PROVIDENCE, R.I. [Brown University] — With increased funding for financial aid, diversity and inclusion initiatives, student support, teaching and research infrastructure and more, the Corporation of Brown University approved a $1.1-billion consolidated operating budget for the University’s 2019 fiscal year.
The Corporation also set undergraduate, graduate and medical school tuition and fees for the 2018-19 academic year at its winter meeting from Feb. 8 to 10. For the coming year, undergraduate tuition will increase 4 percent, to $54,320. The budget also expands funding for undergraduate financial aid, one of the fastest-growing areas of Brown’s budget for many years, by nearly 11 percent to $135.4 million.
Provost Richard M. Locke leads the University Resources Committee (URC) in developing the recommended annual operating budget. The budget invests significantly in financial aid for students and extends Brown’s commitment to access and affordability, he said, while recognizing that tuition revenue is essential to supporting academic excellence across the University.
“We remain steadfast in our commitment to ensuring that a Brown education is accessible for every one of the exceptionally talented students admitted,” Locke said. “The investments in undergraduate financial aid and funding for graduate students extend that commitment and ensure that the best and brightest students from across the globe know that Brown is an affordable choice.”
That growth in undergraduate financial aid reflects the introduction of the Brown Promise initiative, which will replace loans with scholarships in University financial aid packages beginning in the 2018-19 academic year, and will be offset by additional annual giving revenue.
Tuition remains Brown’s primary source of revenue, comprising 65 percent of the University’s Education and General budget for FY19. While tuition for most doctoral and master’s degree candidates is the same as undergraduate tuition, the Corporation approved a shift to market-based pricing for master’s programs in computer science, data science, engineering, physics, and innovation management and entrepreneurship. An extensive benchmarking effort identified Brown’s tuition for those programs as well below the market for those programs. Tuition increases for each reflect employment markets in these fields and increased earning potential for graduates and will apply only to future students, Locke said.
The budget successfully balances the need for continued investment in academic excellence and Brown’s strategic priorities with the goal of working toward a balanced budget, Locke said.
“The investments outlined in this year’s budget reflect our unwavering commitment to academic excellence, generous support for our students, a diverse and inclusive community and a financially sustainable operating model,” Locke said. “It enables us both to advance our strategic priorities and keep the University on a path toward solid financial footing for the decades to come.”
Among other strategic investments, the approved budget adds funds for staff and infrastructure to support research activity at Brown. It also designates a larger pool of funds for merit-based compensation increases for faculty and staff and adds support for initiatives that strengthen the diversity of the undergraduate student body. It boosts support for graduate students by $3.2 million, adds funds to recruit and retain graduate students of color, and positions the University to fund its Presidential Postdoctoral Fellowship program on a sustainable basis.
The budget also includes measures expected to strengthen the University’s long-term financial health. In recognition of the University endowment’s long-term mission to provide budgetary stability and funding for future generations of Brown students, the budget extends a strategic effort to reduce the endowment’s annual funding contribution to the operating budget. The Corporation approved a reduction in the payout rate to better preserve the future spending capacity of the endowment and support Brown’s teaching and research mission over time. For FY19, the endowment will provide $124.4 million to the operating budget.
Due largely to the strategic decision in 2017 to reduce the endowment payout, the approved budget reflects a $5.4 million consolidated operating deficit. Locke says he is confident that by working collaboratively, the University can eliminate the operating deficit. Brown remains firmly committed to ensuring that the University is on solid financial footing over the next decade and beyond, he added.
The budget presented for the Corporation’s approval was developed by the URC, a committee of faculty, senior administrators, students (undergraduate, graduate and medical), and staff representatives, chaired by the provost. The full URC report is available online on the website of Brown’s Office of the Provost.
BROWN’S FISCAL YEAR 2019 OPERATING BUDGET
The University’s $1.1-billion consolidated budget comprises four main budget divisions:
- Education and General: $775 million
Instructional and academic programs exclusive of the Division of Biology and Medicine and the School of Public Health
- Biology and Medicine: $161.2 million
Biological sciences and the Warren Alpert Medical School
- Public Health: $51.6 million
Formerly part of Biology and Medicine, the Brown University School of Public Health became a separate unit in 2013.
