Has an increase in administrative costs led to a decline in the percent of Cornell’s budget that goes to financial aid? That is the question that Ben Eisen ’10 asks in his article in Thursday’s Sun (“A Growing Administrative Staff Links to University Budget Increase”). Eisen does an excellent job of showing why the answer is not simple. I would like to thank him for bringing the complexities into view and then provide more information about the crucial set of questions he raises in the article.
Cornell’s administrative costs have increased over the past several years. Our 2007-08 financial plan, which is the document on which Eisen relied for his article, shows that administrative costs, as a percent of the total operating budget, rose by 4.5 percent between 1997-98 and 2007-08. That calculation applies to the entire university, including the Weill Medical College and the Weill Medical School in Qatar. If one looks at the Ithaca campus, the change in administrative costs over this period was 2.9 perecent, still a significant shift.
Eisen also notes a decline over the past 10 years in the share of the university’s operating budget devoted to “financial aid and student support.” Again, if we focus on the Ithaca campus, however, the figures change. As a percentage of the Ithaca campus budget, financial aid expenditures grew from 7.8 percent to 9.6 percent over the 10-year period. Our decisions to increase the cost of some administrative and support functions were not associated with a decline in the Ithaca financial aid budget. We provide better support for students now than we did 10 years ago. Included in that support are additional grants for very low income students to replace loan burdens, a more generous treatment of family assets in the financial aid calculation to assist middle-income students, enhanced stipends and the provision of health care for graduate students and expanded fellowship opportunities for many of our professional student programs.
Nonetheless, Eisen has raised essential questions that pre-occupy me as well. What have the principle drivers been of increases in administrative and support functions on the Ithaca campus? Growth occurred primarily in four areas: (a) fundraising, related to the capital campaign, (b) computer and information technologies, (c) the investment office and (d) expenses related to our response to government regulations. In the case of the campaign and the investment office, our expenditures will have a net positive effect on our budget. Investing in information technology and systems is critical to research, teaching and outreach — our core functions as a research university, and also produces a return in the form of discovery and innovation.
What about financial aid, one of the university’s top priorities? We have increased — both in total dollars and as a percentage of our operating budget — our support for financial aid. Cornell is one of relatively few universities in this country that remain need blind in its undergraduate admissions policy. We admit students regardless of ability to pay and commit ourselves to assist admitted students in meeting the cost of a Cornell education. Cornell will not retreat from this commitment. Could we, as have some schools, eliminate loans for students from families with incomes below $45,000 if we reduced administrative costs to previous levels? Unfortunately, the answer is “no.” Even if eliminating the entire 10-year increase in administrative costs would allow us to achieve this financial aid goal, the trade would not serve Cornell in the long-term. If we failed to increase our fundraising and investment staffs now, we would have less to spend on everything we hope to do in the future, including financial aid, because we would not enjoy the increases in our endowment that these expenditures have already brought and will continue to bring. In fact, our endowment has enjoyed an 18 percent compounded three-year return and a 25 percent return in the most recent fiscal year.
Am I arguing that we cannot and need not spend more on financial aid? No. We have made undergraduate scholarships and graduate fellowships a critical part of our capital campaign because we want to be able to provide more grant aid and reduce students’ debt burdens. We seek enough endowment to make changes in our financial aid program in the near term, and to continue increasing financial aid over the long term.
Fundraising, investment, technology and government mandates account for the majority of our increases in administrative costs, but Eisen is correct to note that there has also been an increase in the number of vice provosts since 2000. I have added vice provosts, rather than spend these funds on other university needs, because greater coordination across colleges is critical to achieving our research, educational and outreach goals and making Cornell the university to which the most deserving students want to come. The provost’s staff has helped enhance scientific collaborations across disciplines in the life sciences by assuming responsibility for coordinating and financially supporting cross-college recruitment of faculty, supporting graduate students and providing core research facilities that are shared across the entire university. Similarly, the vice provost for the social sciences has been charged with enhancing cross-college initiatives for the social sciences. The social sciences are spread across virtually all of our colleges. In too many cases we are not leveraging our cross-college research assets, or offering the level of curricular coherence that our students deserve. I believe that staffing changes in the provost’s office have helped make the whole of Cornell greater than the sum of its parts.
Nonetheless, the question about balance and trade-offs remains an essential one. Our decisions to add a position or incur an additional administrative cost are made with potential consequences in mind, but we are juggling hundreds of variables, related to one another in myriad and complex ways, and our decisions are not perfect. Right now, as in the past, we are asking our departments, colleges, and administrative offices to consider how they can eliminate redundancies and inefficiencies, integrate operations across campus, and increase effectiveness so that we can maximize our investment in our core missions: teaching, research and outreach. The provost’s office will not exempt itself from those considerations.
Biddy Martin is the Provost of Cornell University. She can be contacted at email@example.com. Guest Room appears periodically.