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March 24, 2006 > News > Tuition for incoming students rises 14 percent

Tuition for incoming students rises 14 percent

By Amber Obermeyer | Thresher Editorial Staff

New-student tuition and fees will be $26,974 next year, a 13.6 percent increase from what this year’s freshmen paid. Returning students will pay about 4-6 percent more than what they paid this year. Room and board for all students will be $9,590 next year, a seven-percent change that is similar to past increases.

Tuition, fees and room and board rates were approved at the March 8-9 Board of Trustees meeting and announced by President David Leebron Tuesday.

Freshman tuition will probably increase by a similar amount next year before leveling off, Leebron said. Leebron said he expects Rice’s tuition to be $5,000-6,000 less than peer schools’ in the long run. Next year’s freshman tuition will be about $7,000 less than other elite private universities’.

“There are some people who think because we are a high-quality institution, we ought to be priced with other high-quality institutions,” Leebron said. “That is not the present goal — it’s just that giving everybody a one-third discount in today’s competitive environment didn’t quite seem the right way to go.”

Leebron said that in the future, returning students’ tuition will probably increase by about 5 percent annually.

Rice’s financial aid budget will expand to cover the increased cost of attending, Vice President for Finance Kathy Collins said. Student Financial Services Director Julia Benz said Rice’s method for calculating a family’s expected contribution will not change, so students currently receiving need-based financial aid will not pay more.

Leebron said he thinks the percentage of accepted students who matriculate will not change substantially because of recent tuition increases. Rice received about 12 percent more applications this year despite last year’s 12 percent tuition increase, Leebron said.

“What we’re learning is that the biggest need is to get out there and market the school,” Leebron said. “We hear over and over again that the sticker price is not a predominant influence on people’s choice, partly because they want the best quality they can get and partly because it’s the after- financial-aid cost that drives decisions.”

Collins said tuition must increase because Rice’s costs rise every year.

The per-student, per-year cost of education is at least $60,000, Leebron said.

“Students pay less than half of that cost,” Leebron said. “That’s not to say that you want them to pay much more, but only to say that for the students who can afford the education, it’s not unfair to ask them to pay a little more of the burden.”

Financial aid and scholarships

Because of the tuition increase, about 38 percent of undergraduates received need-based financial aid this year — up from about 33 percent the previous four years , Benz said. About 78 percent of students receive some form of financial aid, including merit-based scholarships, athletic scholarships, student loans and outside scholarships, Benz said.

Last year, Rice changed its financial aid policy, replacing all loans with grants for students with family incomes of less than $30,000 annually. Leebron said the $30,000 cap may be increased in future years.

“Over the next five years, we are going to have to move the aggressiveness of our aid package further up the income spectrum,” Leebron said. “Our price is pretty low for people in the $30-50,000 bracket, but I think in the $50-100,000 income bracket, we’re going to need to be more competitive.”

In past years, about 9-10 percent of undergraduates had family incomes of less than $45,000 per year, but that number increased to 14 percent this year after Rice’s financial aid policy for low-income students changed, Benz said.

“We wanted to make sure that the message was clear that even if you have a very low income, Rice is affordable for you,” Benz said. “I think the message got out.”

Benz said she thinks Rice’s culture is friendly to students from all income backgrounds.

“The lower-income students hang in there and graduate at the same rate as everybody else, and that’s not true at other universities,” Benz said. “We can open the door and give them cash, but it’s what the community does that gets them through.”

Leebron said Rice’s demographics are similar to those at other private schools.

“The makeup of our student population actually is not different than our peers’,” Leebron said. “People think we have this very different student population because of the lower nominal price of our tuition, but it’s just not borne out by the facts. There’s some difference among the top schools, but it’s not as though the Rice population looks different than everybody else’s.”

About 45 percent of incoming students do not apply for financial aid, Benz said. Among these students, who do not report their families’ incomes to Rice, Leebron said it is possible that there are differences between Rice’s demographics and those of other schools.

“There could be [differences], but people tend to over-file [for financial aid],” Leebron said. “Our view is that if our education is priced, over the course of the four years, $25,000 less than the competition, that’s a significant difference.”

In February, Rice began a $100-million, six-year fundraising campaign for need- and merit-based scholarships. Benz said she expects tuition to rise faster than family incomes nationwide and that the scholarship campaign will allow Rice to continue to meet students’ need. The campaign will also allow Rice to keep offering competitive merit-based scholarships, she said.

Leebron said the value of Rice’s largest scholarships has and will increase with tuition in order to maintain the same net cost for students receiving those awards.

Room and board

Housing and Dining Director Mark Ditman said higher energy costs, especially a 40 percent increase in the cost of natural gas, led to the higher room and board rates for next year.

“You always have escalation in cost,” Ditman said. “It just is not viable to hold rates static. At times when people try to do that, instead of having small, incremental increases, they set themselves up for huge increases.”

End of article

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