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Date: January 25, 1999
Princeton Increases Student Fees by Lowest Percentage in Three Decades
Budget Includes Further Improvements in Financial Aid
PRINCETON, NJ -- The Trustees of Princeton University have adopted an operating budget that increases student fees for the 1999-2000 academic year by 3.5 percent, a drop from last year's 3.7 percent increase and the lowest percentage increase in more than 30 years. The $614 million budget is projected to be in balance.
The trustees acted January 23 on budget recommendations prepared by the University's Priorities Committee -- a group of faculty, students and staff -- and approved by the University president. The new budget continues the University's commitment to align increases in fees with the rate of growth in family income. This is the second year of a financial aid initiative in which Princeton is reducing or eliminating student loan requirements for families from lower- and middle-income groups, replacing the loans with additional grants. Princeton also is reducing the amount it expects a family to pay for students on financial aid by removing or reducing the contribution expected from home equity in its financial aid calculations. Princeton began phasing in these new policies with this year's freshman class; the initiative is expected to cost $6 million per year by the time it has been applied to all four undergraduate classes in fiscal year 2002.
Princeton's undergraduate charges will increase to $31,599 next year. Tuition will be $24,630, an increase of 3.4 percent; the room charge will be $3,262, an increase of 6 percent; and board charges will be $3,707, a 2 percent increase.
Graduate tuition also will be $24,630; room and board charges will vary according to students' residential and dining plans, but will increase by 3.4 percent. However, $125,000 has been added to the budget for graduate student stipends to offset the increase in room and rental charges; the average stipend should increase by an amount sufficient to cover higher living costs.
The trustees also approved an additional enhancement to Princeton's financial aid program. Princeton's policy has been to split the benefits of an outside scholarship with a student: i.e., roughly half of outside scholarship funds go to reduce a student's self-help (loan or job expectations), while the rest replace Princeton's own grant awards. The new policy will mean that, beginning with the Class of 2003, 100 percent of an outside scholarship will go to replace self-help until the student no longer has a loan or job; only at that point will outside awards begin to replace Princeton grants. This change in policy is expected to cost approximately $75,000 per class per year.
The introduction of new financial aid policies in January 1998 came too late to influence the applicant pool of this year's freshman class, but it did significantly affect enrollment decisions. Compared to the previous class, 86 more aid students enrolled. Of admitted students who required financial aid, 66 percent chose to come to Princeton, as opposed to 60 percent the year before. The effect was sufficient to restore the percentage of students on aid in the entering class to Princeton's traditional level of 43 percent after declines in the previous two years.
Also, beginning next year, financial aid for graduate students will be strengthened with $140,000 allocated for the Presidential Fellows Program, which provides fellowship support for women in the sciences and engineering and underrepresented minorities in all fields.
Among other initiatives approved in the 1999-2000 budget are: additional funds for Library acquisitions and the popular Freshman Seminars Program; funds to staff and provide program support for the Frist Campus Center, which is expected to open in the summer of 2002; support for dance instruction in the Program in Theatre and Dance; and funds for the continuing education program coordinated by the Office of Community and State Affairs, for the University-wide celebration commemorating the birthday of Dr. Martin Luther King Jr., and for the activities of the Office of Government Affairs in Washington, D.C. Together, these initiatives will add $385,000 to the operating budget.
In formulating their recommendations, the Priorities Committee took steps to rectify a projected deficit of approximately $3.2 million for the 1999-2000 fiscal year, caused by last year's enhancements to the financial aid program, as well as rising health care costs and expenses associated with running new facilities. To achieve a balanced budget, the committee banked on expected success in achieving administrative savings goals and in adopting a one-year change to the University's endowment spending rule. The administrative savings will derive from the last phase of University-wide budget cuts instituted in 1995-96, as well as from the first in a series of administrative reviews of individual units, which has focused on the Facilities Department.
The trustees approved a one-time adjustment in the parameters of the spending rule that increased the base amount of spending by approximately one-half of one percentage point while simultaneously reducing the annual growth increment by a similar fraction. This rebalancing of the rule will allow next year's operating budget base to grow by approximately $13.6 million. Of this, $10.8 million would be allocated immediately for major maintenance and renovation. The remaining $2.8 million would eventually be used for these purposes, but in the short run will help address the deficit.