March 2010: Carol Christ Visit

Post date: Mar 22, 2010 7:58:28 PM

On March 18, Smith President Carol Christ spoke about the Cost of Higher Education and gave an update on the college. Thanks to Aimee for hosting!

The Cost of Higher Education is indeed high -- and President Christ's talk touched on several powerful influences of the price tag, from pressure on colleges to have certain ratios to rank in the top 10 U.S. News and World Report annual college rankings to federal loan programs.

Of Smith’s annual budget of $190 million, about $84 million, or 44%, comes from net comprehensive fee revenue. Approximately $59 million, or 31%, comes from endowment and investment income. (The current value of the college’s endowment is $1.2 billion.) At UC Berkeley, by contrast, both the size of the student body and the budget are larger by a factor of 10; Berkeley has 33,000 students, and a budget of $1.8 billion. Student:faculty ratio however is double: 20:1.

Smith facts and figures:

• • 2900 students (2600 undergraduate)

  • 285 faculty

  • 800 staff

  • student/faculty ratio is 9/1

  • staff/faculty ratio is 3.7/1

The comprehensive fee—tuition, room, and board—at Smith is $50,380 per year—about the same as the 2007 United States median family income. President Christ discussed the problem of access in that 90% of households in the US could not afford the cost of a private college -- without financial aid. 61% of Smith students receive financial aid. And still, "tuition and fees cover only 73 percent of the actual cost of a Smith education. The difference, a subsidy of more than $17,000 per student, comes from the College's endowment and annual gifts."

How much does tuition pay for salaries? "With a student/faculty ratio of 9/1, and average faculty compensation of $133,000/year including benefits, each Smith student pays a ninth of a professorial salary, or about $15,000 of her tuition."

As with most organizations, the cost of employees (salary, benefits) is a significant expense. About 60% of our budget is spent on compensation. Tenured professors, residence and dining services, physical plant, and administration employees all need decent wages and quality of life. "We spend our money on people. The people we employ are highly educated, and we compete for the best and brightest among them." Current student-to-faculty ratio is 9:1, and the college is looking at shifting that to 10:1 over time, through attrition and as faculty retire. (Several of us in attendance remembered a 10:1 ratio during our time at Smith.)

Smith is actively looking at expanding the benefits of the five-college consortium, so all five institutions could share resources in order to provide more classes, more research, more laboratory space, and more professors to provide the breadth and depth we all want for a Smith education.

As also mentioned in one of the op-eds we read prior to the talk, Smith is also exploring ways to use the campus facility more fully throughout the year.

President Christ is passionate about this topic and has been engaging the entire community in exploring ways to manage expenses and plan for a deliberate, sustainable financial future for the college.

In advance of her talk, President Christ provided us several related articles to read, links to all are here (for now): http://alumnae.smith.edu/groups/readings.php

Smith-specific items:

• • Carol Christ's Budget Letter

  • Carol Christ's Financial Plan Letter

  • Carol Christ's SAQ Column

Other publications (recommended reading order:

• • Slaughter Op Ed: "It's Time to Get Angry About Underserved Students" (3 pages, from Chronicle of Higher Ed) (a fairly quick read)

  • Trachtenberg Op Ed: "How to make colleges twice as productive" (3 pages, boston.com) (also a quick read)

  • Carey Op Ed: "What American Colleges Can Learn From the Finns" (3 pages - from Chronicle of Higher Ed)

  • Callan Report: Measuring Up 2008 is the most recent in the series of national and state-by-state report cards for higher education that was inaugurated in 2000 - (4 pages - from www.HigherEducation.org). Includes graphs.

  • D Brenenman Article: The Human Side of Financial Hard Times (how the economic downturn will affect students, faculty and staff at institutions of higher ed. Aimed at trustees and administrators. 4 pages)

  • F K Alexander Article: "...some of the more important issues and concerns impacting colleges and universities today according to four American college and university presidents who were invited to discuss these challenges as part of a presidential panel moderated by New Your Times higher education columnist Alan Finder." (7 half-width pages)

Thanks to Sherrill for the annotated notes!

If you're interested in the budget of the Alumnae Association of Smith College, see http://alumnae.smith.edu/mission/handbook_board/finances.php.