If he didn’t have to worry about college debt, junior Boyan Kukov would be an art or English major.
But instead of authoring the next great American novel, Kukov chose to double major in physics and applied math. He said he picked a Science, Technology, Engineering and Math (STEM) major because it will get him a financially stable job, which he said he hopes will allow him to pay off the $10,000 to $15,000 of debt he expects to incur while at Loyola.
“[If I didn’t have to worry about debt] I wouldn’t be as stressed out and anxiety ridden,” said the 20-year-old. “I would be able to look at the major as acquiring the knowledge itself and not caring about where it’s going to lead me. If I didn’t have money as a stimulus I would just look at physics and try to understand it for myself instead of where it can be applied in the industry.”
Kukov isn’t alone on two accounts. First, more than 70 percent of students will graduate with debt — about $35,000 for the average 2015 graduate, according to Edvisors.com, a website about paying for college. Second, a little less than 25 percent of students said their college debt impacted their career choices, according to a 2011 Pew Research Center study.
Ballooning tuition costs at Loyola — from $60 in 1870 when the school was founded compared to just under $40,000 today — aren’t expected to deflate anytime soon. National college tuition and fees have gone up 1,120 percent since 1978, which is four times faster than the consumer price index, the average amount prices have risen for goods and services, according to a 2012 article in Bloomberg Business.
As students prepare for another tuition increase for the 2016-17 academic year, the question isn’t just how much, it’s why.
HOW IT HAPPENS
Loyola’s budget — $559 million in 2015 — which determines whether or not tuition will increase, is put together by the Budget Review Team. This team consists of the Interim President John Pelissero, Senior Vice President for Finance Robert Munson, other senior vice presidents, provosts and several more administrative employees. Once the budget is finished it is submitted for approval to the Board of Trustees, normally at the December meeting.
Competition drives the market and the same is true in higher education. Munson said competition among universities is one factor in determining how much tuition will be, but it isn’t the only factor and it isn’t a matter he takes lightly.
“We’re not sitting back, trying to increase tuition so that we can spend more money,” said Munson. “And that’s difficult for me to explain because I watch the university’s money as tight or tighter than I watch my own money.”
Munson said each school is trying to figure out what the others are going to charge. Universities don’t want to increase tuition too much and risk losing students to a competitor. When compared with local universities or other Jesuit institutions, Loyola is near the middle of the pack in both groups. Of local colleges, the University of Illinois at Chicago is the least expensive — $13,670 for in-state students for the 2015-16 academic year — and the University of Chicago is the most — $50,193 for the 2015-16 academic year.
However, competition doesn’t always work in the consumer’s favor.
Pelissero said universities have to price themselves in a way that also denotes the institution’s value. If tuition is much lower than that of other universities, students and parents might think the school is not as good as its competitors, he said.
“It’s an interesting set of challenges just to know how to ensure that you’re charging appropriately while also being aware of how you’re perceived in the marketplace,” said Pelissero.
It’s a practice students such as Kukov are aware of.
“Everyone has high tuition because everyone else does,” Kukov said.
About 65 percent of Loyola’s revenue comes from tuition and fees, according to Munson, making the university a tuition-dependent school. As a private university, Loyola doesn’t receive government funding to help offset its costs, outside of programs such as the Illinois Monetary Award Program (MAP) Grant, Munson said. The bulk of Loyola’s revenue is used to pay the staff which consists largely of professors whose degrees require high compensation.
The average Loyola tenure faculty member makes about $70,000 with the average non-tenured, full-time employee making about $60,000, according to Pelissero.
In order to attract and retain the best professors, Pelissero said Loyola offers about 3 percent annual raises.
However, tuition increases can’t be blamed entirely on faculty members, according to a 2015 article in The New York Times. The Times reported that on average, faculty members aren’t paid much more than they were in 1970, whereas university administration costs have grown by 60 percent between 1993 and 2009.
This may, at least in part, be because of the increasing amount of services provided to students such as wellness programs, academic advising, tutoring and career centers, all of which Loyola has invested in over the last decade, Pelissero said.
There are a few ways Loyola works to make tuition more affordable to students such as offering more financial aid, working to help students graduate in four years as opposed to five or six and offering federal work-study to qualified students.
Of the 2013 first year class, 96 percent received financial aid such as scholarships or grants. The largest source of non-loan money for students comes from the endowment. When the school is given general money for scholarships, it is put in the endowment — which is currently at about $500 million — and is never spent. Scholarships are from the interest or stock earnings the money produces.
In addition to giving scholarships, Pelissero said Loyola reworked its requirements to help students graduate in four years because only 48 percent of Loyola students were doing so in 2008. Time Magazine, in 2013, reported that less than 40 percent of college students graduate in four years.
The university changed its graduation requirements from 128 credit hours to 120 and allowed more flexibility when completing major requirements to help students graduate faster. Pelissero said students are equally ready to enter the workforce since they changed the requirements and the four-year graduation rate is now at 65 percent.
Loyola also offers work-study opportunities, which are federally funded part-time jobs for students who demonstrate financial need.
Sophomore Rachel Goldense said she’s had some trouble finding a work-study position even though she qualifies for one. The Phoenix reported in September that because of city-wide minimum wage increases, which Loyola adopted, the university is hiring fewer students to compensate for the higher wages.
IS IT WORTH IT?
Pelissero said a social consciousness kicks in during budget meetings, which makes members of the review team question if they are doing the right thing or not.
“The value that comes with paying close to $40,000, if you’re paying the official sticker price of the university, is that we’re providing the premier undergraduate education in the Chicago area,” Pelissero said. “We’re doing it from a Jesuit pedagogy in which the students are being taught to be good analytical thinkers, to care for themselves and others, to care for the planet, to have a social justice ethic about themselves, so the knowledge, the skills and the values that students develop here, we believe, is something that demonstrates the value of the amount that’s charged for tuition here.”
Alumnus Anne Borchardt, who received a bachelor’s degree in nursing from Loyola in 1975, said she isn’t sure if she would go to Loyola again if she had to pay today’s prices.
Borchardt was able to pay her tuition and other expenses with scholarships and summer jobs, something she said is impossible to do now.
“I don’t know that I could afford to go to Loyola now,” she said. “I probably couldn’t because I wouldn’t want to end up with all that major debt.”
Although she loves the school, she said she wishes tuition wasn’t so high. Goldense agrees.
The 19-year-old English major said she expects to graduate with $30,000 to $40,000 of debt. She said she’s beginning to wonder if she should have gone to a state school in Minnesota, where she is from, to keep costs down.
“I like to think Loyola is worth it,” she said. “It is a good school and I do really enjoy it, but it has a hefty price tag.”
Although college is expensive, millennials with bachelor’s degrees get higher earning positions than their non-degree holding peers. Degree-holders earn about $17,500 more per year, according to a 2014 Pew Research Center study.
That being said, it is likely tuition will increase for the 2016-17 academic year, Munson said. He said he doesn’t know how much it may increase because the budget hasn’t been approved.
Robert Parkinson, Jr., chairman of the Board of Trustees, declined to comment on this story.