State of the University, Spring 2016
March 14, 2016
Dear Members of the BU Community,
As you receive this letter, our students are returning from spring break and the energy in our classrooms is focused on what remains of the semester and the sprint to its conclusion in May. Across campus new facilities are taking shape. The façade of the new Center for Integrated Life Sciences & Engineering (CILSE) on Commonwealth Avenue is starting to appear and we are on schedule to open this amazing new facility in spring 2017. As you may have read in BU Today, we are in the final stages of planning the renovation of Myles Standish Hall, which will commence in June when required City permits are secured. We are starting design work on new facilities for the arts on campus, as I will explain in more detail below. Finally, the Campaign for Boston University is on schedule; we expect to pass through the $1 billion original goal soon, en route to the increased objective of $1.5 billion.
These are but a few of the signs of the University’s progress. My main purpose for writing is to brief you on several topics that are important and timely. They are:
- Focusing on the Arts on Campus
- The Task Force on General Education
- Re-envisioning the Howard Thurman Center for Common Ground
- Undergraduate Education and the Value Proposition
Focusing on the Arts on Campus
We expect the Boston University Theatre property on Huntington Avenue to be sold shortly—concluding a process initiated last fall. As we have reported previously, the rationale behind the sale was to concentrate financial support (meaning both capital and programmatic resources) for the theatre program on our Charles River Campus. Locating the theatre program and the majority of theatre performances on the Charles River Campus will help us realize the goal of making theatre a more integral and vibrant part of the arts environment at Boston University. This goal aligns with the BU Arts Initiative, which was established to make the arts a part of the educational experience of every BU student.
As part of this transition, last month we announced a plan for development of a new on-campus theatre production facility, a new studio theatre, as well as the partial renovation of 855 Commonwealth Avenue, the home of the College of Fine Arts. A major element of the 855 Commonwealth Avenue renovation will be to restore the ground-floor windows in the façade to make the exciting activities in the College more visible from street level. These three projects are being undertaken with an initial commitment of $50 million by the University that will be partially funded by the sale of the Huntington Avenue properties, with the remainder coming from University reserves.
Our plan is for the new facilities to be completed by fall 2017. There is more to be done to improve facilities for CFA, but I believe these steps are a good beginning.
The Task Force on General Education
The Task Force on General Education was established in November 2014 to develop a vision and intellectual framework for a University-wide general education program for all BU undergraduates. Last fall, the task force released a white paper as the basis for discussions with the BU community about the knowledge, skills, and habits of mind BU graduates need to thrive in the 21st century. The task force engaged students, faculty, parents, staff, alumni, and trustees in thoughtful and vigorous discussion, soliciting feedback in 36 face-to-face meetings and via online communication. The task force has released its final report, and the University Provost has forwarded it to the University Council for consideration and, we hope, adoption.
We are also working with the University Council and our Board of Trustees to put in place changes to the University By-Laws and the University Council Constitution that are needed for administration and oversight of the all-University undergraduate general education requirements, which will commence as soon as the program is approved.
The creation of the general education requirement is a transformational development for undergraduates at Boston University. The task force, led by Bruce Schulman, William E. Huntington Professor of History, and Elizabeth Loizeaux, professor of English and associate provost for undergraduate affairs, has produced a report and recommendations worthy of an institution committed to preparing all our students to be “reflective, resourceful individuals ready to live, adapt, and lead in an interconnected world”.[1]
Re-Envisioning the Howard Thurman Center for Common Ground
You may recall that in my December 2 letter to the community, I spoke of our commitment to enhance the visibility and scope of the Howard Thurman Center for Common Ground as a means to promote and nurture the inclusive community we want Boston University to be. I reported on the formation of a committee composed of faculty, students, and staff and chaired by Kenn Elmore, associate provost and dean of students, and Mary Elizabeth Moore, dean of the School of Theology. The committee’s charge is to recommend ways to build on and strengthen the capacities of the center. The committee has conducted a series of meetings across campus to solicit input, and I look forward to receiving its recommendations before the end of the semester.
Undergraduate Education and the Value Proposition
The admissions process for fall 2016 and January 2017 is well under way. We have received a record 57,391 applications for admissions, up nearly five percent from last year. The pool includes over 3,415 applications for Early Decision (i.e., from applicants willing to accept a binding offer of admission). Over 30 percent of the fall 2016 class will come from this cohort.
