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More Matter: A Forgotten Thanks
by Matty Van Meter, Student, Middlebury College (VT)
Published in The Middlebury Campus, February 28,
2007
In last week's Campus, a very important number was quietly mentioned
in passing: $73,000. This is the approximate annual cost to the College
of educating one student. For all the sticker shock associated with the
comprehensive fee, the really big number is not how much you shell out
to go to the College, but how much the College shells out while you're
a student: almost $300,000 for all four years. Now, that's a lot of money.
Private education is a very strange business. More so than most non-profits.
To begin with, a substantial number of the employees may not view their
employer as a company, and may even become offended if the suggestion
is made. The clients (you) are generally oblivious that they are living
in a company, which exists only because some people in the administration
are very good at getting people to give them tremendous amounts of money.
Indeed, the business survives almost exclusively on the beneficence of
a huge number of people, and not at all on the gross margin (that is,
the money they make on each student, which is negative). According to
the Budget Office's website, the price covers, in Middlebury's case, only
68% of the cost of the service, leaving a net annual loss per student
of about $28,000; a deficit of $70 million per year. This is huge. Imagine
if Coca Cola, or any other for-profit business, sold its product at 68
percent of cost. It wouldn't happen. For every dollar the College spends
on you, you pay back 68 cents.
Or do you? According to Student Financial Services 35-40 percent of students
receive financial aid, which is taken into account when calculating the
cost of education, but is an area in which the College loses a great deal
of money. In fact, according to the Budget Office's website, 16 percent
of the College's expenditures last year, or about $28 million, were for
financial aid, the largest single category after "instruction."
How is this sustainable? The Campus article made mention of a "hidden
scholarship," comprised of charitable donations. It may be more than
just a scholarship. Every year, enough people give money to cover that
$70 million gap between price and cost. They give to capital campaigns
to build buildings, give money to aid faculty research (most recently,
the much-debated Rehnquist chair), give money for financial aid and, especially,
give to the endowment. The Budget Office gives the total market value
of the endowment last year as $825 million. This figure is a little misleading,
since the College is not allowed to use any of that money. An endowment
is money given and invested with the stipulation that the principal (original
investment) will never be spent, only the return on the investment (interest,
etc.). Still, it is a lot of money selflessly given and comprised 18 percent
of the College's revenue last year. People in our administration work
very hard to keep this money coming in. It is a thankless job, but one
they are good at.
Why do these numbers matter? It is helpful to know, I think, that all
that we have here does not come out of thin air. We pay for some of it,
or our parents or grandparents do, but much of it, millions and millions
of dollars worth, is given to us as a gift. This is good to keep in mind
as we load our plates at the dining hall, or settle into a reclining chair
looking over the peeking spires and roofs of town to the soft curves of
the Green Mountains. It is good to remember that it will be in our hands
before long, to provide others with these gifts. Good to remember that
it is gifts, regardless of size, stipulation, or the name attached to
them, which allow us to live the lives we do here. And so I will say something
that most students do not: thank you.
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