The Yale College term bill will increase 4.6 percent to $37,000 in the 2003-04 school year, Yale President Richard Levin said Tuesday.
The hike in the term bill, which comprises tuition and room and board, is the biggest increase since 1995, when the bill rose by 4.9 percent. And in a reversal from last year, the expected student contribution to tuition will also rise. Levin said the increase is largely a result of the smaller returns on Yale’s endowment in the 2002 fiscal year.
“The fact that the endowment is rising only very slowly and the gift revenues are off somewhat — the combination of those two things was significant,” Levin said.
Tuition in the 2003-04 school year will rise to $28,400, from $27,130 — an increase of 4.7 percent. The cost of room and board will increase 4.4 percent, from $8,240 to $8,600.
Levin also announced that the expected Yale College financial aid budget will grow to $40 million, from $34 million last year. Yale announced a new financial aid policy last year, intended to save students $13,780 over four years.
But this year, the expected student contribution will increase to $5,600 for freshmen and $6,050 for upperclassmen.
These figures remain below the values of expected student contribution in 2001-02, which was before Yale revamped its financial aid program. Levin said the increase is small — under 2 percent for freshmen and approximately 2 percent for upperclassmen — and is not quite as high as inflation.
When tuition increases, the difference between tuition and the expected contribution from parents increases as well, Director of University financial aid Myra Smith said.
“Part of that is covered by an increase in the student effort contribution, and the other is covered by an increase in financial aid,” Smith said.
Because family incomes and expected student contributions cannot keep pace with tuition hikes, the financial aid budget must fill the gap, Smith said. The current $40 million figure is an estimate because it is not yet clear what the student need will actually be in 2003-04, Smith said.
Levin said if students can only afford their current contribution, their grants will be increased next year.
While the tuition hike is the largest Yale has seen in several years, it is comparable to that at both Princeton and Cornell universities, who announced their new term bills last month.
Levin said Yale expected to have an average increase among competitors. He said the Yale administration thought the 4.6 percent increase would be reasonable.
Princeton’s term bill will rise 4.5 percent to $36,649 next year, while tuition there will increase 4.8 percent. Cornell’s average term bill for next year will rise to $38,159, with tuition increasing to $28,630, by approximately 5 percent.
In recent years, Yale and other Ivy League universities have attempted to cushion the blow of rapidly rising tuition and expenses. Yale has either had the lowest or tied for the lowest term bill increase in the Ivy League for the last five of six years, Levin said.
In the 2002 fiscal year, Yale’s term bill income accounted for a significant amount of the University’s operating budget. Meanwhile, the endowment — which provided 28 percent of the operating budget in the 2002 fiscal year — experienced only a 0.7 percent return on investments, bringing the market value of the endowment down from $10.7 billion to $10.5 billion last year.
But while many have noticed an increase in Ivy League tuition hikes in the past few years, public institutions are suffering more significantly. Last year, tuition at public, four-year institutions increased 9.6 percent on average.