Wash. U. tuition and funding explained
With the current annual cost of tuition to attend Washington University at $50,650, students can’t help but ask two questions: Why is it so high, and where does all of this money go?
There are several factors that determine the cost of tuition, including the budgets and expenses of the four undergraduate schools as well as consideration for affordability. The tuition then covers a variety of expenses, the largest being faculty compensation.
How the University is funded:
According to Chief Financial Officer Amy Kweskin, tuition revenue only makes up 13 percent of Washington University’s total annual revenue stream, which adds up to approximately $370 million per year of the $2.87 billion total. The largest portion of the University’s revenue comes from the School of Medicine through their patient care and research funding, which provides nearly half of that revenue at $1.2 billion last year.
“When you look at the big picture, you have to remember the medical school is part of the total University. So the medical school is going to provide the largest portion of the University, in sort of their patient care work that they do, their patients and their relationship with [Barnes Jewish Hospital],” Kweskin said.
The second largest revenue stream comes from grants and contracts (a number totaling $513 million last year) which mostly stem from research, some of which is done on the Danforth Campus, but a majority of which takes place at the School of Medicine.
In terms of solely the Danforth Campus, tuition makes up a larger portion of the revenue stream than for the University as a whole. According to Kweskin, 60 to 65 percent of the revenue comes from tuition with a smaller proportion of money from donors that can be used as gifts throughout the year or invested in the University’s endowment.
Last year, the University received over $286 million in endowment spending and $161 million in non-endowed gifts.
How the cost of tuition is determined:
To then determine the cost of undergraduate tuition, the University looks at several factors; the first of which considers the expenses and budgets of the four undergraduate schools.
“We think about what is it they’re going to need for the coming year, what does their budget look like, what do their expenses look like [and] how can we cover some of those expenses,” Kweskin said.
The University has to also consider the cost of tuition in relation to affordability for students and competitor schools, including how much financial aid Washington University would need to offer a student in order to receive their admission.
Provost Holden Thorp believes that the University is worthy of comparison to its competitor schools in terms of tuition.
“If you think of our peers as the other excellent private research universities in the country, we’ve very comparable in terms of our tuition, what we call our sticker price,” Thorp said.
What tuition is spent on:
When it comes to operating costs, compensation for staff and faculty ends up being the greatest expenditure. Figures from last year show that the University spent $1.7 billion on instruction alone, although some of this amount went to the School of Medicine.
According to Kweskin, the University must spend a lot of money on faculty because they are essential to the running of the University.
“If you think about what we do, we’re a people business. We’re faculty; we’re staff—your student advisors, your librarians. If you think about all the people it takes to run the University, compensation ends up being a large expense,” Kweskin said.
The University also spends a lot of its resources on research and academic support.
Last year, the University spent $474 million toward research and $175 million toward academic support.
The University also takes institutional support, student services, auxiliary services expenses and the costs associated with simply running the University into consideration.
“There are the simple things, keeping the lights on, making sure there’s heat in the building, [that] you guys can get to class. Really the operating expenses to keep the place running,” Kweskin said.
The University additionally has to consider the cost of financial aid, and although it does receive gifts for financial aid, a lot of resources stem from the University itself.
“Primarily, resources from the University help fund financial aid. So financial aid is something we’re thinking about,” Kweskin said.
According to Thorp, Washington University is highly competitive for top affordability when compared to other universities.
“In terms of aid, financial aid, we do very well compared to most of our close peers. There are a few schools at the very top—Harvard, Yale, Princeton and Stanford—who have very large endowments for undergraduate financial aid, so they go above what we would consider meeting 100 percent of need,” Thorp said. “Among the other private schools that we compare ourselves [to], we’re very comparable in terms of financial aid as well.”
The University also funds efforts to increase the percentage of the student body that is eligible for a Pell grant, which has grown in recent years.
“We’re in the process of dramatically increasing the number of low-income students, particularly those who received Pell grants. We’ve had 13 percent the last two classes. And we’re going to do that two more times, and then, the whole of the body will be at least 13 percent Pell eligible,” Thorp said. “We’ve made some gains in middle-income students who get some aid but not everything. All those things are well under way, so in terms of making more financial aid available [and] in terms of creating more affordability, we’re very aggressively pursuing that.”
The cost of tuition has typically risen each year, and for the past couple years, the rate of increase has been a little over 3.5 percent. Tuition increases can be attributed to the increased cost of living.
“If you think about it, we have to keep up with the increasing cost…compensation is a very large component,” Kweskin said. “We want to be able to keep the staff that we have, the faculty we have, to be able to give them merit increases [and] raises. The cost of healthcare for people goes up, [as do] various expenses associated with running the University.”
Increases in tuition also result in more funding being set aside for financial aid.
“We’ve also put a lot more funds toward support for financial aid and making sure that we’re being accessible,” Kweskin said.
A tuition panel will be held in late November, where Washington University administrators, including Chancellor Mark Wrighton, Thorp and chief financial officers, will speak in more detail to students about the University’s finances.
Kweskin will present on how the University receives and spends revenue before Director of Student Financial Services Mike Runiewicz discusses financial aid and its process.
The tuition panel will be held before the meeting with the board of trustees’ university finance committee.
“What we try to do is have the meeting before we meet with our university finance committee of our board. And they’ll approve a range that we can think about for tuition. We’ll talk with the students first, and then we’ll meet with the board, and eventually the tuition gets set at the January executive meeting for the board of trustees,” Kweskin said.
Students are highly encouraged to attend and ask questions at the tuition forum.
“[The students] can learn a lot about how the University is financed, and all of the people who they would want to have questions of: me, the chancellor and Amy Kweskin, the admissions and financial aid folks will all be there. And it’s a great opportunity to have a dialogue about college access in America and college access at Washington University in St. Louis. And I always look forward to it,” Thorp said.