QUESTIONS AND ANSWERS
ABOUT CALTECH’S BUDGET, TUITION AND FEES, AND HEALTH INSURANCE
The following 10 questions concern the Institute's General Budget, and
are provided to give you context for your specific questions about Student
Affairs. If you prefer, you can skip directly to the
Student Affairs Q & A.
When you refer to the Institute’s General Budget, what exactly do you
mean?
- The General Budget pays for the basic operations of campus, and is
supported by sources of funds with no restrictions on them, such as
tuition, overhead on research grants, certain gifts, and some of our
endowment payout. In years when the Institute receives one-time
windfalls--such as unusually large bequests from donors--the General
Budget is balanced. However, if we take away those one-time funds, we
are spending about $28 million more than we are receiving in support of
the General Budget.
- The General Budget pays for everything that is not covered by our
restricted grants and awards from the Federal government, foundations,
and private individuals who earmark their funds for specific purposes.
So the General Budget pays for most salaries and materials and for
services such as administrative support, electricity, maintenance,
office supplies, and the Institute's contributions to all employee and
student benefits.
What is the "structural deficit" in the General Budget?
- Simply put, the Institute spends more out of the General Budget than
it receives. As Dr. Baltimore pointed out in his memo to the campus,
this is a long-standing problem that has been an inherent part of the
Institute's operations for many decades. In the past, Caltech measured
its bottom line mainly by how much cash it had across all funding
sources, such as General Budget, Restricted Funds, and Endowment Payout.
With the latter two sources now inherently in balance, any overspending
of the General Budget results in a direct loss of cash. We cannot
continue to do business in the old way.
How can we seem so rich and so poor at the same time? We're in the
middle of a campaign to bring in more than $1 billion. Why do we still have
budget problems?
- The majority of the money raised for the campaign cannot be used for
the basic operations of the campus. Campaign funds are typically
restricted to use for research support, construction, or investment in
the Caltech endowment. While the campaign does increase the endowment,
and hence the endowment payout (currently 6.5 percent), the impact is
not the full amount of the gift, but rather just the payout, and only on
the gifts that are unrestricted. Exceptions are some gifts--such as
endowed professorships--that directly relieve the General Budget.
How big is the problem?
- We have about a 5.6 percent ($28 million) deficit in the Institute's
overall budget of $498 million.
What factors contributed to this budget problem?
- For one thing, recent lower investment returns have meant decreasing
endowment payouts for several years. Secondly, tuition income at Caltech
is very small compared to our peer institutions. And, the Institute has
an aging infrastructure. Because we are a small institution, we have
limited economies of scale, plus there are government caps on
administrative costs, as well as other limits on research-cost
reimbursement.
How are decisions about the budget being made?
- The Institute Administrative Council (comprising the president,
provost, faculty chair, division chairs, vice presidents, and several
other senior administrators) met in September 2005 to conduct an
in-depth review of the causes and effects of the budget imbalance, and
to consider how best to produce a stable, balanced budget by the 2008
fiscal year. By unanimous agreement, the group collectively crafted a
sequence of actions that called upon every segment of the campus--in
fact, every person on campus--to contribute to the solution. Every
division, department, and office on campus was discussed, and nearly all
were studied by selected members of the faculty. It was of the utmost
importance to the administration that no one area or segment of the
Caltech community be asked to shoulder an unfair burden in this effort.
- Generally speaking, solutions to the budget problem fall into three
categories: (1) new revenues, (2) administrative cost reductions, and
(3) academic/research support cost reductions. Our budget plan includes
solutions in all three categories.
Will Caltech's budget burden disproportionately be shouldered by its
lowest-income employees and/or students (and parents)?
- No one area or segment of the Caltech community has been asked to
shoulder an unfair burden in this effort. Every member of the community
will be asked to make some sacrifice.
I've heard that one of the ways Caltech plans to reduce the budget
deficit is to try harder to "recover full costs for services." What exactly
does this mean? And if it's so important, why wasn't it done before?
- Caltech has long subsidized many essential expenses--among them
parking, health insurance, and various services--with funds from its
General Budget. And it will continue to do so, albeit at a somewhat
lower rate. For many years, these subsidies were covered by unexpected
donor gifts or bequests to the endowment, by income from the sale of
Institute property, or by borrowing. Unfortunately, we no longer can
support such services at the current level. Now, maintaining our
desirable environment and our position in the scientific community
requires balancing the books.
If we have budget problems, why are we building new laboratories?
- Often these are built with donor funds earmarked for such purposes.
More importantly, Caltech is committed to remaining the world's premier
research university, producing greatness in its graduates and extending
the sum of human knowledge through discoveries in every area of academic
study we pursue. Our research requires not only top-flight faculty,
students, and staff, but also state-of-the-art facilities. We are
entering an era where institutional nimbleness and an embracing of
change are needed if we are to remain within the select group of leading
academic institutions. To stop building would put us at a serious
disadvantage with our competitors for federal research grants.
