Where does the money go?

Chelsea Woods

With costs rising in every aspect of daily life, an increase in the cost of an education does not raise many eyebrows. But the price of a top-notch education is no easy weight to bear, and as the numbers go up, questions arise concerning where exactly the money is going. The Office of Financial Aid states on its Web site that the cost of attending Villanova University for a freshman for the ’08-’09 academic year is approximately $50,175, with 74 percent of this cost (or $36,950) attributed to tuition.

When one begins to examine the allocation of funds, it becomes apparent that the issue is actually more complex than simply dishing money into different areas of need. Firstly, Villanova does not and cannot fund all its student resources with tuition alone. The makeup of University funds comes from varied sources. Seventy-one percent of Villanova’s viable funds come from students’ combined tuition. The cost of auxiliary services, such as dining and dormitory, constitute another 16 percent of the available capital.

The last 13 percent of funds comes from various elements, including investments. The most important part of this crucial 13 percent, however, includes gifts and grants to the University from various donors and alumni. These compose about 5 percent of the fiscal revenues obtained by the University but play a pivotal role in determining the cost of attendance for each individual student.

“The amount of tuition charged is actually less than the cost of providing a Villanova education to a student,” says Ken Valosky, vice president for Administration and Finance. “Our annual fund of gifts and grants allow us to bridge the gap between what is charged and what is needed, in effect helping to keep the cost of attendance as low as possible.”

Though the cost of running the University is tuition-dependent, the generosity of its donors is essential – not just to the University’s pocket book but also to that of the student.

The main question remains: Where does this money go? The Villanova dollar springs from myriad origins and stretches to meet manifold needs. The biggest, of course, is the salaries of the faculty and staff. The more exemplary the faculty, the higher the cost of maintaining such excellence.

“It costs more for top-flight faculty, but in the end, this translates to a better education for the students,” Valosky says.

All in all, the upkeep of the faculty and staff eats up about 45 percent of the funds available for Villanova’s maintenance. Employee benefits, such as health insurance, are included in this number.

Financial aid also weighs in as a contender for a good portion of the University’s budget. Sixteen percent goes to aiding students in need of fiscal assistance. This year, that comes to a total of $63.4 million, a substantial sum to work with.

The common complaint about aid, however, is often directed at Villanova’s endowment.

“We recognize that our endowment is very small, compared with the schools Villanova rivals for student recruitment,” Valosky says, reporting that the University’s current endowment stands at around $350 million.

Rival schools, such as Boston College, Bucknell and the University of Richmond, trump this number significantly, with endowments falling anywhere between $500 million and $1.8 billion. To compensate, the University allots 2 percent of the annual budget to “planned savings,” directly placing University money in the endowment fund. The aim here is to grow the endowment with the University’s own money.

“We have seen significant growth through compounded interest since the procedure was implemented 20 years ago,” Valosky says.

There is a direct relationship between this practice and the funds available for the University to work with outside of what a student pays for his or her education. In essence, it is hoped that eventually this will take some of the financial weight off students.

When considering Villanova’s parceling out of resources, it is important to be mindful that what goes on in today’s global market and in global issues also directly affects the University. As demand for steel and other building materials increases between countries, and as the costs of such resources subsequently rise internationally, the University feels the effects financially because of current building projects and future plans for expansion.

With the dawn of a global food crisis and an upshot in the price of food, the University must compensate and make crucial decisions regarding cost and quality of food for its students. No matter what the product is, costs are on the rise globally. The Villanova community must navigate these problems just as a family would, looking to budget its resources for the welfare of all involved.

How students’ money is used is a complex issue involving not just University concerns but world issues as well. In the swing of a new fiscal year, the University will once again choose to confront problems head-on, keeping, as always, the students’ best interests at the forefront of its mind.