Williams administrators expect that next year’s tuition increase will be lower than it has been in years past, due to trends in Williams’s competitors, increased money from our endowment and other factors. Nonetheless, the increase will continue to tax the financial aid system.
Every year, Provost Stuart Crampton convenes the Tuition Advisory Group, which is made up of the College vice president and treasurer, the director of admissions, the director of financial aid, former provosts, members of the provost’s office and others. TAG makes a recommendation to the president, who then goes on to make a recommendation to the Board of Trustees, which ultimately votes on the increase.
TAG considers many factors when deciding on its recommendation. “Tuition,” Crampton said, “is set with a keen eye on the trends in tuition charged by our closest competitors for the very best students.” Consequently Williams tends to follow the lead of other schools. “We keep track of which schools we compete with through the Admitted Students Questionnaire,” Crampton said. “Although relatively slight differences in student charges don’t make that much difference, we think it’s important to stay in the pack.”
“In recent years,” Crampton added, “those rates of increase have been coming down.”
This places considerable pressure on Williams to follow suit. This year, Yale’s increase is under 3%, and most other schools last year were around 4% ; Williams’s was 4.6%.
When the provost’s office made its original recommendation in January, the projected increase was already lower than last year’s by several tenths of a percent. But “now that we’ve heard information from other schools,” Crampton said, “we are going to recommend that it go even lowerâ€”by about 1%.” The current estimate is around a 3-4% increase.
When deciding tuition increases, TAG also looks at national financial indicators, such as the Consumer Price Index, family incomes and returns on savings. The Consortium on Financing Higher Education, a group consisting of the 31 highest profile institutions in the country, runs a research-related office to track financial variables for its member schools.
Recent indicators of investment returns have played a critical role in determining the tuition increase. “We have had an extraordinary rate of returns on investments in the last three years,” Crampton said. “Not surprisingly, the public and the government would like to see colleges and universities spend some of their endowments on running the college. . . We [Williams and other similar schools] are all thinking that some of the increase in wealth in the last few years should go to improving our programs and some to decreasing the tuition burden on families.”
Another critical factor that TAG has to consider is faculty and staff salaries. “The dominant thing that drives the increase in tuition is the need to increase salaries,” Crampton said. President of the College Harry C. Payne agreed that “paying people [is] by far our largest expense.” Once again competition with other schools plays a role. “We need to keep our salaries up near other schools,” Crampton said
The underlying consideration of TAG is maintaining the affordability of the college. Tuition and financial aid exist in a complicated relationship. As explained by Director of Financial Aid Philip Wick, in order to project a tuition the provost’s office must project an entire budget and deduce from it how much money the college will need from student charges. “Financial aid is one of the several big cost centers in that budget,” Wick said. This creates a logical problem: in order to figure out how much tuition to charge, the provost must already have estimated how much financial aid will be given, which of course depends on the tuition itself. Thus in a sense, “financial aid drives tuition, and tuition drives financial aid,” Wick said.
As tuition continues to increase, there will be greater pressure on the financial aid system. Wick estimates that with the projected increase, there will be around a 10-12% increase in financial scholarship dollars awarded next year. But if next year’s first-year class has around 44-46% of students on aid, the increase in dollars could be closer to 12-15%.
Despite this increasing pressure, Williams will stick by its need-blind admissions. Payne said, “we will remain fully need-blind…that is our firm policy. We increase our financial aid budget accordingly to meet that commitment.”
Crampton agreed: “When we raise charges we don’t load it all on the family. The most important thing is not the balance and the numbers, but that we do keep up. Although the charges go up, we try to keep the affordability in place.”
One added consideration this year concerns the new financial aid policies being adopted by several of Williams’s competitors, especially those at Princeton, Yale and Stanford. “In a nutshell,” explained Wick, “Princeton was first out of the gates with a two-pronged initiative aimed at both low and middle income families. The Yale initiative was in response to the Princeton initiative and was aimed at middle income families, and Stanford too.” The effect of the policies will be to lower the impact of home equity when determining financial aid, in the case of Princeton and Stanford, and of home equity and other assets in the case of Yale. Princeton also went one step further, reducing loans entirely for those with incomes under $40,000, and phasing in loans for students with incomes between $40,000 and $50,000.
Williams officials doubt that we will adopt a program similar to these in the near future. However, Wick said, “we are certainly doing a lot of talking… We’re concerned about the immediate impactâ€”what is this going to do to our matriculation and admissions yields and how are our competitors going to respond.” Crampton agreed, “We’re all wondering what everyone else is going to do.”
“My personal feeling,” Wick added, “is that we don’t want to do anything drastic. It wouldn’t be in the style of Williams to have a knee-jerk reaction to this. But we also have to make sure that what we have been doing in recent years is sensible, and we want to make sure that our three primary major policies are met: need-based financial aid, need-blind admissions, and fully meeting all [demonstrated financial] need.”