If the budget is in such bad shape, why have we hired high-profile
architects such as Rem Koolhaas and Thom Mayne to design new campus
buildings?
- The Institute intends to be around for a long time, so it only makes
sense to construct buildings of enduring quality. This is not to say
that we should build expensive buildings just for their own sake. First
and foremost, these structures must allow Caltech faculty and students
to do their scholarly work with the best tools and research facilities.
As it turns out, great architects are great problem solvers. They can
figure out how to meet our faculty's and students' needs in ways that
not only please the eye, but also give maximum value for the budget.
Finally, we have a responsibility to our students and to our community
to create a campus that is inspiring and conducive to a focus on
research and education. In the long run, excellence is always a good
investment. It is not the Caltech way to be average or mediocre in any
enduring activity.
-
How large is the Student Affairs’ General Budget?
- There are two financial operations involved in the Student Affairs
budget. Some of our offices and programs are supported by the
Institute’s General Budget and some are Auxiliaries (including Housing,
Dining, the Bookstore, and Campus Life) that raise their own revenues
and pay their own expenses. The General Budget portion of Student
Affairs was $9.6M in Fiscal Year (FY) 2005, excluding faculty salaries
and benefits.
How much was cut from the Student Affairs’ General Budget?
- Both the General Budget and the Auxiliaries are being reduced. The
total reduction in the Student Affairs' General Budget is $1.6M byFY2008;
in addition, the Auxiliaries unit is committed to giving the Institute’s
General Budget $3M in cash annually by FY2008. In FY2006, the Student
Affairs General Budget is $8.4M, a reduction of $1.2M (12 percent). By
FY2008, the Student Affairs General Budget will be $8.0M, having
sustained a 17 percent reduction in its operating budget over three
years.
How much of the Student Affairs’ General Budget is for salaries and
benefits?
- Approximately 80 percent of that budget goes to salaries and
benefits. More than half of Caltech's total expenses are for salaries
and benefits.
How was it decided what to cut?
- We looked at the data, including student usage of our offices and
programs, cost per program, and office and program costs per student.
The resulting analysis showed that both undergraduate and graduate
students had heavily used Student Affairs’ offices and programs in
recent years. Because there were no obviously unpopular or ineffective
programs, we established priorities. Every office was affected.
How many eliminated/reduced positions will there be in Student
Affairs?
- In FY2005, we had a total of 96.85 full-time employees; by FY2008,
we will have 80. To date, the following positions have been affected. By
"affected," we mean that in some cases, currently vacant positions will
not be filled (i.e., attrition); in other cases, employees have been or
will be laid off. Where there is a notation in parenthesis, this refers
to the effective date of the action—e.g., 06/06 means the position will
be eliminated or the hours will be reduced in June 2006. We have only
shown positions slated for elimination through layoffs if the people in
them have been notified. Position reductions will continue in FY2007.
-
- Positions eliminated through attrition and layoff
Academic Support and Planning, administrative assistant
Athletics and Recreation Programs, associate director
Athletics and Recreation Programs, director of sports information
Athletics and Recreation Programs, coordinator
Career Development Center, associate director
Career Development Center, career counselor
Career Development Center, counseling intern (06/06)
Dean’s Office, department assistant (03/06)
Financial Aid, receptionist
Men’s Glee Club, lecturer/director (06/06)
Minority Student Education, assistant director
Registrar’s Office, department assistant
Study Abroad Office, department assistant (03/06)
TACIT, associate director (03/06)
-
- Positions reduced to half-time status
Financial Aid, analyst
Women’s Center, assistant director (07/06)
Women’s Center, administrative assistant (07/06)
What kind of services and programs in Student Affairs are being cut?
- All offices will be affected, by shorter hours and/or perhaps slower
turnaround time for services. Here is a breakdown, by department.