We are in the final stages (our offers will be posted Saturday, March 19) of admitting a highly talented group of high school graduates; less than 30 percent of those who have applied will be admitted. From the pool of those offered admission, we expect to yield an entering class of 3,500 students, by design our smallest (and most qualified) in over 20 years. During April, thousands of parents and students will visit the University and attend school and college open houses as they decide among offers of admission from us and other institutions. The competition for highly qualified students is intense in our group of peer institutions. Applicants make decisions based on the reputation of an institution, on their perception of the quality of the education and student experience, and on cost.
The cost of a private university education is high. Tuition and mandatory fees for this year at Boston University are $48,462. When standard room and board is added, the cost grows to almost $63,000.
And these costs will continue to rise if we fund the demands from four sectors: (1) increased salary and benefits costs for highly qualified faculty and staff; (2) new and renovated physical facilities (essential for a residential research university, as explained in my February 2015 letter); (3) the costs driven by increasingly complex and wide-ranging government regulations; and (4) our continuing commitment to improve academic programs and services for our students.
Even as we work to reduce costs across many of the operations of the University and carefully scrutinize our financial commitments to programs that are not core to our success, we are still left with a fundamental dilemma: our model for excellence of undergraduate education is defined by student experiences with faculty inside and outside the classroom; by cocurricular and extracurricular programs; by students’ interaction with their peers in the classroom; and by the living environment. None of these experiences improves with an increase in the number of enrolled students or with a decrease in the academic staff. For all our investments in information technology and digital learning systems that are used for administrative tasks and in the classroom, the best determinant of educational quality continues to be the interaction of our students with our faculty. The student-faculty ratio is still, in my view, the best measure of quality. And it is a measure that prospective parents, students, and ratings organizations continue to view as important.
Our strategy has been to carefully control the costs associated with University operations by managing staffing numbers and achieving efficiencies, while working to improve the quality of our education and research programs and critical services for our students. I believe there are myriad signs of our progress in doing this throughout the University, but we remain concerned about the ever-increasing cost to our students and their parents, as reflected in our annual tuition increase.
We have announced the increases in our tuition, mandatory fees, and room and board for the 2016–2017 Academic Year. These include:
- A 3.7 percent increase in our basic tuition rate (our lowest percentage increase in three years)
- A 2.4 percent increase in our basic room and board rate (the lowest in two decades)
- A $50 increase in our mandatory health and wellness fee to expand the number of behavioral health professionals in Student Health Services
Taken together, these increases amount to a 3.4 percent increase in the total cost of undergraduate attendance, our lowest percentage increase since Academic Year 1992–1993.
Student financial aid, in the form of need-based and merit-based grants and scholarships, is a critical part of the strategy to help students and parents afford a Boston University undergraduate education. In this academic year we expect to give more than $230 million in financial aid. Last fall 49 percent of our students received financial aid, with the average aid award being $26,500. For the fall of 2017, we are increasing the aid available to incoming freshmen by 3.4 percent; this increase in aid will be built into the budgets for the coming years as these students move through the University.
Most of our undergraduate aid is funded from our operating budget, not the endowment. Of the $230 million allocated to undergraduate aid for this upcoming year, only $7 million of this aid is funded by gifts or the endowment. As you know, our budget relies heavily on tuition, which made up 60 percent of our revenues last year. One of my hopes as we head toward the finish line of our first comprehensive campaign is that we can promote and nurture the culture of charitable giving expressly for financial aid, primarily for undergraduates. We are gradually gaining traction; over 77 new scholarships have been established as part of the Century Challenge. We still have a very long way to go before the endowment is a significant source of funds for undergraduate financial aid.
The majority (77 percent for fall 2015) of our undergraduate financial aid goes to students with demonstrated need validated through the CSS PROFILE application process that is used to compute a family’s contribution. Although we are making progress in addressing the full financial need of our Fall Freshmen—we were able to cover 89 percent of the demonstrated need of our freshmen for Fall 2015 through our grants and scholarships, Work-Study, and federal loans—the funding we have available is still inadequate to meet the full financial need of all admitted students. Consequently, the University distributes aid to an admitted student taking into consideration both the student’s academic achievement and his or her financial need. Students with stronger academic credentials will have a higher proportion of their demonstrated need met.
Our financial aid methodology has proven effective in creating socioeconomic diversity in our class. This Fall, 554 members (14 percent) of the class were Pell Grant recipients.
Our financial aid packages do require that our students with need take on debt, funded through the federal loan programs. A typical financial aid package includes $6,700 annually of federal loans for students. Actual debt level is typically higher, as families often will elect to finance more of the cost of college through loans.
The magnitude of federally sponsored student debt garners a lot of press coverage and appears likely to become a major issue in the presidential election. I want to share with you some facts about student debt at Boston University.
