Tuition Fees To Rise By 5 Percent

Just one month after committing $2 million to a brand-new financial aid initiative, the College announced yesterday that the cost of a Harvard undergraduate education will rise by 5.15 percent next year.

College fees—which include tuition, room, board and payments for health and student services—will rise from a total of $37,928 to $39,880.

The uptick comes after last year’s 5.5-percent jump, which then marked the largest cost increase in a decade. This year’s rise marks the second-highest increase in the same period.

To help offset the fee hike, Director of Financial Aid Sally C. Donahue said the College’s financial aid budget for next year would grow by nearly 10 percent, from $72.9 million to about $80 million.

She said the rising cost of employee benefits was one of the big drivers of this year’s relatively large increase. The new financial aid program, announced last month, will eliminate the parental contributions for students whose parents make less than $40,000. It will also lower by about $1,250 the contribution for families with incomes of $40,000 to $60,000.

“It’s actually a very reasonable increase this year, particularly in light of the recently-announced financial aid initiative and the increase in scholarship budget,” Donahue said. “It is certainly reflective of increased costs, not the least of which is the cost of health care.”

Stephen J. Bradt, assistant communications director for the Faculty of Arts and Sciences (FAS), said yesterday that he did not have any information on the reasons underlying this year’s relatively large tuition increase, or on how Harvard’s tuition increase compares to previous years’ or other colleges’ increases.

Maryland state schools have seen an average jump of 19 percent in tuition over the past year, and a number of other state systems have also hiked fees more than 10 percent.

Other Ivy League institutions will have increases closer to Harvard’s. Yale University will raise its termbill 5 percent.

Donahue noted that Harvard’s increase is modest relative to many of these schools with soaring fees.

“If you compare our tuition increases this year with other schools nationwide, including, in particular, a number of public universities and state universities who have not had to increase their tuition by double-digit percentages, ours does not look unreasonable,” she said. “We certainly do try very hard to keep our tuition increases at a reasonable rate, but also one that will allow us as a college to provide all of the services we think you need to have.”

Rising tuitions across the country have drawn national attention. Rep. Howard P. McKeon, R-Calif., proposed legislation to penalize schools for large tuition increases. The proposal was withdrawn two weeks ago.

Harvard’s hike comes in a year when the University has come under fire for paying its money managers millions of dollars and for allegedly hoarding its burgeoning $19.3 billion endowment while it responds to other financial concerns through layoffs and fee increases. A few members of the Class of 1969, a 35th-reunion class that is being heavily solicited for donations, have helped lead the criticism.

A December letter from seven members of the class demanded that the University take more aggressive measures to contain tuition and student fee increases. They added that $17.5 million, the highest reported salary of a Harvard money manager salary at the time of the letter, could pay the increase in fees and living expenses for all undergraduates. The highest-paid University money manager took in $35 million last year.

“We consider these issues to be directly related,” the letter said. “If Harvard can afford to pay over $50 million per year to a small number of financial managers, and if it does so because the Endowment has recently experienced excellent growth, it is clear that Harvard can afford to reduce more than $50 million per year from the ever-increasing cost burdens on current students and debt burdens on recent graduates.”

Undergraduate Council President Matthew W. Mahan ’05 said the fee hike seems unfair in light of the millions of dollars the University is spending on other projects.

“There’s something wrong when Harvard is upping tuition and firing service workers while paying fund managers tens of millions of dollars a year and planning a multi-billion dollar expansion in Allston,” Mahan wrote in an e-mail. “In my opinion, that should be a hard sell to any thoughtful student.”

Associate Dean of the Faculty Cheryl Hoffman-Bray said last month that in setting tuition, the FAS financial staff considers the financial state of FAS, inflation, family income and where the College stands among peer institutions.

“Setting tuition is an artform,” she said in an interview last month. “It’s not a science.”

She could not be reached for comment last night.

Vice President for Finance Ann E. Berman wrote in an e-mail that the annual tuition change is proposed by FAS but must be approved by the Corporation, the University’s highest governing body.

Despite increased tuition, FAS will likely continue to face a tight budget. In his annual letter to the Faculty, Dean of the Faculty William C. Kirby said that FAS, like many schools, would be financially “constrained” in the near future.

“The Faculty’s costs continue to rise at a faster rate than our revenues,” he wrote in the letter. “The costs of health care, reflected in dramatically higher fringe benefit rates for all who work in the FAS, rise faster still. To ensure the long-term excellence of the FAS, we will exercise care in spending and make prudent use of our resources.”

—Staff writer Stephen M. Marks can be reached at marks@fas.harvard.edu.