Amid the growing conversation of college costs across America, the inevitable burst of the college bubble and the catastrophe it will cause, it seemed fitting to dive into the depths of North Central’s tuition and financial reports to see just how the small liberal arts college is doing, where the money is flowing and why it seems to get more expensive every year. The College discloses a complete list of annual costs on their website, which currently states a full-time undergraduate student living on campus can expect to pay $48,000.
This pricing does not include, but does note, additional costs like textbooks, which the college estimates at $1,200 per year. With a few odds and ends purchases thrown in, the average student will incur $50,000 in costs per year at North Central. And it continues to rise.
Students received an email from President Troy Hammond on March 23, informing them of “a 3 percent increase in tuition for the 2018-2019 academic year. This equals the smallest percentage tuition increase in decades.” Tuition next year will be $38,696, and with the increase in standard room and board rates from $10,650 to $11,019, cost of books and other academic purchases, students will easily surpass the fifty-grand benchmark. It’s a daunting number, and confusing, too, especially when one looks back just 10 years.
The 2008-09 academic year saw full-time Cardinals charged a grand total of $34,155; that’s $4,000 less than what tuition alone costs today, as shown in the College’s public financial statements. Now, cost of attendance doesn’t simply rise on its own. A bevy of factors, some beyond control, influence a college’s decision -making in regard to their costs, as Hammond explained.
“The costs of running the institution, providing the same opportunities and services, the same faculty and classrooms, that goes up every year… cost of facilities, water, electricity, it goes up every year and we couldn’t continue to provide all that if the revenues aren’t growing as the costs go,” said Hammond.
Hammond is accurate with this statement; the College’s public financial statements show a $3.5 million total increase under expenses, from $73,360,405 to $76,837,965. It’s also important to note that though North Central’s tuition continues to rise, the amount of financial aid awarded to students increases as well.
Indeed, North Central’s total financial aid amounted to just under 50 percent of their total charged tuition fees ($46,834,680 of $94,250,512) and has been going back several years. This is a proud fact of the College’s service; they acknowledge their expensive costs and act to assist students in paying it. Hammond also stressed how the College was working to help beyond offering financial aid:
“One of the planks of our strategic plan is being efficient. There’s staff working all the time figuring out how to provide better service at less cost. However, that always translates into modest tuition increases as well. I can tell you the tuition increase we’ve had for the last two to three years has been the smallest on a percentage basis since the 1960s.”
No doubt there are committed individuals working toward the goal the president described. The latter end of his statement is more intriguing, however. The quote “smallest on a percentage basis” is careful wording. Between the 2014-15 and 2015-16 year, tuition increased by $1,191 according to information provided by the College. This equaled a 3.5 percent increase, undoubtedly touted at the time as “the smallest percentage increase in decades.”
The next year, another 3.5 percent increase came along, but this time the dollar figure was $1,233. See how that works? As the total tuition number grows, the percentage amount will rise, despite being the same percent. In this way, the College will be able to maintain record-low percentage increases while still raising tuition by the same amount, if not more, each year.
Where the College drops money, they make it up. Charges to room, board and tuition seem to follow an inverse flow, ensuring that the total amount changed year to year remains relatively the same, which by the way, it has (total increase the past three years have been $1,485, $1,500 and $1,389). So, while tuition may be fancifully phrased as rising by record low amounts, in actuality, students are having their total costs raised by the same amount year to year.
One way the College is not directing its financial resources is toward faculty. While there have been numerous new professors brought on board in recent years, highlighting the expanding academic offerings North Central will have in the future, there’s an ugly reality regarding compensation. When asked about North Central’s faculty and staff pay, Maryellen Skerik, the vice president for finance, discussed the College’s process and mindset.
“The College maintains a compensation program designed to attract, retain and reward the best faculty and staff to support student learning and success. Initial faculty salaries, promotion increments and long-term merit increments are set at levels to facilitate maintaining competitive salaries within the market,” said Skerik.
Its cookie-cutter nature aside, Skerik’s statement appears to be directly contradicted by data comparisons of North Central with national college averages. According to Chronicle Data, a database that compiles faculty and staff pay from the U.S. Department of Education, North Central’s average salary pay for full-time professors is approximately $27,000 below the national private institution average.
Even within Illinois alone, North Central is still approximately $23,000 below average and has maintained that gap for more than a decade. Based on this, North Central faculty are paid approximately 22 percent below the national market average, which hardly seems competitive. The gap shrinks when comparing associate and assistant professors, but the College still falls below average. This comparison holds true with men and women, showing an institutional failure to compensate adequately. As well, the College shows a consistent pay gap between male and female professors, with men paid $5,805 more on average than their women colleagues in 2016. Interestingly, Skerik also commented on the pay of upper-level administration, namely the president and his cabinet.
“Wages for administrative staff, inclusive of the president and his cabinet are reviewed on a regular basis to ensure market competitiveness,” said Skerik.
Now, this statement appears to hold water. Per North Central’s own IRS 990 filings for 2017, Hammond earned $526,850, made up by his base compensation ($307,890), bonus and incentive pay ($70,000), other reportable compensation ($18,000), retirement and deferred compensation ($22,525) and nontaxable benefits ($108,435). In comparison, the Cleveland Federal Reserve reports the average national pay of private college presidents, including bonus pay, is $377,261. With the same parameters, base and bonus pay, Hammond makes $377,890, a few hundred dollars above average. So, in a way, Skerik is right; there is market competitiveness in North Central’s compensation. Our president is paid above market average. Our faculty? Not even close.
There isn’t a grand conspiracy unfolding here. There is no Cardinal Gate, no money-laundering scheme. What we have is what colleges across the nation have: a costs problem that is quickly coming to a head. How North Central plans to respond, how the College will work to help students with affording their education, that’s what students are looking to find out.
In 2007, the housing bubble burst and sank America into an economic recession second only to 1929. For decades, the college bubble has been growing, threatening to burst under the weight of rising tuition and subsequent student debt. Is North Central part of this inevitable burst or fighting against it? As of now, with carefully worded emails, moderate tuition increases and questionable spending habits, the former, unfortunately, appears more likely.
