Economic downturn and Covid-19 precautions bring tuition and endowment draw increases

By Tony Sjodin

Sarah Fagan

Middlebury College increased tuition by 3 percent for the 2020-21 academic year, sparking criticism from students, parents, faculty and staff. The Board of Trustees voted in January to raise tuition and revisited the decision after the Covid-19 pandemic hit, but decided to move forward with the increase.

“At that time there were so many uncertainties,” Treasurer David Provost said. “We’d just refunded about nine million dollars … so the 2020 loss is going to be about $12 million.”

The planned FY21 budget draws an extra 2.5 percent from the endowment, in addition to the typical 5%. This amounts to a maximum of $23.5 million extra this year, according to Provost. The FY21 budget also includes approximately $5 million to cover costs created by the pandemic, such as testing, PPE and classroom modifications.

While fewer students will be on campus in the fall, no faculty or staff have been laid off. More intense cleaning regimens and complicated food distribution necessitated by Covid-19 have increased costs this semester, according to Provost.

“At the time, because of the level of the deficit, with $23.5 million dipping into the endowment, the board did not feel comfortable reversing its decision like some schools have,” Provost said.

Annual tuition increases are not unusual at colleges and universities throughout the country, even in years without the financial uncertainties of a global health crisis. In spring of 2019, the board voted to increase Middlebury’s tuition by 3.25 percent for the 2019-2020 school year, and other NESCAC schools implemented similar increases. In April of 2019, Provost said he expected an annual tuition increase of roughly 3 percent for the next three to five years.

This year’s increase has been controversial given the impact pandemic precautions will have on college life, with a shift to largely online courses, new physical distancing and gathering-size guidelines, and many students enrolled as remote learners.

During the spring term, students across the country petitioned universities for partial tuition refunds because of the shift to remote learning, and some students brought class-action lawsuits demanding reimbursements. A Middlebury Language Schools Masters student began a petition urging the college to refund tuition for all affected students, but the college refunded only room and board fees for the spring.

Many have questioned why the college is not relying more heavily on the endowment, how the increase is justified when the liberal arts college experience shifts to remote learning and why tuition is increasing amid faculty and staff wage freezes. 

“I understand why they are raising tuition in theory, but I wish that they had not done it in a time where so many families are financially vulnerable,” Eva Stanley ’23 said.

Several other colleges have adjusted their fall tuition rate because of the pandemic’s effects on in-person education and the financial circumstances of families. Georgetown, Princeton and Lafayette have announced a 10 percent discount for students studying remotely, and Williams is cutting tuition by 15 percent for both in-person and remote students. 

One of the reasons Middlebury cannot do the same, according to Provost, is the donor-restricted portion of the endowment. When donors give to the college, they can earmark their contribution for a particular program or purpose, making those funds unavailable for emergency use during the pandemic. Middlebury has a comparatively high proportion of donor-restricted funds in its endowment, Provost said.

“Of the 1.157 billion, 1.126 billion is restricted, of which 946 million of it is donor-restricted, so we can’t use it for any other purpose,” Provost said. “We could go back and ask donors — if they’re still alive — if we can change it, and we still may have to do that if things get much worse.”

Another $180 million of the endowment is board-restricted, meaning the board could choose to change the designation of those funds for other purposes. However, many of the top board-designated endowments are for faculty salaries, student financial aid, the museum and athletic facilities, leaving less funding available for future years.

The Middlebury chapter of the American Association of University Professors (AAUP) issued a statement on their website and Twitter expressing surprise at the tuition increase. “All employee salaries have been frozen (and with cost of living [increase] about 1.6 percent this means all employees are earning less than in 2019). Employees also face threats of 15 percent compensation cuts that remain in the current budget plans depending on whether students can remain on campus this fall,” the statement said. 

The response also said publicly available IRS forms from previous years indicate that the college regularly draws more than 5 percent from the endowment, contrary to the college’s claim that they are taking more from the endowment this year than they normally would. According to Priscilla Bremser, professor of mathematics and member of the Middlebury AAUP, the college’s goal has been to annually draw 5 percent from the endowment for many years, but it has consistently drawn more than 5 percent for the last 10 years. 

“We are concerned this is an excuse to justify future further cuts to worker compensation, inevitably creating tension between Middlebury workers and students, which only hurts us all as we enter into an uncertain and highly stressful fall semester,” the AAUP statement said.

I do think long-term it will have an impact on future increases,” Provost said. “If we get through this year, I think the pressure not to increase tuition next year will be much greater than it’s been.” 

In addition to an increased tuition, Middlebury’s student activities fee has also remained the same. Some colleges have also discounted the mandatory student activities fee for the academic year because of restrictions on in-person events and travel. Middlebury students studying remotely will not pay room and board, nor will they pay the mandatory student activities fee. Students studying on campus will pay the full $436 student activities fee this year, although many events will happen entirely online and remain open to remote learners. 

The SGA Finance Committee distributes the student activities fee collected by the college through a budgeting process that may change this year. The committee does not set the activities fee but is adjusting their budgeting process to reflect the unusual semester.

“We have to go back and look over everything we funded in the spring, so we actually have pushed off a lot of our budgeting process to this fall because it is looking so different, and we want to be up to date with the requirements on campus for health and safety,” said Mason Olmsted ’21, director of the SGA Finance Committee. 

Approximately a third of the student activities funds go to the Middlebury College Activities Board (MCAB) each year to pay for popular events like concerts. This year those events will not be possible, so the Finance Committee has been working with MCAB to reassess how funds will be distributed and used. 

“I’ve been wholly impressed with MCAB’s creativity and ability to start planning events despite the circumstances, especially considering many of their programming and events typically function around being together and being in person around many people,” said Alison Hudson ’21, the other director of the SGA Finance Committee. 

The committee is also working to evaluate how the student organization budgeting process, usually completed in the spring of the previous school year, will potentially change during the fall.

“It’s gonna take the first month to figure out what’s going on, what are the rules, what can we do, what can we not do. That’s where I really hope organizations come in with great ideas via new money requests, and we can fund those events on campus,” Olmsted said.