The figure of over $1 trillion in student debt that is cited by the media encompasses all loans taken out by students attending any of a broad range of post-secondary institutions. This includes vocational schools, undergraduate as well as graduate education, and graduate professional education. In FY2015, Boston University students—undergraduate and graduate—borrowed $247 million through federal loan programs available to students and their parents. This amount is equivalent to one-third of the net tuition for all students (net tuition is net of financial aid and does not include mandatory fees and the cost of room and board).
The total amount of federally sponsored loans taken out by Boston University students is similar to that of several of our peers, including Columbia, George Washington, and the University of Pennsylvania. It is considerably below the level of loans at the University of Southern California and New York University, where students and families borrowed more than $500 million in the same year.
It is important to note that at Boston University, undergraduate borrowing was less than one-third of this amount: $79.1 million or 16 percent of net tuition (the total tuition after subtracting BU financial aid). When mandatory fees and standard room and board are included in the cost of education, this percentage drops to less than 5 percent of all costs to our undergraduates. Clearly, only a small portion of the cost of undergraduate education at Boston University is financed by federal student loans. The median debt level for the 53 percent of May 2015 graduates who borrowed from any source was about $30,000, a bit larger than the debt level built into our financial aid packages.
Graduate and graduate professional students are taking on proportionally larger debt to finance their educations, with the $168.1 million in FY2015 split almost evenly between graduate students on the Charles River and Medical Campuses. This amounts to roughly the cost of two-thirds of net tuition. For some professions, such as medicine, student debt is very significant—averaging over $200,000 for graduates last year, and that is before the years of required internships and possible fellowships for specialties. This debt burden causes aspiring physicians to steer away from much-needed primary care roles to the higher-paying specialties.
Medians and averages do not tell the story of the impact of educational debt on individual students and on their careers and families. Students and parents make choices about how much debt to take on and may assume much higher levels of debt, especially in cases where the University cannot meet their full financial need. Debt from graduate school is layered on top of undergraduate debt constituting, according to our data, a large proportion of students’ overall debt.
We have all heard heartbreaking stories of students saddled with debt levels that are multiples of the averages quoted above. Out of fairness to all our students and the credibility of our process of aid distribution, there is little the University can do when these cases arise. Meeting full financial need would resolve some, but not all of these cases. The increase in financial aid budgeted for the coming year will help us meet a greater proportion of need for our best students and will provide aid to more students, again on the basis of academic performance. It will not eliminate student borrowing as part of a students’ financial aid package; until we can meet full need for all, removing debt for some is a luxury that we reserve for very special cases.
Currently, we meet full need without loans only for graduates of the Boston Public School System, as part of our commitment to the City and its citizens.
The need to repay loans does influence and limit our graduates’ life and career decisions for decades. But the vast majority of our graduates are paying off their loans and launching promising professional careers. National data on student loan defaults is reported for students three years after graduation. For all Boston University graduates (undergraduate and graduate) the default rate (the percentage of a given graduating class that has defaulted on loans) for graduates commencing repayment in Fiscal Year 2012 is 1.8 percent — which puts us in the middle of our peer group. [2] I believe any bank would be happy to hold these loans, especially at the interest rates of 4 to 5 percent (more than double those for 10-year US treasuries) that are being charged by the government. Student loans are an important long-term investment by our government, facilitating the self-financing of higher education.
Why is there so much concern around student debt? The answer is simple: the national default rate for the same categories of student borrowers (undergraduate and graduate) was 11.8 percent. Some institutions have default rates over 15 percent. The College Navigator tool maintained by the National Center for Education Statistics has the cohort default rates for each school. These very high default rates obviously raise concerns. The tendency, particularly in public discussions, is for a simple correlation to be drawn between college costs and high default rates. This is far too simplistic an explanation. The causes for high default rates are complex and specific to segments within higher education. A thoughtful analysis of student debt requires an understanding of the readiness of high school graduates entering college and the quality and effectiveness of the institutions they attend, as measured by retention and graduation rates of their students, as well as loan default rates for their students.
Boston University will continue to manage costs in an effort to make every dollar add value for our students, faculty, and research sponsors, while recognizing what is required to attract the talented faculty, students, and staff who make BU a special place for educating students who will justify the cost by their impact in the world.
As always, I am grateful for the efforts and engagement of everyone in our community as we work to make Boston University the best it can be. And I look forward to celebrating the accomplishments of our graduating students at Commencement, which will be upon us in a twinkling.
Sincerely,
Robert A. Brown
President