What is the school really doing with our money? It is a question students and parents of McDaniel College ask themselves every day. In this poor economy, people want their money to mean something. Many parents especially don’t want a single dollar to go towards something that doesn’t benefit their children’s education.
The staff members in the Administration and Finance and Financial Planning and Budget departments understand this fear and work hard every year to ensure the net revenue and expenditures emulate the best option for both McDaniel College and its students. Every cent of tuition/room and board goes into the operating budget which is largely responsible for the day to day necessities like salaries, food service, and technology.
Dr. Ethan Seidel, Vice President of Professional Economics and Business, explained the budget-making process as being very difficult and involving a lot of teamwork. “Typically the budget director sends out a survey in the fall, asking departments for budget requests. Then the director collects the requests and meets with the budget committee to decide what can be met.”
To be sure that all needs are met, more committees are called on to make budget requests. “President Casey has instituted a ‘Strategic Thinking Group’ with diverse faculty and staff representation,” said Kim Seeley, Director of Financial Planning and Budget. “These committees make recommendations on things such as tuition rates, fund raising initiatives, building and renovation plans – just to name a few.”
Dr. Seidel said, “The budget committee is made up of people like Dr. Casey, the Deans, SGA, etc. When the committee finishes they propose the budget to the Board of Trustees who then finalize the budget for next year.”
Every year the budget as well as the list of expenses is divided into eight categories. Without just one category, new ventures like the Green Terrace would be completely without funds. McDaniel depends on the efficiency of the operating budget every day.
Tuition along with Room and Board is responsible for over 78% of the college’s revenue, but there are, of course, other sources of funding. Grants are an integral part of McDaniel as they provide for specific department needs and help to pay for big projects like the recent renovation of Glar. To give an example, if a foundation wanted to assist the science department with better lab equipment, they would give McDaniel a grant to help pay for some.
Alumni and friends of McDaniel also contribute money and give back to the school through programs like Green and Gold or the Alumni fund. While the Alumni fund is a general pool for alumni to give gifts, Green and Gold deals exclusively help pay for athletic programs and equipment. Many of McDaniel’s athletic program is funded through such generous contributions.
The Alumni fund is largely responsible for providing scholarships for students as well as paying for unrestricted operating expenses. Without the Alumni fund, many students enrolled at McDaniel would not have the scholarships or financial aid they need.
Since McDaniel’s founding in 1867, a savings called the endowment fund has been growing through various resources like gifts or even left-over revenue. Because it serves as savings, each year the budget sets aside a strict amount to be taken out of endowment to pay for operating costs. “For instance, if someone gave $100,000 for endowment,” said Dr. Seidel. “McDaniel would only take out 5% out of that money every year so it can keep growing through interest.”
Operating costs don’t just apply to needs like salaries or equipment, but also cover summer camps or on-campus conferences. This category is called Auxiliary on the net revenue, and summer camps like Summer Academic Enrichment Program (SAEP) would not exist without it.
The fears from parents and students about the ways their tuition payments are used are not hereditary. They originate, rather, from the current uncertain economic environment. With unemployment on the rise, where does McDaniel stand?
About 6% of McDaniel’s expenses every year goes towards paying debt accumulated through borrowing and loans. Although it may seem like a lot of money, it is all being taken care of in small payments to make the debt more manageable.
No matter what, McDaniel College has prepared for the poor economy. “We have worked hard to control expenses and we are realizing cost savings through restructured debt, price locks on utilities, and reduced energy usage through installation of geo-thermal wells,” said Kim Seeley. “While our endowment has seen significant fluctuations, our returns compared to other endowments have placed above the 75th percentile over the past three years according to a national survey by National Association of College and University Business Offices (NACUBO).”
One of the biggest worries of many students though is whether their tuition is going towards big projects like the new stadium instead of their education. “It seems like a lot of money go towards sports at McDaniel,” said junior Logan Otremba.
It might ease the mind to know that those big renovations don’t come from the budget or not even from borrowed money but actually from big donations. Tuition, in other words, is helping to pay for only the college essentials.
The renovating paid for through tuition are minor projects like the new carpet in Ensor. Also, a lot of costs went into replacing furniture and painting in Whiteford residence hall. Every year McDaniel tries to renovate at least one thing using the money from revenue.
Between the net amount of revenue and expenditures though, it leaves a spare $54,000. McDaniel actually spends that money on any remaining departmental needs that weren’t fulfilled in the budget whether it is new technology or project funding.
Last year Dr. Roger Casey announced a tuition increase of $2,000 for the 2011 – 2012 academic year of McDaniel College. That is the second year in a row that tuition has increased. For many parents and students, it has been hard to understand the need to increase the tuition so frequently.
Many students firmly believe that their tuition is a result of non-educational projects. “I absolutely hate the decision to raise the tuition again,” said senior Ben Azat. “I feel like it is a result of the new GLAR.” Out of all the reasons why tuition was increased, big projects was not one of them.
“The college works towards setting a total tuition package that is competitive and allows us to cover fixed costs and fund the initiatives that are most important to providing the highest quality education,” said Kim Seeley. “We strive to meet the financial needs of our students through a very robust financial aid program. Ninety percent of all students receive some form of financial assistance through academic scholarships, need-based aid, and student loans.”
Simply, the operating costs of the past two years far exceeded the amount of tuition being given at the time so it had to be increased no matter what. Although this is always disheartening news, students and parents aren’t the only ones making sacrifices for the college. Faculty and staff have not had any sort of pay increases for the past two years.
McDaniel College cares about its students, using a lot of its revenue to provide scholarships and financial aid through endowment, gifts, and grants. Despite the tuition increase, this amount of hard work and commitment to students is hard to find anywhere else.