Etchemendy addresses tuition hike

Provost John Etchemendy last night defended the recently announced increase in undergraduate tuition and room and board in front of a joint session of the ASSU legislature.

In a wide-ranging discussion, undergraduate senators and Graduate Student Council (GSC) members quizzed Etchemendy on campus health care, academic standards and campus construction.

Provost John Etchemendy addresses the recent tuition hike and other issues at Wednesday's joint legislative meeting. (MASARU OKA/Staff photographer)

The increased cost of attendance beginning next year, for both undergraduates and graduates, will come with a maintained but not expanded financial aid program. But Etchemendy said that full tuition covers only about 58 percent of the cost of providing a Stanford education.

“A three-and-a-half-percent increase is remarkably reasonable, given the drop [in the value of the endowment],” he said.

While Etchemendy did acknowledge that higher education cost growth outpaces inflation, partly because education is very labor-intensive, he insisted that it is the drop in the endowment that is putting pressure on the price of a Stanford education.

He said that the endowment subsidizes the remaining 42 percent of the cost of a Stanford education.

“Anytime you have a subsidy that drops 25 percent, as ours dropped, we have to then make a choice — how much can we cut out of the budget, how much can we decrease the quality and how much is going to end up having to be picked up by the people who pay?” he said.

On the cost side of the equation, Stanford’s building boom and financial aid increase have contributed to the growth of the University’s cost structure.

According to Etchemendy, the biggest recent driver of cost growth is the expansion of undergraduate aid. When the expansion was announced in 2008, the University projected that it would cost $20 million; the actual expense ended up at $30 million.

Like other universities, however, Stanford has also heavily invested in premium buildings — amenities like a gym with rock walls.

“There has been an escalation in overall costs that we’ve seen across the country, and part of that is competition for nicer and nicer services, particularly for undergraduates,” Etchemendy said.

Etchemendy added that he looks forward to University construction projects in 2010, but emphasized that building costs did not significantly add to tuition increases.

“Overall, if you look at the last decade — if you look at the increase in expenses, some has to do with facilities, but not an overly large part,” he said, making it clear that construction projects are only started when a funding plan, including a hefty donation, is in place.

Health Care

The recent changes to Cardinal Care, the student health insurance plan, caught the attention of many in attendance, particularly graduate students, and prevailed over the discussion for some time.

Starting Sept. 1, international students will be obligated to purchase Cardinal Care in 12-month increments. Several international graduate students at the meeting questioned Etchemendy about this provision.

In response, Etchemendy told the joint session about a foreign graduate student currently in the hospital due to a bicycle accident that has already cost hundreds of thousands of dollars. The insurance the student had did not cover the accident, and neither his parents nor his department were able to pay.

“Somebody is going to eat the cost, and it is going to be Stanford University,” he said.

Later in the meeting, Ira Friedman, the director of Vaden Health Center, addressed students’ concerns and offered individual assistance to those having problems with the system.

This is the second joint ASSU session this year featuring a top-level University administrator. Last quarter, President John Hennessy addressed the executives, Undergraduate Senate and GSC.

  • unconvinced

    Tuition covers only 58% of the cost of a Stanford education? If that’s true,which I doubt,it is a very bizarre business model most likley to soon collapse.

  • http://www.ponderingmoney.com/ Rick Francis

    Why is tuition so expensive when there is so much education available for free? I would love to hear your thoughts on this educational mystery: http://ponderingmoney.com/2010/02/18/an-educational-mystery/

    -Rick Francis

  • seriously?

    “According to Etchemendy, the biggest recent driver of cost growth is the expansion of undergraduate aid.”

    Why am I paying more out-of-pocket to subsidize students who are on financial aid? I work 25 hours a week to pay for school, and I don’t qualify for aid. This smacks of price discrimination.

  • American student

    Mr Etchemendy is being disingenuous at best with his example of the international student. I am more inclined to think that the new Cardinal Healthcare insurance is financially unsustainable unless they assure that a big chunk of the student body contributes to it with premium revenue. Forcing international students to do so is easy because they will be unable to sue Stanford for forcing them to buy their insurance product. Stanford lacks the balls to force American students do the same because they fear a potential class action suit.

  • Ex Donor

    The Financial Aid Program is flawed on so many levels it’s almost laughable. The damage it is doing to Stanford’s fiscal strength is incalcuable. And for what? So we can change Stanford’s to “We had to destroy it in order to save it”?

  • Zimp

    nicer and nicer services ??????????? I’m missing something.

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