This week President Mills presented the proposed 2012-2013 budget to professors and administrative staff. The budget is projected to include a 3 percent increase of the comprehensive fee, a 4 percent increase of the faculty salary pool, and a 7 percent increase of the financial aid grant pool. These figures are not final, however, as the budget will be presented to the Board of Trustees in May for final approval.
Mills said that based on modest projections for positive endowment growth of 7 percent per year, the College budget is balanced through 2015.
"We are in the middle of the year, but we are optimistic that we are going to hit our budget projections," said Mills.
The budget factors in a number of variables along with endowment returns, including the comprehensive fee of the College and the estimated percentage of students on financial aid.
Although the trustees have not yet approved the comprehensive fee for the 2012-2013 year, financial aid packages sent out to admitted students in the Class of 2016 were based on a 3 percent increase to the total per-student cost of tuition, room and board. Should the trustees approve the proposed budget, next year would be the second year in a row that the College has increased the comprehensive fee by a record low. Last year's was also up 3 percent from the previous year, the lowest annual increase to the comprehensive fee since 1971. According to Mills, the College has been able to keep the increases low by factoring the College's revenues into its calculations of cost per student.
If the budget is approved in May, Longley reported that the 3 percent increase would bring next year's comprehensive fee to $56,128, keeping Bowdoin in line with peer schools. Middlebury announced on March 5 that it has set its 2012-2013 fee at $55,950, a four percent increase from the previous year. Williams will also increase its comprehensive fee by 4 percent next year to $56,770.
Colleges in Bowdoin's peer group employ different mechanisms to calculate tuition and fees. For instance, in 2010 Middlebury adopted a policy that limits increases to the comprehensive fee to no more than one point above the increase in the Consumer Price Index (CPI) during the previous fiscal year. The index is a measure of the prices paid by urban consumers for a variety of consumer goods and services.
At Monday's faculty meeting, Mills emphasized that every increase in academic or administrative programming impacts the comprehensive fee, which is far below the actual cost the College incurs per student. Katy Longley, senior vice president for finance and administration, reported that in the current fiscal year, the actual cost to attend Bowdoin is $72,000, not including financial aid.
Last year, at least 42 percent of the entering class was on financial aid, and the College projects that next year's percentage will be similar.
According to provisional budget projections, the total pool of grant money available for financial aid applicants is set to increase 7 percent.
Stephen Joyce, director of student aid, wrote in an email to the Orient that the College tracks the percentage of household income spent by middle-class families to finance higher education and recognizes that those families make a "significant commitment" to pay for College.
"By recognizing that commitment and providing some relief with additional grant support, we may enroll more students from middle income families and increase the percentage of the class on aid," wrote Joyce.
Mills also announced that, pending board approval, the pool for faculty salaries could increase 4 percent. The projected faculty compensation rates for 2012-2013 will keep the College in line with its 4-5-6 policy for professor salaries. The policy considers the average salary rates at the fourth-, fifth- and sixth-ranked liberal arts colleges in terms of faculty compensation to determine Bowdoin's faculty compensation rates.
The College froze salaries when the financial crisis hit, suspending the 4-5-6 policy. The freeze was lifted in February 2011 and the policy reinstituted, though the College could not reimplement the original formula for calculating faculty compensation. Longley anticipates that the College will return to the original 4-5-6 policy in the 2014-2015 academic year.