2008 Woodie Awards
Interview with CFO Jerry Boothby
Ben Kelly
Issue date: 2/4/05 Section: News
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Last week, The Guilfordian featured an article on the 2005-2006 budget, which proposes 5.9 percent tuition increases for traditional students. I interviewed Jerry Boothby, Guilford's Chief Financial Officer, for more details on the tuition increases.
Guilfordian: Why are tuition rates being raised?
Boothby: In 2004, the HEPI (higher education price index) rose approximately 4.6 percent. The CPI (consumer price index) rose 2.4percent. So, it costs more to run a college.
In 2001, the President's Report projected a 4 percent increase in tuition for traditional students for 2005-2006. Now, the rates have gone up to 5.9 percent.
Guilfordian: Okay, in the Strategic Plan
Boothby: ...It wasn't part of the plan, but in our projections we had done a projection of 4 percent. What we actually ended up was using the 5.9 percent overall.
Guilfordian: Why?
Boothby: When we looked at the total cost of all the things that we needed that are included in the budget we saw a gap. One of the things that we looked at for closing that gap was increasing from that assumption of 4 percent to 5.9 percent, along with some other things we had to do.
Guilfordian: So was increasing the budget a strategy to achieve solvency?
Boothby: The commitment was to have a balanced budget. When we looked at the strategic plan, what was in there for revenue and expense, we had a shortfall: if we did everything that we said we were going to, we were a million dollars short. So we said, if we changed the tuition from 4 percent to 5.9 percent, changed the financial aid package, and revised the estimate of the things they wanted to do in the strategic plan - it was a combination of revenue items and expense items that we had (to change) to get down to the balanced budget.
Guilfordian: So, why did you decide that the extra money would come from students' tuition, as opposed to alumni or another way of raising revenue?
Boothby: We looked at all of the other categories realistically, annual giving, alumni giving money - remember, at the same time we had to bring our spending down from the endowment - this year we're spending 7.5 percent, the trustees mandated us (to spend) 5 percent. That's $1.2 million less. That means somewhere else we needed to make up a million two.
Guilfordian: Why are tuition rates being raised?
Boothby: In 2004, the HEPI (higher education price index) rose approximately 4.6 percent. The CPI (consumer price index) rose 2.4percent. So, it costs more to run a college.
In 2001, the President's Report projected a 4 percent increase in tuition for traditional students for 2005-2006. Now, the rates have gone up to 5.9 percent.
Guilfordian: Okay, in the Strategic Plan
Boothby: ...It wasn't part of the plan, but in our projections we had done a projection of 4 percent. What we actually ended up was using the 5.9 percent overall.
Guilfordian: Why?
Boothby: When we looked at the total cost of all the things that we needed that are included in the budget we saw a gap. One of the things that we looked at for closing that gap was increasing from that assumption of 4 percent to 5.9 percent, along with some other things we had to do.
Guilfordian: So was increasing the budget a strategy to achieve solvency?
Boothby: The commitment was to have a balanced budget. When we looked at the strategic plan, what was in there for revenue and expense, we had a shortfall: if we did everything that we said we were going to, we were a million dollars short. So we said, if we changed the tuition from 4 percent to 5.9 percent, changed the financial aid package, and revised the estimate of the things they wanted to do in the strategic plan - it was a combination of revenue items and expense items that we had (to change) to get down to the balanced budget.
Guilfordian: So, why did you decide that the extra money would come from students' tuition, as opposed to alumni or another way of raising revenue?
Boothby: We looked at all of the other categories realistically, annual giving, alumni giving money - remember, at the same time we had to bring our spending down from the endowment - this year we're spending 7.5 percent, the trustees mandated us (to spend) 5 percent. That's $1.2 million less. That means somewhere else we needed to make up a million two.
