Wednesday, November 28, 2001

Possible tuition hike to mirror economic trends
By Sarah McClellan
Staff Reporter

By Sarah McClellan
STAFF reporter
Calculations show tuition will increase $900 to $1,200 per year for students on the flat rate plan and $25.20 to $33.60 per credit hour for other students, based on 2001 tuition rates, if a 6 to 8 percent tuition hike is instituted.

Carol Campbell, vice chancellor of finance, said she couldn’t comment on exact dollar amounts for tuition increases, but said a 6 percent to 8 percent increase is likely. Campbell said undergraduate tuition increases between 4 percent and 6 percent each year if the economy is stable.

“We’ve just begun the budget process,” she said. “It’s too soon to give exact numbers.”

Campbell said a dollar amount will not be given until after January.

The possible increase is based on an average of the endowment’s earnings for the past 12 quarters, the last of which will end Dec. 31, Campbell said.

“What we can spend from the endowment is based on an average of (its earnings for) the past 12 quarters,” Campbell said. “Right now, we know 11 of those quarters so if the market goes up (this quarter), that’s only one-twelfth of the formula.”

Chancellor Michael Ferrari said the possible tuition increase is a result of an 8 percent loss in the stock market, which is a result of rising inflation and deprecations due in part to the Sept. 11 attacks. He said the endowment, valued at about $900 million, also went down 8 percent.

There was a $72 million loss in the endowment as of Sept. 30, the end of the 3rd quarter of the fiscal year, Ferrari said.

“Because we will expect less from the endowment than we’re accustomed to, there will be greater pressures on tuition levels,” Ferrari said.

The endowment’s earnings subsidize tuition, Campbell said, which means costs left over after applying tuition money are covered by the endowment’s earnings.

“The lower the market falls, and the longer it stays down, the larger the effect on our budget,” Campbell said. “A piece of income that should subsidize tuition isn’t keeping pace with always-increasing costs because of the slowing economy.”

Sarah McClellan
s.l.mcclellan@student.tcu.edu