Fifty one thousand, seven hundred and twenty dollars. Add up the tuition, room and board, books and supplies, and personal expenses, and that’s what Northwestern expects the average student to pay this year. Ranked the 39th most expensive college in the country by BusinessWeek, students and parents are looking at their empty pocketbooks and the sinking economy and asking: Are we getting what we pay for?
Perhaps the first question should be: What are we getting? A 12’’-by-14’’ dorm-room double with an almost-comfortable mattress and a too-small closet costs $6,219. While $4,373 buys you 13 meals a week for the school year – many of which often amount to a $10 dinner consisting of pasta with tomato sauce and chocolate-chip cookie-dough ice cream for dessert. $36,756 for a year full of distros that you wouldn’t even rate a “2″ on your CTECs.
For close to the same price as one year at Northwestern, you could buy a BMW Z4 M Coupe, or a four-bed, one-bath single family home in Aurora, Ill. Or you could get two of the most expensive wedding bands at Tiffany & Co. or 8,144 Chipotle burritos.
From the outside it may seem like the life of a Northwestern student isn’t worth the big bucks. We may have multiple gyms, but it’s still impossible to find an open elliptical at Blomquist or SPAC. We may have 3,125 professors but every student can think of at least one class that didn’t seem worth the effort spent waking up for lecture. And burritos at Plex don’t have anything on Chipotle.
But the equation isn’t that simple. According to the Office of Budget Planning, Analysis and Allocation Web site, of the $1.37 billion total operating expenses in the 2008 fiscal year, only $223.6 million of that went to “services and professional fees.” The category includes everything from postage and insurance to theatrical productions and the other things – other than the physical buildings – that students encounter every day and that many use to judge the quality of life on campus. gWhile students focus on options at the dining hall and dorm room floor space, the Northwestern is concerned with funding things like financial aid, teacher salaries, research and heating costs.
It’s the latter set that helps Northwestern stay at the top of the rankings pack: Northwestern is the 12th best university in the country according to a U.S. News and World Report and 33rd in the world based on the Times Higher Education-QS World University Rankings. The quality of the professors coming in and research coming out of Northwestern attract the best and the brightest, and NU’s need-blind admissions and financial aid programs allow them to attend and further the university’s reputation.
In fact, as high as tuition seems, it doesn’t reflect the true cost of a Northwestern education. “Even for a student who is not on any form of financial aid and paying full tuition and room and board, a Northwestern education is still being discounted,” says William Banis, Vice President of Student Affairs. “We’re underwriting the cost of education by using the endowment.”
James Hurley, Associate Vice President of the Office of Budget Planning estimates that Northwestern students only pay one-third to one-half of the real cost. “$70 to $80 thousand would be the true cost if it weren’t subsidized by other revenues,” he says.
Still, shelling out tens of thousands a year can make one wonder exactly where, how and why Northwestern spends its money, and the answer isn’t so easy to decode. While financial reports dating back through the decade are available online, they’re not easy for non-economics majors to understand and they’re definitely not written to answer questions students would have about the particulars of the services they’re getting.
Many of the numbers are so hard to gather, not even Banis knows the details of where Northwestern’s money is spent. So why all the secrecy? “Because we can,” Banis says. As a private institution, Northwestern is free from laws requiring public disclosure of financial information. When asked about the level of transparency in spending, Senior Vice President of Business and Finance Eugene Sunshine said in an e-mail: “Much info is made available to students when there is a useful purpose the students have in mind.”
Well, at least the students are in mind.
As well they should be. Tuition is Northwestern’s biggest moneymaker. the 15,631 full-time graduates and undergraduates in the 2007 – 2008 school year all paid full tuition, Northwestern would net $574,533,036. But it’s not so simple. As far as graduate students go, each school charges its own fees based on the program. Music students pay the general $12,252 every quarter, plus a “continuation course tuition” with prices varying between an extra $301 to $4,084 per course per quarter. Grad students at the School of Communication only chip in $10,610 per quarter – unless you’re going for your doctorate in audiology. Those lucky ducks only pay $9,191.
Then there’s financial aid to consider. Maintaining a robust financial aid program and need-blind admissions is the university’s top priority, according to Sunshine. “We don’t want to become a place where only those who can afford full tuition can come here,” he says. Technically, the university covers “institutional aid,” that is, the difference between how much it costs to go to NU (that’s that $51,720 number), and how much your family is able to contribute as determined by the friendly people reading your FAFSA form. In 2008, Northwestern awarded $222 million in financial aid.
In fact, of the university’s $1.52 billion total operating revenue in 2008, only $433.7 million came from tuition and fees after scholarships, fellowships and financial aid were deducted – a paltry 28.4 percent of the total. The rest came from grants and contracts, investment returns, sales and services, endowment distribution, gifts and other sources.