- Auxiliary Operations: $113.5 million
Business operations that support the campus community, including dining services, housing, health service, and the Brown Bookstore. It is funded by revenues from those operations.
Tuition and financial aid
The budget for undergraduate financial aid will increase to $135.4 million, nearly an 11 percent increase. Over the last eight years, the undergraduate financial aid budget has increased by nearly 60 percent.
The URC strives to keep tuition increases as low as possible, even as tuition continues to provide the major share of revenue for the Education and General budget, approximately 65 percent for FY19. Undergraduate tuition and fees, approved by the Corporation, will be:
Tuition: $54,320 (a 4 percent increase)
Standard room rate: $9,120 (a 3.8 percent increase)
Standard board: $5,550 (a 6 percent increase)
Health fee: $886 (a 4.2 percent increase)
Student activities fee: $286 (a 4.4 percent increase)
Student recreation fee: $64 (unchanged)
TOTAL: $70,226 (a 4.1 percent increase)
This year’s budget increases graduate student support by $3.2 million with a 2.5 percent increase in graduate student stipends, plus additional funds for health and dental benefits. In recent years, Brown has increased the number of graduate student slots in strategic priority areas, while also raising graduate student stipends to more competitive levels. The University also has added dental insurance and child care subsidies, increased summer support for Ph.D. students in the humanities and social sciences, and introduced new Presidential Fellowships with additional support to attract the best graduate students.
Graduate tuition for most doctoral and on-campus master’s degree programs is the same as undergraduate tuition: $54,320 (a 4 percent increase).
Medical school tuition will increase by 5 percent to $61,244.
Academic support, diversity and inclusion
The budget includes $1.6 million in funding for a variety of initiatives, activities and resources that support academic excellence on campus as well as initiatives outlined in the University’s Pathways to Diversity and Inclusion action plan.
This includes funding to expand Brown’s participation in the QuestBridge program, which identifies high-achieving high school students from low-income backgrounds; for travel grants to bring prospective students from low-income families to Undergraduate Admission’s “A Day on College Hill” program; for faculty hiring and retention; for staff positions in the Title IX Office; and to support an English Learning Language specialist and academic tutoring through the Sheridan Center. It also includes $225,000 to fund three fellows in the President’s Postdoctoral Fellows Program, which has made important contributions to diversifying Brown’s faculty.
Brown’s endowment payout is governed by a disciplined policy that balances the need for current income with the important goal of preserving the endowment’s value to provide funding for future generations of students. This year’s budgeting process reflected the strategic goal of continuing to reduce the percentage of the endowment’s market value contributed to the annual operating budget. The policy recommends a payout in an amount in the range of 4.5 and 5.5 percent of the endowment’s 12-quarter average market value. Until last year’s reduction to 5.07 percent, the payout had been at the high end of the policy’s range.
For FY19, Brown’s endowment, with a market value of more than $3.5 billion, will provide $124.4 million (16 percent) of revenue for the Education and General Budget. The payout reduction to 4.9 percent helps to preserve the value of the endowment and ensures the University’s solid financial footing over the next decade and beyond.
Brown’s $3-billion BrownTogether fundraising campaign, launched in fall 2015, recently reached $1.64 billion, helping to build the endowment’s ability to provide additional revenue in future years.
Faculty and staff compensation
Salary increase pools of 3 percent for both faculty and staff, up from last year’s 2.75 percent increase, position Brown to maintain its market competitiveness for employees and to continue to address critical equity issues. The increase pools were determined based on a detailed analysis of market data, turnover statistics and recruitment activity, among other factors related to Brown’s competitiveness in faculty and staff compensation.
Consolidated budget revenue
Undergraduate tuition: $357.5 million
Graduate tuition: $185.5 million
Other tuition and fees: $39.9 million
Endowment: $142.4 million
Sponsored activities: $139.1 million
Indirect cost recovery: $47.1 million
Annual giving: $47.9 million
Auxiliary and miscellaneous: $143.1 million
Consolidated budget expenditures
Faculty compensation: $150.2 million
Staff compensation: $189.5 million
Student aid: $148 million
Graduate student support and other student compensation: $135.7 million
Facilities and debt service: $148.4 million
Operating expenses: $195.9 million
Sponsored research: $139.1 million