Tuition to increase next year by $1,000

Biola University tuition will increase next year by $1,000.

Michelle Hong, Writer

Despite an increase in scholarship funds from the previous fiscal year, tuition rates have risen at an even higher rate with the surge of incoming students, resulting in the imbalance of aid to tuition ratio.

The scholarship budget has marginally increased from 19.44 percent to 20.20 percent, calculating to a 0.76 percent difference.

Tuition increased by $1,000

On the contrary, approval for the 3.66 percent increase from last year’s tuition rates was granted by the board of trustees along with the President’s Administrative Council (PAC) in January at a board retreat. Previously priced at $28,852, the cost for education as an undergraduate has risen to $29,908–– a $1,056 increase from what student’s were paying last year.

Biola strives for affordability

“It would be difficult for me to guarantee that we’d ever be able to lower tuition, but I do believe that we’re going to find other ways to make it more affordable for students to come here,” said Michael Pierce, vice president of business and financial affairs.

Greg Vaughan, vice president for enrollment management, said that being more affordable does not necessarily mean reducing tuition.

“Affordability does not mean every student, no matter what their circumstance, can come to Biola,” Vaughan said. “If inflation is at 4 percent and we have tuition going up at 3.66 percent, did we come more affordable? Yes we did.”

Although earning a degree at Biola is arguably “affordable,” the board is focusing on making more scholarships available to students.

Connection between tuition, scholarships and students

According to the university operating budget, the majority of scholarship dollars come from tuition. When tuition goes up, scholarship rates follow suit because of the overall increase in revenue.

However, a bigger scholarship budget does not carry over to a bigger amount of scholarship per individual. Vaughan said that, because of the growing enrollment, more students are subject to receive financial aid. The 0.76 percent increase in scholarship funds does not inflate the dollar amount of individual scholarships, but rather is dispersed to the surplus of students coming in.

Vaughan acknowledged the inconsistent interpretations of the statistics.

“Although the scholarship pool went up, students don’t feel that because the student number increases,” said Vaughan.

In an attempt to alleviate the financial constraints of an education that students must deal with, a task force managed by Pierce has been commissioned to target the issue of college affordability in the midst of the rising costs for an education.

Operational budget affects scholarships

In the past, operational and maintenance costs were cut in order for additional students to benefit from additional scholarship money. According to the operating budget report produced annually by the board, funding for maintenance and operations has decreased for the past six fiscal years.

“The bigger scholarship pool was really accomplished by cutting the operational budget, by asking departments to cut their costs, but you can only do that for so long until it tampers with the quality of the institution,” Vaughan said.

Stating that the operational budget is likely to grow next year, Pierce said he and the task force are looking at a myriad of other proposed solutions.

Endowment funds scholarships

A front-runner of the proposals is to launch a major fundraising campaign to increase the university’s endowment, according to Pierce. The endowment serves as the university’s “savings account” that reaps interest. The “savings account,” also known as the principle, is not spent; rather, the interest that is accumulated throughout the year goes to endowed scholarships to students.

“Every year, we don’t touch the principle, but the money we make through the investments is what we give out in the form of endowed scholarships,” Vaughn said. “We can count on the interest to get us at least five percent.”

Fundraising an option to increase endowment

Pierce said that, although the proposal is not set into stone, a plan is in the works to model a campaign off of the same efforts of Baylor University. Baylor embarked on a massive 10 year campaign to raise $2 billion in endowment and successfully reached the $1 billion mark in May 2007.

Dennis Prescott, vice president of university development for Baylor, stated in an interview for Baylor’s university newspaper that, as they increase the school endowment, more money will be available to the most academically talented students, as well as those with financial need.

“We are hoping to have a fundraising campaign like Baylor to raise a huge number for our endowment,” Pierce said.

“What is definitely in our plans for the future is to make a major effort to increase the endowment, and once that occurs, then the interest that those investments make can go to the students every year,” Vaughan said.

Surplus helps fund endowment

According to Vaughan, endowment comes exclusively from donor contributions, estates and year end surplus.

Funds from estates provide revenue for the university endowment. Staff members of the advancement division overseen by Adam Morris meet with families to assist them in estate planning.

“Through these meetings, we can estimate that there is over $100 million that has been assigned to Biola in people’s wills,” Vaughan said.

The board of trustees has also mandated that 50 percent of surplus must go directly into the endowment as reported in the 2004 Western Association of Schools and Colleges report. Vaughan said the endowment consists of two sections; the scholarship endowment constitutes a little less than the general endowment, and the ultimate goal for a larger endowment is to provide more endowed scholarships as opposed to scholarships coming directly from tuition.

“Our price will continue to grow, but we are working towards managing a discount rate,” Pierce said.

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