In 2007, the discovery and sale of the prescription pain relief drug Lyrica added to Northwestern’s financial comfort. At the end of the year, the university sold a portion of the royalties for $700 million in cash. This money was added to the endowment and delegated to fund such things as financial aid, research startup costs and building construction on campus.
But most of the expenses are for personnel. “We’re a very people-intense place,” Sunshine says. “Think about it. All the faculty, all the staff – they all get salaries and benefits.” In 2008, salaries took up the biggest chunk of the expenses pie, costing a whopping $616.6 million, nearly half the total operating expenses. But “people” costs comprise more than just the professors and administrators. Janitors, dining hall workers, those guys who plow the sidewalks and even students with on campus jobs receive paychecks from Northwestern.
Most budgetary decisions related to academics are made by the deans of the individual schools. There are some parameters, Sunshine says. If the university sets a standard pay-raise of three percent, the deans will follow along. But each school is given the authority to spend its money as it sees fit.
Sunshine admits that a lot of the spending choices have to do with maintaining Northwestern’s prestige. It’s a positive feedback system. In order to attract quality professors you need smart students and research opportunities. To attract its share of the smart students, Northwestern has to out-compete the Ivys and pseudo-Ivys like Duke, Washington University at St. Louis and University of Chicago. “We do it because other places do it and if we want to stay a great university we have to do it,” he says. “If you want the best students to come here, you better meet their expectations.”
So Northwestern has taken steps to improve campus and academic life over the years. Sunshine, an NU class of 1971 alum, has noticed the changes since he was an undergrad. Back when he was a student, Patten was the only gym, and there was no student union. The new library was still under construction, as was the Lakefill. There was no study abroad office. And don’t even think about vegetarian options at every dining hall meal. Academically, things have changed too. As students have expressed more interest in pursuing research projects, Northwestern has worked to open more opportunities.
In fact, research takes the next-biggest chunk of the pie. Research conducted both by professors and by graduate students is mostly funded by grants obtained by the people conducting the studies. “A portion of the research we do is funded by outside sources, but it never covers it all,” Sunshine says. That leaves Northwestern to pick the slack where the grants don’t cover costs for things like equipment, portions of salaries and space in which to conduct the research.
The majority of the university’s expenses are fixed from year to year. “There’s not a lot of flexibility and freedom to make massive changes in funding over time,” Banis says. “So the changes come on the margins.”
That’s not say things are stagnant. The Medill School of Journalism has undergone major changes in its curriculum in the last three years – and those changes cost money. “The biggest thing the school does is teach,” Medill Dean John Lavine says. “When you design the curriculum you’re making decisions about the budget. We’re not going to have one class in multimedia, we’re going to have three. So you need more money, more faculty, more equipment.”
The university administration does solicit student feedback and help on adjusting the overall budget each year. Sets of committees in the office of student affairs and the athletic office advise the University Budget Planning Committee who makes the final recommendations to the Board of Trustees, who officially sign off on the budget. The student affairs committees meet with the Board four times each year – the undergraduate student committee three times, and the graduate and professional students committee once. They also looks at surveys taken from other peer universities as well as an online survey of Northwestern students conducted each January about opinions on things such as food and housing.
The Office of Student Affairs meets with the Undergraduate Budget Priorities Committee, made up of student leaders and elected delegates from large groups on campus including ASG, Dance Marathon, PanHel and Arts Alliance, twice a quarter to discuss issues and student requests for services. “I didn’t just want to be lobbied by ASG,” Banis says. “I wanted to have a broader fill of student activities and student organizations.”
At these informal meetings, often over dinner, students have proposed everything from extended library hours to the addition of a rock-climbing wall at SPAC. They don’t get everything they want, but in recent years these meetings have resulted in more equipment for Blomquist, Saturday shuttles to downtown Chicago and the Norris first floor renovation.
Still, Banis admits that the student affairs budget used to pay for projects like these is only a small percentage of the university’s total budget and it has to cover expenses that the students don’t lobby for, like installing sprinkling systems in all the residential halls. “That’s not something that contributes to student life,” Banis says. “It’s opaque, not something students appreciate. But it’s the right thing to do.”
Despite the steady income, Northwestern isn’t immune to the economy. Administrators have troubleshot their options to compensate for the faltering markets. As incomes stagnate and decrease, Northwestern will have to shell out more money to be able to maintain need-blind admissions and annual increases in tuition will be less in coming years. And that money will necessitate cuts elsewhere. Sunshine expects that teacher salaries won’t rise as much as they’d hoped pre-crisis. Banis emphasized smaller changes – from moving print publications online to expanding the Green Cup to conserve energy.
So back to the original question: is the money worth it? Northwestern may not make the Princeton Review’s list for “Best Campus Food” or “Dorms Like Palaces,” but after graduation, when the nights full of keg stands followed by one-night stands fade away and mortgages and car payments are looming the future, “Bachelor’s Degree – Northwestern University” will look pretty golden at the top of a resume, no matter how crappy and overpriced the dining hall coffee was.