Cashing in your Butler education

The tuition students pay to attend Butler University goes toward many different entities, but one of the largest chunks goes right back to students.

Butler’s largest expenditure each year is financial aid for students, Bruce Arick, vice president of finance and administration, said. Butler is the largest source of financial aid for its students. The awards are based on merit, talent and need.

This year, the financial aid given to students tallied $52 million, which is about $5 million more than last year, Arick said.

“Students are always the foremost part of the entire tuition planning process,” Tom Weede, vice president for enrollment management, said. “We take care of the promises we made to students and give them the education they came here for in the most cost-effective way.”

The financial aid amount each year does not only depend on incoming freshmen. The university has to take into account the retention rate of upperclassmen and try to anticipate how much financial aid everyone will need, Weede said.

“It is a tough, deliberative, intentional process,” Weede said.

That planning process applies to more areas of the university. Administrators must also figure out how much money is needed for the rest of Butler’s budget.

Along with financial aid, tuition covers faculty and staff wages, health and retirement benefits, potential raises and capital costs like maintaining buildings and utilities, Arick said.

However, tuition does not cover 100 percent of the costs at Butler. If it were based on cost, tuition would be a lot higher, Arick said.

Tuition and room and board only covers 87 percent of university costs. The rest of the costs come from gifts and endowments from outside donors, Arick said.

Last year was President Jim Danko’s first year discussing and planning for tuition as president, though he had been involved with tuition discussions when he was at Dartmouth College and Villanova University.

“It’s not a foreign discussion to me,” Danko said. “Every university is a little different in terms of what their financial model is and what percentage of the overall budget is covered by tuition.”

Danko said his goal last year was to keep the increase rate below 3 percent.

“I’m really sensitive about what’s going on in the market,” he said. “I’m very concerned. As a father of two college students, I’m certainly not naive to what’s going on out there.”

But when administrators plugged in that number to the working budget, they found the school would be losing $3 million.

After more planning, conversations with the Board of Trustees and discussions with departments to cut costs, the tuition increase for the current year was settled at 3.75 percent—the lowest in Butler history, Danko said.

The tuition rate and budget decisions are made by the executive council, which is comprised of the president, the vice presidents, the deans and, this year, the chair and vice chair of Faculty Senate.

The conversation also involves the chairman of the Board of Trustees and the financial committee within that board.

Arick said the planning starts by comparing Butler’s tuition to schools like Xavier University and University of Dayton.

The tuition is set based on how the council thinks other schools will go with tuition and where Butler wants to be compared with those schools, Arick said.

Once the tuition, which is considered revenue for the university, is forecast, the council will look at the other costs of the university, like departmental and building costs, Arick said.

The final budget recommendation will then be presented to the Board of Trustees for approval.

Danko said his job is to grow the university’s endowment so Butler does not have to rely so heavily on tuition.

“We just tread water,” he said. “We’ve got a laundry list a mile wide of things that people are asking for, and the discretionary resources are pretty nil.”

Danko said he wants to see the dependency on tuition go from 87 percent to below 80 percent.

“I don’t want it to all be on the backs of students,” Danko said.

Danko spent the second half of his first year on the road going to 15 different cities to build relationships with people.

Eventually, Danko said, Butler has to be able to ask for gifts and encourage alumni to give back.

Twenty-three percent of living alumni give back to the university. Danko said he would like to see that grow to 30 percent.

Planning for 2013-14 enrollment, tuition, room and board and financial aid is already beginning, Arick said.

The budget recommendations for next year will be presented to the Board of Trustees at the spring meeting toward the end of February.

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