Tuition hike highest in Ivy League

The 4.9 percent tuition rate hike recently approved by the University Board of Trustees represents the highest increase in the Ivy League. And in light of the latest tuition raise, Penn is now reviewing what changes to financial aid will be necessary, but have not made any hard plans to accommodate the jump. The Trustees decided to raise the cost of a Penn education to $34,614 at an executive session last Thursday. Cornell University's tuition will go up by the second highest proportion among the Ivies, increasing 4.8 percent for the next school year. Outside of the Ancient Eight, however, Stanford and Northwestern universities both saw bigger increases than Penn, raising rates 5.4 percent and 5 percent, respectively. But Penn administrators are downplaying the hike, saying that the University's average annual increase is right in the middle of its peer group. "I think that as [Vice President for Budget and Management Analysis] Mike Masch's presentation [to the Trustees] pointed out, if you look at a three or four year average, Penn is right in the ballpark," Director of Financial Aid Bill Schilling said. But officials have said that because financial aid is readjusted every year, students receiving aid won't notice the difference. "I don't think that the hike in itself is going to have an impact," Schilling said. "Our aid program is designed to make it affordable." Vice President for Investment Craig Carnaroli, while warning against raising tuition rates "sky-high," said that the hike is justified by the numerous large projects the University is currently is tackling. "The University has made several investments, and all of this has a price tag to it," said Carnaroli. Financial aid may offset the recent increase for some. But student aid receives over 90 percent of its funding from the non-restricted operating budget, which relies heavily on student charges itself. Carnaroli said that the University is considering ways of dealing with the financial burden of tuition, including expanding the eligibility requirements for aid to include more students. "We're worried about everybody," Carnaroli said. "We are basically trying to expand and soften the definition for eligibility requirements." However, the increasing cost of a Penn education may affect the University's matriculation rate -- and this concern is compounded by the recent massive expansions of undergraduate financial aid at Harvard and Princeton universities. "It's very hard to compete with Harvard, Princeton and Yale because of their large endowments," Schilling said. Carnaroli agreed that this makes Penn's competition, in terms of financial aid packages, difficult. "We're still over 90 percent [funding financial aid] off of the operating budget, as opposed to a place like Princeton, that funds it all off of endowment," he said. And Masch said that Penn must improve its endowment's performance if it wants to stay in the ballpark of the Princeton and Harvard aid packages. "The only way that Penn can compete with Harvard and Princeton is... in the long run, increasing our endowment so that we can match that kind of financial aid without it coming out of academics and student life," Masch said. Schilling did qualify these fears somewhat, saying that most students are interested in the quality of the education as much as price. "Obviously, students will be looking at the net hike itself, as well as at the institution," Schilling said. In February, Princeton took the unprecedented move of cutting all loan requirements for undergraduate aid, which was followed two weeks later by Harvard's large expansion of its aid packages. Currently, Harvard's endowment stands at $19 billion and Princeton's at $8 billion. Both schools posted tremendous gains on their endowment in Fiscal Year 2000 after seeing massive payoffs on investments in the technology sector. But Penn's endowment -- which has traditionally maintained a value bias -- posted a 1.8 percent loss in the same period and closed the last fiscal year at about $3.2 billion.