The bad news is that a Duke education is pricey. The good news is that, at least this year, Duke is becoming less expensive to attend relative to other institutions.
The University hiked tuition for this year by a conservative 4 percent--almost two full points lower than most other four-year private schools and nearly 6 points lower than four-year public schools.
Undergraduate tuition and fees for both Trinity College and the Pratt School of Engineering totals $27,844 for the 2002-2003 academic year, which closely resembles tuition at peer institutions. With room and board, the total figure increased 3.9 percent for the school year to reach $35,765.
Faced with an impending budget shortfall for the foreseeable future, Arts and Sciences is considering different options to balance its budget-including fewer faculty searches that could reduce the faculty's size by up to 50 members.
The Arts and Sciences Council Budget Task Force highlighted that move when it recently considered what faculty costs could be reduced in light of financial strains. The task force was charged with prioritizing faculty size and compensation, research support and doctorate research support, of which it recommended only the former two.
"That really is a worst-case scenario and nobody really expects that to happen," said Philip Cook, professor of public policy studies, who headed the task force. "I think that the powers that be will find another way."
Included in these other ways would be a higher tuition increase. A 5 percent tuition hike-just 1 percent more than this year's increase-would add $1 to 1.3 million to the school's endowment. The University has projected a $1.7 million shortfall for the next fiscal year.
"If no other arrangements are made, we're looking at a $6 million deficit in three years," Cook said.
William Chafe, dean of the faculty of Arts and Sciences, said that if tuition increases were held at 4 percent each year, the University could compensate through increased undergraduate enrollments, expansion of federal grants, lower salary increases or a decrease in the number of total faculty.
"I am confident that we will be able to address the problem through a combination of these approaches," Chafe wrote in an e-mail.
He added that the lower tuition hike was not a strategic attempt to increase the applicant pool, but was rather based on budgetary projections and expectations of what peer institutions would do. The University was surprised that other schools raised their tuition by 5.8 percent for the academic year, Chafe said.
Although the struggling economy adversely impacted most universities' fiscal budgets, Duke administrators said that the fiscal markets' performance was not a consideration in setting the 4 percent tuition increase.
Over the last five years, stock market returns have been averaging about 15 percent a year. While Duke has spent its funds as if it were only receiving a 5 percent return on investment, other schools have not been quite so frugal.
Mark Nichol, a Brown University spokesperson, said most universities use a rolling average-which averages returns out over three years or some similar time frame-so that a dip or a spike in the market is not exacerbated. Many other universities have made higher projections than Duke, which also uses a rolling average.
"Many schools are struggling financially, as are we, but since we were conservative with our funds over the last five years we have some slack," said Joel Huber, chair of the President's Advisory Committee on Resources and professor at the Fuqua School of Business. "We may be in a better position to absorb a lower tuition hike."
He added that if the market continues to perform poorly, the University will have to change its policies.
"Now the markets are dropping, but there's still a large group of funds that in a sense we owe ourselves," said Huber, who also sits on the Board of Trustees Committee on Business and Finance.
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