Fordham Price Increase Steepest in Nation


Published: November 17, 2010

“There’s nothing that’s getting cheaper from one year to the next,” said Peter Stace, vice president for Enrollment at Fordham. And by nothing, Stace means college tuition.

Fordham is pricey and getting pricier at a faster rate than other colleges in the country. According to Campus Grotto, a website distinguishing itself as “the inside source at college,” the tuition, room and board for the 2010-2011 school year at Fordham College at Lincoln Center (FCLC) rose to the 23rd most expensive college in the nation at $52,159 from number 47 during the 2009-2010 academic year. No other college on the list aside from Fordham College at Rose Hill (FCRH), who rose to number 29 from number 53 last year, has increased as significantly as FCLC.

According to Rev. Robert Grimes, S.J., dean of FCLC, Fordham is a tuition-dependent institution, relying heavily on money that students pay to attend to fund the university, rather than relying on an endowment like other colleges do. “The source of revenue for Fordham is almost 95 percent money that comes into the schools,” he said. “We depend on a tuition for our expenses.”

“Fordham has an endowment which is rather small and does not significantly contribute to the running of the University,” he said. “It’s a relatively small portion of the budget.”

“Endowment proceeds reduce the reliance on tuition revenues to pay the bills,” Stace said. “So the larger the endowment, the more money it produces to support financial aid and operating expenses.”

With endowment as the only other option for revenue, Fordham compensates paying expenses with a rise in tuition. According to Stace, three factors aside from Fordham’s low endowment are the grounds for high tuition: a geographic location that has inflated expenses prices, academic quality ranging from top professors to the latest technology and a substantial amount of financial aid given to its students.

“We’re living in one of the most expensive cities in the world,” Grimes said. “It’s no doubt that Fordham is expensive.”

The funding to provide Fordham’s quality, ranked as number 56 in the U.S. News and World Report, and financial aid are expenses paid off by tuition. Frank Simio, vice president of Finance, said that net tuition, fees and room and board collected from students “account for 93.5 percent of Fordham’s budgeted [operating] revenues.”

Stace defined University expenses as “the amount that you would expect to have to run” the University, encompassing expenses from salaries to improving facilities to financial aid. While Fordham’s expansion project, “Excelsior | Ever Upward | The Campaign for Fordham,” is a capital project paid for by gifts and loans “to renew and enrich Fordham physically, spiritually and academically,” Stace said that loans cover its costs not donated and are eventually “paid back from the general revenues of the University…[including] revenue from tuition.”

“Top quality doesn’t generally come at the lowest price… and we have to pay for it in one of the most expensive parts of the country,” Stace said. “And we make a significant commitment to financial aid,” an item not factored into this ranking report.

“We are different than some of the other private [institutions] that are there in how much we spend on financial aid,” Stace said. Stace highlighted that the second largest item expensed from tuition behind operating expenses is financial aid. He estimated that about $112 million is spent on aid for graduate and undergraduate students, which he said is a very large expense account in comparison to other universities.

However, Stace had an issue with the methodology behind Campus Grotto’s rankings. While the website compiled the ranking list based on information directly from each university’s website, Stace said that the report was based on a sticker price, neglecting to factor in financial aid offered. “If they thought about what the net cost of attendance is to a family, we might see very different rankings,” he said, nothing that about 90 percent of Fordham students receive grant aid.

Patricia Peek, associate director of admission, explained that “Universities allocate funds to grant aid to the extent they are able from a combination of endowment proceeds and operating revenue.”  On the same note, she said, “Our endowment cannot support a higher level of funding.” This rise in tuition is a counterweight for the endowment’s inability to support expenses.

But given the economic hardships suffered across the entire country, some college students question whether tuition should be decreasing instead of increasing. Stace says no.

“As family circumstances decline in this bad economy, the need for financial aid in order to attend rises,” he said. “We want to make it possible for students to come so when families have less, the demand for financial aid is more and so that expense item is higher… and the cost of attendance rises.”

Financial aid offered at FCLC is granted to the student initially before attending and stays the same throughout the student’s career provided that they continue to meet requirements for it. However, an individual’s financial aid package does not go up when tuition rises, even though many students are in demand for it.

Peek said that the demand for financial aid has grown because “the buying power of federal and state grant aid has declined over time increasing the burden on families.” Stace agreed that the slack from federal and state aid “has been picked up by a combination of families having to take out more loans and institutions having to put out more grant aid.”

Peek said that “the University actively reached out to the students as the recession began.” She said, “The need of our students has risen and our commitment to financial aid has increased accordingly; Grant aid rose by $4 million.”  Stace said administrators came to the solution for “more financial aid to facilitate families for whom [the recession] was going to be too great of a burden.”

Those who did not receive more aid were left with option B: take out private loans. When asked whether students’ financial security is at risk when taking out private loans to pay damages stemmed from an increasing tuition, both Peek and Stace said that families consciously base their college choice knowing that rising prices applies to education as well.

Peek said, “Families appear to be aware of rising costs and many do plan.”

“[Families] make that choice coming in and they build into that the notion that Fordham [tuition] for the past five or six years has increased between four and six percent,” Stace said. “As long as we stay with that [trend], it’s kind of like we’re playing by the rules.”

But many students at FCLC simply deal with the burdens caused by nationally rising tuitions because they are passionate about Fordham.

“Families see [Fordham] as a good investment or at this price our applications, quality profile and enrollments would not be growing,” Peek said.

Stace said, “The best private institutions in the country are expensive operations to run. It’s difficult to do top-notch work and help students with need and at the same time keep the price down. It’s a balancing act,” Stace said.

In response to whether the increase in tuition is directly proportionate to the rise in rankings in the U.S. News and World report, both Stace and Peek assure there is no direct relation.

“People have made the argument that the top-ranked institutions charge more because they can. I think it’s that Fordham charges what it does because those are the expenses we incur in providing the quality that we do.”

“A high ranking is not a license to raise prices,” Peek said.