in Kansas that has brought the students of his state less expensive, more efficient loans, and served as a model for other states.

Kelly has given his time to promote many national private higher education causes. He has been a steady presence on Capitol Hill in endless legislative battles, and was particularly effective in working with his delegation, when Bob Dole was Senate Republican leader and Nancy Kassebaum was the key Republican on the Senate education committee. He served countless hours as a NAICU negotiator in the tedious, but critically important, negotiated rulemaking process—through which detailed regulations are written with the input of the higher education community. Kelly was also a U.S. Senate appointee to the national Advisory Committee on Student Financial Assistance.

Kelly received his bachelor's degree from Occidental College, and his master's degree and doctorate from the University of Kansas. He has worked for the Kansas state legislature, served as an assistant professor at Washburn University, and worked for the Kansas State Education Commission and Kansas Board of Regents.

Kelly will be joined at the award presentation by his wife, Cindy.

NAICU serves as the unified national voice of independent higher education. With nearly 1,000 member institutions and associations nationwide, NAICU reflects the diversity of private, nonprofit higher education in the United States. NAICU members enroll 85 percent of all students attending private institutions. They include traditional liberal arts colleges, major research universities, church- and faith-related institutions, historically black colleges, Hispanic-serving institutions, single-sex colleges, art institutions, two-year colleges, and schools of law, medicine, engineering, business, and other professions.

January 28, 2005

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Statement by the Student Aid Alliance on the FY 2005 Omnibus Bill and the Ongoing Erosion of Federal Student Aid

Statement by the Student Aid Alliance on the FY 2005 Omnibus Bill a...

November 24, 2004

We are deeply troubled that Congress, in approving the FY 2005 omnibus appropriations bill, voted to continue the slow erosion in the federal student aid programs. It should concern all Americans that students from low-income and working families are being asked to shoulder a larger share of the budget deficit.

Funding for key student aid programs has slipped in the past three years, while demand for assistance continues to grow. The maximum Pell Grant remains at $4,050 for the third year in a row. Work-study funding has fallen from $1 billion to $990 million in three years. LEAP, which provides matching funds to states that increase assistance to low-income students, was reduced from $68 million to $66 million.

For the first time in recent history, funding for a student aid program was eliminated. New federal capital for Perkins Loans went from $100 million to zero. No new federal Perkins capital will be available for institutions that participate in the program. These colleges will have to provide loans from their revolving funds. Ultimately, this means that students will have less access to Perkins Loans, and more will be faced with taking out private loans at higher interest rates.

These cuts could not have come at a worse time for nearly 1.3 million students in particular. Technical changes to the Pell Grant formula mean that 84,000 fewer students can receive those grants next year, as the U.S. Department of Education must update an old state tax chart that has been used for years. Another 1.2 million students will see their Pell Grants reduced. If the maximum grant had risen over the last three years, these students’ status would not be in question.

Overall funding for the Education Department is $780 million below the president’s request, $1.12 billion below the House version, and $2.3 billion below the Senate request.

The budget outlook—and the future of student aid funding—is disheartening. The Bush administration plans to squeeze non-defense, non-homeland security domestic spending in next year’s budget, and education could be cut by $5 billion over the next five years.

Our nation’s students deserve better. The federal investment in student aid is an investment in them—and in America’s future.

We are deeply troubled that Congress, in approving the FY 2005 omnibus appropriations bill, voted to continue the slow erosion in the federal student aid programs. It should concern all Americans that students from low-income and working families are being asked to shoulder a larger share of the budget deficit.

Funding for key student aid programs has slipped in the past three years, while demand for assistance continues to grow. The maximum Pell Grant remains at $4,050 for the third year in a row. Work-study funding has fallen from $1 billion to $990 million in three years. LEAP, which provides matching funds to states that increase assistance to low-income students, was reduced from $68 million to $66 million.

For the first time in recent history, funding for a student aid program was eliminated. New federal capital for Perkins Loans went from $100 million to zero. No new federal Perkins capital will be available for institutions that participate in the program. These colleges will have to provide loans from their revolving funds. Ultimately, this means that students will have less access to Perkins Loans, and more will be faced with taking out private loans at higher interest rates.

These cuts could not have come at a worse time for nearly 1.3 million students in particular. Technical changes to the Pell Grant formula mean that 84,000 fewer students can receive those grants next year, as the U.S. Department of Education must update an old state tax chart that has been used for years. Another 1.2 million students will see their Pell Grants reduced. If the maximum grant had risen over the last three years, these students’ status would not be in question.

Overall funding for the Education Department is $780 million below the president’s request, $1.12 billion below the House version, and $2.3 billion below the Senate request.