-
- Athletics, Physical Education, and Recreation
- Drop SCUBA class
- Limit facility hours during academic breaks
- Drop men’s intercollegiate golf team (05/06)
- Reduce teams’ out-of-area travel (06/07)
- Limit hosting of basketball tournaments (06/07)
- Reduce pre-season and break stay-overs for students (06/07)
- Investigate reducing additional PE and recreation activity classes
-
- Career Development Center
- Eliminate Japan Internship (may be funded by an academic division)
- Reduce availability of counseling appointments and drop-in advising
- Reduce number of speaker and panel presentations
- Reduce administrative and financial support for student and postdoc
groups, including GSC, Postdoc Association, Caltech Project for
Effective Teaching, Biotech and Consulting Clubs, premed club, campus
presentations, medical school visits
- Eliminate Resumania, Emerging Leaders program, and Alternative
Spring Break for Navajo Nation
-
- Creative and Performing Arts
- Reduced TACIT productions to one this year
- Consolidate Men and Women's Glee Clubs under one Director
No loss of programs, but free voice lessons to Glee Club members will no
longer be offered
-
- Deans’ Offices (Graduate and Undergraduate)
- Reduce support for orientation and commencement activities
- Eliminate travel subsidies for incoming graduate students (FY2007)
-
- Fellowships Advising and Study Abroad Office
- Reduce support for library resource and webpage updates and
revisions
- Reduce office hours
-
- Financial Aid
- Slower turnaround time to package awards and address special cases
-
- Minority Student Education
- YESS program placed on hold because of staff reductions
- Reduce outreach and programs for current undergrads and grad
students
-
- Registrar’s Office
- Increase turnaround time for official transcripts, degree and
enrollment certifications, as well as response to requests for data and
statistics
- Slow the development of online functionality, e.g., degree audits
-
- Undergraduate Admissions
- Roll back recruiting, publications, travel, and outreach
- Reduce Pre-Frosh Weekend to 2 days (FY2006 only)
-
- Women’s Center
- Eliminate 3 academic support programs--Weekly Graduate Women’s
Support Group, Undergraduate-Graduate Mentoring Program, Alumnae-Student
Networking Conference
- Eliminate 4 personal development support programs--Health and
Wellness Series, Reel Women’s Series, Women’s History Month, and Healthy
Relationship Series
- Reduce maintenance of services, e.g., our specialized libraries,
website, and lactation room
- Eliminate weekly e-mail calendar to 550+ subscribers
-
- Special Programs
- Eliminate Student Affairs’ funding of Family Night (FY2006)
- Eliminate Workers’ Compensation funding for Child Care Centers
(FY2007)
-
- New Fees
- Increase fees for undergrad and grad applications
- Proposing new faculty and staff fees in Athletics
What is the budget situation for the Auxiliaries (e.g., Housing,
Dining, Bookstore, Campus Life)?
- In FY2006, Auxiliaries estimate total revenues of $28.5M and total
cash contributions to the Institute’s General Budget of $1.4M. By
FY2008, we estimate total revenues of $31M and cash contributions of
$2.7M.
How many positions were eliminated in Auxiliaries?
- To date, the following positions have been affected. By "affected,"
we mean that in some cases, currently vacant positions will not be
filled (i.e., attrition); in other cases, employees have been or will be
laid off. Where there is a notation in parenthesis, this refers to the
effective date of the action—e.g., 06/06 means the position will be
eliminated or the hours will be reduced in June 2006. We have only shown
positions slated for elimination through layoffs if the people in them
have been notified. Eliminated positions include those lost through
attrition and layoff.
-
- Campus Life, business administrator (03/06)
- Campus Life, special projects coordinator (03/06)
- Caltech Bookstore and Wired, 2 shipping/receiving clerks
- Caltech Bookstore, buyer
- Caltech Wired, director
- Catering, delivery person
- Dining Services, executive chef
- Dining Services, cash management
- Dining Services, 2 bakers
- Dining Services, 2 managers
- Dining Services, general helper
- Housing, 16-20 custodians (06/06)
- Housing Maintenance, 3 mechanics
- JPL Store, general merchandise buyer/webmaster
- JPL Store, receiver
Which services and programs were eliminated or changed in Auxiliaries
that resulted in cuts or increased revenue?
- Increased rental rates on Caltech-owned properties
- Increase Board program from 5 to 7 days (FY2007)
- Eliminated linen service in Undergraduate Houses
- Eliminate biweekly cleaning of undergrad student rooms (06/06)
- Charge students the full cost for damages/repairs in the Houses
- Outsourced 80 percent of Caltech bake shop production
- Increased dining hours, thereby increasing both revenues and
expenses
- Increased pricing in all dining venues
- Shortened Coffee House hours by opening at 10 pm instead of 9 pm and
reduced days of operation from 7 to 5
- Enhanced business with Westridge School to increase revenue
- Centralized buying and receiving for Caltech Bookstore and JPL Store
- Increased cash management
- Increased financial management
- Reduced financial support for Campus Life
- Propose campus-wide fees for ID cards
What's going on with the schedule for renovation of the South Houses?
Overhaul Project Summary: Milestone Dates
o July 2004 – June 2005 Design Phase
o June 2005 – July 2005 Move to Temporary Houses & Substantial Clean-up
o July 2005 – December 2005 Hazmat Abatement & Demolition
o October 2005 – November 2006 Construction Phase
o November 2006 – December 2006 Caltech furniture, finish, clean-up
o December 1, 2006 - December 15, 2006 Student Affairs / Housing final walk-thru
o December 15, 2006 – January 2, 2007 Students move in
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TUITION AND FEES
What will it cost to attend Caltech in 2006–07?
