The Editorial/Opinion section of The Poly can be a brutal and unforgiving place. Criticism seems to be the prevailing tone and usually goes un-rebutted. It even spills over to the news pages and headlines from time to time in pieces that many have begun refer to as “infotorials.” Now, I am not one to ever quell a dissenting voice and, I am a true believer that the best decisions are products of an open forum and thorough discussion that ranges the spectrum of vantage points. Maybe it is our analytical nature or our drive to improve and make better through a continuous refinement of what exists that creates this culture. During my four years here, however, I have found that most arguments are narrow and not based on a solid factual grounding, or even so much as an understanding of the issues at hand.
Take for instance the budget cuts and cost of attendance increases at Rensselaer, a topic that has certainly gotten pens going in recent weeks and will continue to do so after next year’s budget and resulting tuition levels are set in the coming weeks. If we want to provide a basis an argument regarding budget decisions, we must first get an actual feel for the budget.
Each year, Rensselaer accrues over $300 million in operating expenses alone. Currently, we have 6,000 students paying $40,000 in tuition and living expenses to the school. We must also take into account the fact that the average discount rate is around 53 percent, meaning that the school provides about half of the cost of attendance in the form of financial aid packages, so that students can afford to attend RPI. We will use 30 percent for the purpose of our analysis because we can assume about 20 percent of those financial aid packages are federal loans. So, for 6,000 students paying $40,000 a year with a discount rate of 30 percent, we get $168 million in revenue directly from students, leaving a shortfall in revenue of over $150 million that must be made up through annual giving, research grants, patent royalties, and endowment interest. Students barely generate half the revenue needed to make the campus churn from year to year.
Now consider the investment in our future that has been made and the course charted by The Rensselaer Plan, through which we are taking on the titans of academia with endowments well into the billions, such as Stanford at $12.2 billion, Cornell at $3.7 billion, and Rice at $3.6 billion. Last year, the interest from MIT’s $6.7 billion-dollar endowment was larger than our entire endowment. Our financial resources dwarf those of our competition. Yet, we are as bold and as ambitious as any school in the world—and we are doing it with less. This comparative disadvantage means that we must find room within existing budgets to provide for future improvements and increase our revenue streams through research awards, alumni gifts, and tuition. While we may not see the direct fruits of these investments during our time here, we are not the only stakeholders. Government, industry, alumni, and the students of tomorrow, along with current students, must be taken into account when making budget decisions.
So next time you decide to lampoon the current administration for budget cuts, complain about inadequate resources, or rant about decreases in the scope of programs, remember that we are all a small part of a piece within the larger Rensselaer community. We are by no means the sole customer here. One analogy that I have heard seems to best describe what we are doing: The Rensselaer budget is like trying to cover a king size bed with a twin size sheet, with each pull in one area drawing from other places. Yet, I believe that these calculated and methodical pulls will some day allow Rensselaer to have a king size sheet with a broader reach. Some question the need for progress and maybe even claim that all this action associated with The Rensselaer Plan may not be necessary. Well, to that I would simply say that complacency has no place within our mission or the current administration’s vocabulary.
