Last week, The Guilfordian featured an article on the 2005-2006 budget, which proposes 5.9 percent tuition increases for traditional students. I interviewed Jerry Boothby, Guilford’s Chief Financial Officer, for more details on the tuition increases.
Guilfordian: Why are tuition rates being raised?

Boothby: In 2004, the HEPI (higher education price index) rose approximately 4.6 percent. The CPI (consumer price index) rose 2.4percent. So, it costs more to run a college.
In 2001, the President’s Report projected a 4 percent increase in tuition for traditional students for 2005-2006. Now, the rates have gone up to 5.9 percent.

Guilfordian: Okay, in the Strategic Plan

Boothby: …It wasn’t part of the plan, but in our projections we had done a projection of 4 percent. What we actually ended up was using the 5.9 percent overall.

Guilfordian: Why?

Boothby: When we looked at the total cost of all the things that we needed that are included in the budget we saw a gap. One of the things that we looked at for closing that gap was increasing from that assumption of 4 percent to 5.9 percent, along with some other things we had to do.

Guilfordian: So was increasing the budget a strategy to achieve solvency?

Boothby: The commitment was to have a balanced budget. When we looked at the strategic plan, what was in there for revenue and expense, we had a shortfall: if we did everything that we said we were going to, we were a million dollars short. So we said, if we changed the tuition from 4 percent to 5.9 percent, changed the financial aid package, and revised the estimate of the things they wanted to do in the strategic plan – it was a combination of revenue items and expense items that we had (to change) to get down to the balanced budget.

Guilfordian: So, why did you decide that the extra money would come from students’ tuition, as opposed to alumni or another way of raising revenue?

Boothby: We looked at all of the other categories realistically, annual giving, alumni giving money – remember, at the same time we had to bring our spending down from the endowment – this year we’re spending 7.5 percent, the trustees mandated us (to spend) 5 percent. That’s $1.2 million less. That means somewhere else we needed to make up a million two.

Guilfordian: And so students were the…

Boothby: And so one of the things we were looking at in terms of potential increases in revenue was to say if we are going to increase tuition in fees how do we compare with our competitors? We don’t know what’s going to happen in the future, but our estimates of where we stand in terms of our competitors is we want to be in the middle. Schools in the last year (increased tuition) around 6 percent. So, we want to be somewhere within that range.

Guilfordian: Why didn’t you see CCE students as an option for making the extra money?

Boothby: Their increase went up 4 percent, which is an extra $10 per credit-hour. One of the options was increasing that more. What we have to look at there is what’s our competition like and how are we stacking up. Now we’re getting tremendous pressure from Winston-Salem College, they’re expanding their CCE program, so we have to be sensitive to how much we can increase the CCE tuition. 4 percent was about as high as we could go before it would start having an inverse effect.

Guilfordian: Do you think there might be an inverse effect on traditional student enrollment?

Boothby: I don’t believe so … right now, we’re going to take 80 kids less than the (2008) class. At the same time, our applications are above what they were last year. All things being equal, I don’t think we’ll have a problem filling that first year class.

Guilfordian: Looking forward to 2006-2007, do you have any projections for tuition increases?

Boothby: In the models we’re putting together for the budget, we’re using a 5 percent assumption. Once our competitors announce their rates … we’ll do another analysis.

Guilfordian: Do you have a statement for students who might be angry about the tuition increases?

Boothby: Maybe something along the lines of “This is what we have to do?” I think what we have to do is provide a better opportunity for an understanding of how the budget is built, and let people form their own opinions … we need wider forums to let people understand what actually goes into the budget, then let them judge it for themselves.

This interview has been edited only for
clarity.