Princeton, Cornell increase tuition despite endowment growth

In keeping with the national trend, Princeton and Cornell universities recently announced increases in tuition for the 2004-05 academic year.

Princeton's tuition and room and board rates are increasing 4.5 percent, with Cornell announcing a 4.8 percent rise in the endowed tuition, which is not subsidized by the state. Both increases were consistent with the previous year's tuition hike.

Penn has not yet announced its tuition for the upcoming year.

However, both schools remain well below the nationwide average for tuition increases. The College Board announced that tuition and fees in 2003-04 rose an average of 6 percent for four-year private institutions and an average of 14.1 percent for four-year public institutions.

Princeton's undergraduate expenses next year will be $38,297, including tuition and room and board. This is the "lowest among our peer institutions," according to Patricia Allen, a spokeswoman for the university.

Princeton's tuition increase comes on the heels of a successful investment year where the university registered a reported 8 percent in investment gains on its endowment.

"It was a good year for us," Allen said. As of June 30, 2003, the university reported an endowment of $8.7 billion.

The tuition hike was attributed to the overall costs of operating the university, the downturn in the economy and rising utility prices. Princeton's financial aid program also contributed to the rising tuition costs.

"Financial aid is among the fastest growing components of our budget as we seek to increase the economic diversity of the student body," Allen said. "In tandem with the tuition increase, we did increase the budget for financial aid so that those receiving aid will not feel the impact of the tuition increase in any way."

Fifty-two percent of the Princeton Class of 2007 receives financial aid. The average scholarship for a student receiving aid was nearly $24,000 in 2003-04 with some receiving as much as $35,000.

"We have undoubtedly the best financial aid program in the country," Allen said.

In 2001, Princeton replaced student loans in the financial aid packages with grants that do not have to be repaid.

Cornell's tuition increase also reflected its financial aid policies. "An important aspect of our tuition increase is that we practice need-blind admissions," said Linda Grace-Kobas, director of Cornell News Service. "We will reflect the rising tuition in our financial aid packages because people receiving aid will have a greater need so we will be providing more money in our aid budget."

In addition, Cornell's endowment -- which is reported to be $2.1 billion -- is significantly smaller than Princeton's. However, the university did register an investment gain on its endowment in 2003-04.

Cornell, which partially operates under the New York State University System, also attributed its tuition increases to declining state appropriations, decreases in endowment payouts, more competition from other schools and fast-changing technology.

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