The budget outlook—and the future of student aid funding—is disheartening. The Bush administration plans to squeeze non-defense, non-homeland security domestic spending in next year’s budget, and education could be cut by $5 billion over the next five years.

Our nation’s students deserve better. The federal investment in student aid is an investment in them—and in America’s future.

November 24, 2004

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Statement by NAICU President David L. Warren on the College Board's 2004 Tuition and Student Aid Reports

Statement by NAICU President David L. Warren on the College Board's...

October 19, 2004

What This Means for Private College Students and Their Families

Every private college and university president I know empathizes with the concerns of students and their families about affording higher education. They know that the budget challenges facing institutions, and the influx of low-income students and students who are the first in their family to attend college will make it increasingly difficult to maintain the delicate balance between affordability, quality education, and access to students from all backgrounds.

Students who are considering or attending private colleges and universities should keep in mind two things about the price and value of these institutions. First, it is net tuition, not sticker price, that matters to family pocketbooks. Increases in institutionally provided aid outpaced the rate of growth in tuition by 9 percent to 6 percent in the past year, and by more than double the rate over the last 10 years.

Furthermore, the benefits—and value—of a private college education are second to none. On average, students are twice as likely to graduate in four years if they attend a private institution. Close interaction with professors in and outside of the classroom, countless opportunities to engage in campus life, and academic training that fosters leadership, creativity, and critical thinking and communication skills give students at private colleges the foundation for a better life and successful career.

Revenue and Cost Trends

Private colleges and universities, unlike their state counterparts, are heavily tuition-dependent. This revenue helps to provide institutional financial aid for low-income and working families, the continued quality of classroom instruction, opportunities for leadership and intellectual development outside of the classroom, and modern learning and living facilities for all students.

Despite the budget difficulties of recent years, private colleges and universities have kept this year's tuition increase consistent with the average over the past 10 years. Major cost drivers—insurance premiums, energy, periodicals and other educational resources, and information technology—are all increasing faster than college sticker price. College endowments and fund-raising levels have been flat in recent years, as the stock market and potential donors recover from the recession.

  • The average college endowment earned just 3 percent in the last fiscal year, according to the National Association of College and University Business Officers, following losses of 3.6 percent and 6 percent in the two previous years. Despite the small increase, an inflation rate of 2.2 percent and an average endowment payout rate of 5.4 percent meant that most institutions experienced a decline in the overall value of their endowments.
     
  • Philanthropic support of education has faltered in recent years. Gifts to higher education dropped 3 percent from 2002 to 2003, according to the most recently available data from the Giving USA Foundation. This was the second straight year of decreased giving to institutions.
     
  • Health care costs rose 12.3 percent in 2004, according to Hewitt Associates. This marks the fourth consecutive year of double-digit increases. United Educators Insurance reports that most types of insurance, such as general liability, worker’s compensation, and property, are expected to rise between 10 and 20 percent in 2004.
     
  • Periodicals and other library materials routinely increase by double-digit rates each year. In a recent report, EDUCAUSE states that the price of scholarly journals grew 257 percent from 1986 to 2002.
     
  • The cost of keeping up with innovations in information technology at private colleges and universities increased 23 percent in 2004, according to Market Data Retrieval.

Controlling Operating Costs, and Initiatives to Maintain Affordability

The idea that private colleges and universities are impervious to market forces and have little incentive to operate more efficiently is an urban legend. Private colleges and universities are using innovative cost-cutting and affordability initiatives to keep the impact of tuition increases on student out-of-pocket costs as low as possible, without cutting into academic quality.

There is no one-size-fits-all approach to cost control and affordability, because of differences in mission, student population, and fiscal resources, but that hasn’t stopped private colleges from taking innovative steps.

  • At least four private colleges and universities reduced tuition this year. The 2004-05 academic year marks the first time that private higher education has seen new institutional tuition cuts in three consecutive years.
     
  • Others have locked in the tuition rate for a student’s four- or five-year enrollment. This means that tuition remains the same each year for a student.
     
  • Several have lowered expected family contributions and replaced loans with more grants.
     
  • Others offer three-year bachelor’s degree programs, or four-year graduation and employment guarantees.
     
  • More than 240 private institutions participate in a national prepaid tuition plan (the Independent 529 Plan).

To control operating expenses, more institutions are:

  • Entering into consortial arrangements to reduce administrative and academic redundancies, and leverage their purchasing power to obtain lower costs for energy, insurance, information technology, and other services;
  • Outsourcing campus services, such as grounds and facilities maintenance, alumni relations operations, residence hall management, billing and other “back office” functions, and bookstores; and
  • Turning to environmentally friendly systems to lower energy consumption; streamlining staff; and consolidating offices and programs to enhance efficiency.