- Please visit
http://www.finaid.caltech.edu/expenses.html.
What percentage increase is this, and how does it compare to increases
in past years?
- The increase for AY 2006-07 is 4.1% ($42,681 vs. $41,019 for AY
2005–06).
-
- Past years' increases over previous year:
- 2005-06: 6.8%
- 2004-05: 5.5%
- 2003-04: 8.0%
- 2002-03: 4.9%
What is this new "student services fee"?
- This is a mandatory fee established to fund a small percentage of
the costs of student services and programs, as well as House activities,
ASCIT dues, the Big T, and other student activities. Student fees
were formerly bundled into tuition; now we will be separating these two
items.
-
- For incoming freshmen only, the Caltech mandatory student health
insurance premium is also included in the student services fee.
BOARD PLAN
What are the changes in the board plan for 2006–07?
- Please visit
http://www.finaid.caltech.edu/expenses.html.
Can we opt out of the board plan?
- Waivers from the board program for on-campus students are allowed
for medical reasons only, and must be approved by Dining.
HEALTH INSURANCE
Are we going to be charged for the Caltech student health insurance
plan?
- Caltech's Health Insurance Plan is mandatory and is provided to all
students. Beginning in fall 2006, with the entering freshman class, the
premium for Caltech's Health Insurance Plan will be included in the
Student Services Fee. For undergraduates who enrolled prior to fall 2006
and all graduate students, the Student Services Fee will not include the
cost of the premium.
FINANCIAL AID
Will I still receive the financial aid I need to attend Caltech?
- Caltech is committed to continuing to make financial aid available
to all eligible students; however with more than 59 percent of
undergraduates receiving need-based aid, we must make some changes in
order to avoid further stress on the Institute’s General Budget. For AY
2006-07, the following new policies will go into effect:
-
- - The self-help level will increase from $3,250 to $5,250. Students
will retain the flexibility to switch work and loans as they see fit to
meet this obligation.
-
- - The cost of health insurance will no longer be included in
financial aid calculations for new students (this does not apply to
continuing students). In cases of financial hardship, the Financial Aid
Office will offer loans to cover the cost of health insurance.
-
- - Financial aid will not be available to international transfer and
3/2 students entering in fall 2006 or later.
-
- - Financial aid for international undergraduate applicants will be
allocated to freshmen only and will be subject to renewal with proper
applications/documents for four years. Admission for international
students will continue to be need-sensitive (that is, admission for
academically qualified international freshmen is linked to their
financial need). For admitted international students with financial
need, Caltech will continue to meet their full demonstrated need with a
combination of grants, loans, and work study.
-
Is there any good news?
- As unfortunate as these lists of eliminated or reduced positions,
services, and programs may seem, there are still reasons for optimism.
-
- • The same academic classes and options are still being offered. We
continue to revise the curriculum, adding new courses and options as the
faculty deems necessary.
-
- • The core curriculum continues to be a superlative preparation for
a scientific career, the opportunities to conduct research are
unparalleled, the value of a Caltech degree in the marketplace is
consistently strong, and the cost of a Caltech education--especially
compared to our peer universities--is still a bargain.
-
- • All of Student Affairs’ core services are being retained, all
offices are still operational, and we will continue to strive to provide
the highest quality, individualized support for students. As an example,
the ability to view unofficial transcripts online as well as request
official transcripts online will be rolled out by the end of January
2006.
-
- • The computer lab located on the 2nd floor of the Steele Laboratory
will be moving to Modular Unit #4 on the north side of campus. IMSS's
tentative plan is to do the relocation during winter break. IMSS is also
exploring creating additional small "satellite" computer labs across
campus, and is looking for additional student lab attendants to help
operate the labs - please contact Glenn Bach (glenn@caltech.edu) if you
are interested.
-
- • Student financial aid and South House restoration are among the
top priorities of
the "There's Only One. Caltech" capital campaign. Since the start
of the campaign in 2002, friends and alumni of the Institute have
committed $48,687,149 for current and endowed student scholarships
against an $80 million goal and $7.3 for the South Houses against an
$18 million goal. Development staff and volunteers are working
diligently to meet the ambitious goals by the end of 2007.
-
- • Finally, thanks to generous gifts received by Dean of Students
John Hall, two new programs will be starting soon. Effective this month
(January 2006), there will be $25,000 available per year for student
grants to cover emergency situations. For academic year, 2006-2007 and
subsequent years, the George Housner Endowed Student Discovery Fund will
provide support to fund student proposals for scholarly activities,
including travel to academic conferences.
Last updated on:
04/03/2006 |
