Georgetown’s Board of Directors approved a broad new plan for the university’s financial future last week, voting to raise tuition while admitting that it will take at least two years longer than expected to stem millions of dollars in deficits.
The board agreed to a 6 percent hike in full-time undergraduate tuition, raising the total approximate cost of attendance for the next academic year to almost $47,000, the highest level in university history.
The new plan will raise tuition for the 2006-07 academic year to $33,555 for undergraduates and $31,517 for graduate students. Room and board costs will also increase from $10,124 to approximately $10,500.
“This [increase] reflects the reality that many higher education expenses increase at a higher rate than inflation, such as energy costs, technology costs and financial aid,” university spokesman Erik Smulson said. “We work hard to limit growth of tuition and also understand that the Georgetown University community expects us to keep pace with peer institutions in terms of academic strength and the quality of program services.”
The tuition hike is similar to those in the past several years, which have been consistent with or just above national averages for tuition increaes at private four-year universities. Tuition and fees at private universities rose 5.9 percent last year, according to a 2005 report by the College Board.
Patricia McWade, dean of Student Financial Services, said that the tuition increase would not affect the university’s need-blind admissions policy or its commitment to meet students’ full financial needs.
“We will also continue to meet full need. . It’s a very high priority of the university and something our president holds dear,” McWade said.
“Certainly if you charge more tuition, you’re going to have more money, but then you’re going to have to put some back in” to fund financial aid, she added.
The Board of Directors also issued a broad new four-year financial plan at its meeting, admitting that Georgetown would fail to meet its goal of eliminating its deficit by 2008 and would continue to spend more money than it takes in until at least 2010.
Administrators blamed higher energy and fuel costs, as well as lower-than-expected savings from reorganization and layoffs at the edical Center, for the delay in the university’s plan to break even financially.
Georgetown ran a total operating deficit of $34 million in fiscal year 2003, $6.3 million in 2004 and $15.2 million in 2005.
Chief Financial Officer Christopher Augostini told university newspaper Blue and Gray that the new four-year plan will focus on staunching losses at the Medical Center, increasing the university’s ability to maintain a large amount of cash on hand and investing in new projects like the planned MSB Center and science center.
Augostini could not be reached for comment, and his office referred questions to the Office of Communications. Medical Center Chief Financial Officer Kevin Kosher declined comment and also referred questions to Communications personnel.
The Medical Center has contributed heavily to the university’s financial problems for over a decade, accumulating over $330 million in deficits in the past 11 years. Although the center’s financial situation has brightened in recent years, it still lost $15.9 million in 2004-05, and progress predicted after the board’s 2001 decision to restructure the center has been sluggish.
The Board of Directors approved a sweeping reorganization of the center last February, after dozens of layoffs in summer 2004 failed to produce the expected savings. The Medical Center was restructured into four administrative units designed to reduce operating costs and streamline financial operations.
“The financial situation in the Medical Center has improved over the past year due to its reorganization into four programmatic and economic units,” Smulson said. “However, a tightening of [National Institutes of Health] funding – a major revenue source for GUMC – as well as unanticipated expenses such as energy and fuel costs will mean that the financial benefits we expect to see from restructuring will take longer than originally expected.”
The Board of Directors also approved new funding for the planning and design of the proposed campus science center, which would provide new facilities, classrooms and offices for cramped university science programs. Administrators say the new building, which would be built on Lot T and cost about $100 million, could be completed by 2011.
The board also voted to reorganize the university’s primary fundraising agency, the Office of Alumni and University Relations, renaming it the Office of Advancement and approving a restructuring plan that would divide it into several specialized departments.
Smulson said the board also signed off on two new master’s degrees programs in biology during last week’s meeting. One program, a joint M.S. in Biomedical Science and Technology anagement with Virginia Tech, is pending approval by Virginia Tech’s board of directors and would concentrate on drug and medical device development. The other, a M.S. in the Department of Biochemistry and Molecular and Cellular Biology, will focus on biotechnology, he said.