The College’s Board of Trustees has approved a tuition increase of 3.9 percent, or $2,293, to $47,418 for the 2015-2016 academic year. The full comprehensive fee for the College, including the increased cost of room and board to a total of $13,628, is now set at $61,046.
For the past five years, the College has used a formula known as the CPI+1 rule to limit how much tuition could increase year to year. Previously the administration had recommended the trustees move away from the policy; this year it has been abandoned altogether. Since its adoption in 2010, the CPI+1 rule capped a tuition increase at one percentage point above the previous year’s inflation as determined by the Consumer Price Index (CPI). The College applied the same formula to room and board fees. Under this formula, the average annual increase in these past five years has been 3.2 percent.
Since its implementation, the CPI+1 rule has been successful at keeping tuition costs from rising exorbitantly, as Middlebury ranks below many of its peer schools for comprehensive fees, including Trinity College ($63,970), Williams College ($63,290), and Wesleyan University ($64,324).
“The so-called CPI+1 formula moved Middlebury College from the top to near the bottom of its peer list of most expensive liberal arts institutions,” President of the College Ronald D. Liebowitz said in an email.
The 2013-2014 academic year marked the first year the College did not apply this rule to its room and board fees, when tuition rose by 4.5 percent.
The cost of tuition is determined in conjunction with an overall annual budget approach, a process in which the administration puts forth recommendations to the Board of Trustees. The rising tuition costs caused can be attributed to a number of different factors.
According to Vice President for Finance and Treasurer Patrick Norton, the College’s tuition cost will continue to rise by at least some amount due to increasing operating costs. In an email, he noted that the three main operating costs are compensation (which include salaries, wages, and employee benefits), financial aid, and facilities. In addition, an increase in tuition costs is related to performance of other primary revenue streams of the College, namely the endowment and annual fundraising. As of June 30, 2014, the endowment’s market value was approximately $1.082 billion, and approximately 18 percent of the budget is sourced from endowment earnings. Gifts from alumni, parents, and other benefactors make up 8 percent of the College’s operating budget.
Pressures to the College’s budget also include the higher percentage of the student body receiving financial aid, as Middlebury admits domestic students on a need-blind basis while also fully providing aid based on demonstrated need. The class of 2018 marked the highest percentage of students receiving some sort of financial aid in the College’s history.
In respect to operating costs, Norton said that the College pursues “a labor intensive business model.” As a global entity, the College also maintains a 9:1 student to faculty ratio, a residential campus in a rural community, and 2.5 million square feet of campus buildings. “These four items require a fair amount of faculty and staff to run and manage. Next year compensation is set to increase in the form of an annual salary and wage increase as well as employee benefit increases,” Norton said.
Norton also noted that the estimated cost of a Middlebury education is around $78,000 per year, the difference of $17,000 subsidized by the College’s endowment and annual fundraising.
“We are continuously looking at different ways to slow the growth in operating costs from the way we purchase our goods and services to refinancing some of our long-term debt,” Norton said.
