Despite John Brown University’s fundraising and cost control efforts, tuition has increased an average of 4.69 percent in the last five years.
University President Charles Pollard has heard in meetings with parents and students that both cost control and quality enhancement are important.
“Sometimes those two things are diametrically opposed,” said Pollard.
The struggle between keeping costs low and quality high doesn’t have any easy solutions. The University is a complicated collection of programs and centers said Kim Hadley, vice president of finance and administration.
“We sometimes refer to our operations at the University as having three big boats,” Hadley said. “We teach traditional undergraduate, degree completion and graduate.”
Of the three, Hadley said the undergraduate program is the largest and most complex.
Expenses
The undergraduate program racked up a $30.9 million tab last year, according to Hadley. The biggest item in the budget was personnel at $20 million. Service and insurance contracts came in at a distant second with a $3.9 million total.
According to Hadley, the University closely manages its personnel costs by calculating the ratio of faculty and staff to the number of full-time equivalent students.
“It’s like a dentist, there are only two hands per person’s mouth,” Hadley said, describing the need for faculty and staff. “You can add a lot of technology and it increases the quality of [the] experience, but it doesn’t necessarily make you more efficient.”
A common indicator of college academic quality is the student to faculty ratio. U.S. News and World Report lists John Brown University with a 14:1 ratio, meaning 14 students to every full-time faculty. According to data provided by the University, that ratio has remained in the mid-teens since 2003.
Ouachita Baptist University in Arkadelphia, Ark., is currently listed with a 13:1 student to faculty ratio and the University of Arkansas in Fayetteville reports a 19:1 ratio, according to the U.S. News and World Report website.
In a salary study provided by the University, John Brown University’s faculty pay was just above the average university in the Council for Christian Colleges and Universities. The average annual salary for colleges in the council was $55,000 for the 2011-2012 school year, which range from below $40,000 for instructors to more than $60,000 for professors.
According to the study, John Brown University’s faculty pay ranked in the 89th percentile when adjusted for cost of living. That means University faculty are paid higher than 89 percent of other Christian council faculty after the adjustment.
Salaries and hourly wages are only part of the personnel cost to the University. In the fiscal year that ended this summer, paychecks accounted for 74 percent of the total employee cost, according to data provided by Hadley.
The other 26 percent comes in the form of benefits, which includes healthcare, retirement contributions and tuition remission. Benefit costs have outgrown payroll in the last nine years. In the fiscal year that ended in 2004, benefits only made up 22 percent of the total employee cost.
“We’re in the business of high-touch education,” Hadley said. “We have highly-skilled faculty and staff who are involved in that.”
The University employs the full-time equivalent of 290 employees in the traditional undergraduate program. Full-time faculty make up 79 of that number.
The $3.9 million expense for insurance and service contracts included a $2 million bill for food service and just under $450,000 for insurance premiums, according to Hadley.
Profit
The University usually receives more tuition dollars than it spends. The undergraduate program had a $785,000 surplus before accounting for depreciation from last fiscal year, Hadley said. The entire amount has been dedicated to projects on campus, such as the renovation of the J. Alvin Brown dormitory and development of the recently announced nursing program.
Last year, the surplus was split between scholarship endowment funds and on-campus projects and renovations. University President Chip Pollard and the cabinet carefully decide where to use the surplus money every year, Hadley said.
“We’re very disciplined about how we use it,” she said. “We try to be very careful. Not everything gets funded. We look at what serves the highest and best purpose for the institution.”
The graduate and degree completion programs had a combined surplus of $833,000 for the last fiscal year, which was designated as endowment for graduate building operations, a graduate reserve fund that is used to launch new programs, adult net revenue and other funds.
Hadley said that adult net revenue is a fund generated by adult program revenue that pays for new computer equipment and projects around campus. This year’s projects, funded by last year’s adult net revenue, included marking funds for new way finding signs, arming campus safety, renovation of the education division’s lobby in the Learning Resource Center and other projects.
Financial aid
Financial aid is another part of the University’s expenses. Although donors give toward scholarships and endowment funds, some programs (such as work-study) end up coming out of the budget.
Kim Eldridge, the associate vice president of admissions and financial aid, said about 40 percent of the student body is employed through the work-study program.
“We give work-study based on need, but we do make some exceptions,” Eldridge said.
The University automatically offers work-study to students whose families are below the 20,000 expected family contribution number.
The expected family contribution, or EFC, is a federal calculation that determines a student’s qualification to receive federal money for college. It is calculated based on a family’s income, assets and benefits, according to the federal education department’s website.
The University receives about $197,000 in federal money for the work-study program, said Sarah Cowles, an enrollment adviser in the University’s financial aid office. John Brown University’s work-study budget is about $574,000.
More scholarship money is provided through donations and endowment funds and does not affect the University’s budget.
April Moreton, director of development for University advancement, tracks the money that is given as tax-deductible donations.
“Last year, we awarded $2 million in endowed and funded scholarships,” Moreton said in an email statement. “These scholarships are a result of the generosity of friends, alumni, faculty, staff, parents, foundations and companies.”
Endowment scholarships are given from the money made by endowment fund interest and marked value gains. Funded scholarships are annual gifts that the University counts on and passes along to students in the form of financial aid.
Another source of need-based scholarship is the federal Pell grant, which awards money based on each student’s expected family contribution. University students received more than $2.5 million in Pell Grants, according to the University’s financial aid office.