Examples of affordability, cost-saving, and consortial initiatives are posted on the NAICU web site at www.naicu.edu/news/campusinnovations.asp.

What This Means for Private College Students and Their Families

Every private college and university president I know empathizes with the concerns of students and their families about affording higher education. They know that the budget challenges facing institutions, and the influx of low-income students and students who are the first in their family to attend college will make it increasingly difficult to maintain the delicate balance between affordability, quality education, and access to students from all backgrounds.

Students who are considering or attending private colleges and universities should keep in mind two things about the price and value of these institutions. First, it is net tuition, not sticker price, that matters to family pocketbooks. Increases in institutionally provided aid outpaced the rate of growth in tuition by 9 percent to 6 percent in the past year, and by more than double the rate over the last 10 years.

Furthermore, the benefits—and value—of a private college education are second to none. On average, students are twice as likely to graduate in four years if they attend a private institution. Close interaction with professors in and outside of the classroom, countless opportunities to engage in campus life, and academic training that fosters leadership, creativity, and critical thinking and communication skills give students at private colleges the foundation for a better life and successful career.

Revenue and Cost Trends

Private colleges and universities, unlike their state counterparts, are heavily tuition-dependent. This revenue helps to provide institutional financial aid for low-income and working families, the continued quality of classroom instruction, opportunities for leadership and intellectual development outside of the classroom, and modern learning and living facilities for all students.

Despite the budget difficulties of recent years, private colleges and universities have kept this year's tuition increase consistent with the average over the past 10 years. Major cost drivers—insurance premiums, energy, periodicals and other educational resources, and information technology—are all increasing faster than college sticker price. College endowments and fund-raising levels have been flat in recent years, as the stock market and potential donors recover from the recession.

  • The average college endowment earned just 3 percent in the last fiscal year, according to the National Association of College and University Business Officers, following losses of 3.6 percent and 6 percent in the two previous years. Despite the small increase, an inflation rate of 2.2 percent and an average endowment payout rate of 5.4 percent meant that most institutions experienced a decline in the overall value of their endowments.
     
  • Philanthropic support of education has faltered in recent years. Gifts to higher education dropped 3 percent from 2002 to 2003, according to the most recently available data from the Giving USA Foundation. This was the second straight year of decreased giving to institutions.
     
  • Health care costs rose 12.3 percent in 2004, according to Hewitt Associates. This marks the fourth consecutive year of double-digit increases. United Educators Insurance reports that most types of insurance, such as general liability, worker’s compensation, and property, are expected to rise between 10 and 20 percent in 2004.
     
  • Periodicals and other library materials routinely increase by double-digit rates each year. In a recent report, EDUCAUSE states that the price of scholarly journals grew 257 percent from 1986 to 2002.
     
  • The cost of keeping up with innovations in information technology at private colleges and universities increased 23 percent in 2004, according to Market Data Retrieval.

Controlling Operating Costs, and Initiatives to Maintain Affordability

The idea that private colleges and universities are impervious to market forces and have little incentive to operate more efficiently is an urban legend. Private colleges and universities are using innovative cost-cutting and affordability initiatives to keep the impact of tuition increases on student out-of-pocket costs as low as possible, without cutting into academic quality.

There is no one-size-fits-all approach to cost control and affordability, because of differences in mission, student population, and fiscal resources, but that hasn’t stopped private colleges from taking innovative steps.

  • At least four private colleges and universities reduced tuition this year. The 2004-05 academic year marks the first time that private higher education has seen new institutional tuition cuts in three consecutive years.
     
  • Others have locked in the tuition rate for a student’s four- or five-year enrollment. This means that tuition remains the same each year for a student.
     
  • Several have lowered expected family contributions and replaced loans with more grants.
     
  • Others offer three-year bachelor’s degree programs, or four-year graduation and employment guarantees.
     
  • More than 240 private institutions participate in a national prepaid tuition plan (the Independent 529 Plan).

To control operating expenses, more institutions are:

  • Entering into consortial arrangements to reduce administrative and academic redundancies, and leverage their purchasing power to obtain lower costs for energy, insurance, information technology, and other services;
  • Outsourcing campus services, such as grounds and facilities maintenance, alumni relations operations, residence hall management, billing and other “back office” functions, and bookstores; and
  • Turning to environmentally friendly systems to lower energy consumption; streamlining staff; and consolidating offices and programs to enhance efficiency.

Examples of affordability, cost-saving, and consortial initiatives are posted on the NAICU web site at www.naicu.edu/news/campusinnovations.asp.

October 19, 2004

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About the items posted on the NAICU site: News items, features, and opinion pieces posted on this site from sources outside NAICU do not necessarily reflect the position of the association or its members. Rather, this content reflects the diversity of issues and views that are shaping American higher education.

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