It has been a while since I posted, but my silence was not because there was little about which to communicate; just the opposite. Much has gone on since my last post, including another great Winter Term (highlights to come), the start of the “spring” semester, the trustees’ annual February meeting, Winter Carnival, which coincided with the Vancouver Olympics, where Middlebury alumni excelled and garnered silver, and great athletics performances by our winter sports teams.
Though I hope to write on a number of these happenings over the next few weeks, the one issue that has generated more e-mail and telephone traffic to my desk was my proposal to limit comprehensive fee increases at the College to “CPI + 1,” which means increases of up to 1 percentage point above the consumer price index as reported each December prior to the next academic year (so that next year’s comprehensive fee would be based on the December 2009 CPI). The proposal was part of an address I gave on campus on February 12.
Quite frankly, I am surprised this proposal has generated such publicity; I have received many, many e-mails and interview requests, and both Inside Higher Education and the New York Times’ “The Choice” education blog have covered the proposal. For those not familiar with the issue, or the trend in comprehensive fee increases during the past few decades, here is the context: last year our comprehensive fee increase was 3.2 percent above the previous year. That increase represented the lowest increase in 37 years. The increase came following a year (as measured in December of 2008) in which the consumer price index increased +0.1%, or was almost flat. Thus, our comprehensive fee increase was 3.1 percentage points, or 310 “basis points” above the CPI. What I am proposing is that we set our comprehensive fee increase to be within 100 basis points of the most recent CPI, which, given the CPI of 2.7% measured this past December, would mean our comprehensive fee for next year would have a ceiling of 3.7%. Or, had we decided to do “CPI + 1” last year, the comprehensive fee would have increased up to 1.1% and not the 3.2% it did.
How much of a change would CPI + 1 be for us going forward? During the past 18 years, Middlebury raised its comprehensive by more than 100 basis points (or greater than 1 percentage point above the CPI) 14 times, and the mean annual increase over the 18-year period was 2.36 percentage points, or 236 basis points, above the CPI.
The purpose of restricting our fee increases relative to the CPI beginning this year is in recognition that the price to attend Middlebury has grown far faster than inflation, and such increases cannot continue without a negative impact on the institution. Although the demand for a Middlebury education is stronger than ever (we received a record number of applications this past year—just shy of 8,000), one has to wonder how much families will be willing to pay for a four-year education, and how many excellent would-be applicants have already decided, or will soon decide, not to apply due to the escalating price.
Critics of this “CPI + 1” approach argue that the demand for an elite, private liberal arts education is less elastic, or more inelastic, than I may think. They also note that all students already receive a $30,000 scholarship to attend colleges like Middlebury (since the true “cost” of educating each student is closer to $80,000/year with the endowment and annual gifts funding the difference), and that many families are willing to accept the high annual increases that have been the norm for a better part of 35 years. Finally, some also argue that we will put ourselves (unnecessarily) in a disadvantageous position vis-à-vis peer institutions because they will charge more and therefore have greater annual resources with which to enrich their students’ experiences. I believe it is time to limit our fee increases and force ourselves to make more thoughtful and consequential decisions regarding the resources available to us. I am curious to hear your thoughts.