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Despite the new accounting rules, tuition will remain the packhorse of academic finance. Parents may think their checks to Penn pay for a specific basket of services, such as the few hours a professor actually spends in class. In fact, tuition money flies rather far afield. Much of it supports legions of administrators, secretaries, groundkeepers, maintenance crews and campus cops--security being an especially crucial and large expense at Penn, which is located on the tough west bank of the Schuylkill River.
Just how far afield the money goes is made starkly clear in Penn's latest indirect-cost proposal to the Department of Health and Human Services, which the government uses to determine how much money Penn can recoup from each federal grant to cover the overall cost of operating the university and which TIME acquired under the Freedom of Information Act. In a stack of paper as thick as a large-type Bible, Penn laid itself bare, disclosing everything from the $208,795 allocated to cover the cost of operating the university president's $1.4 million, 5,500-sq.-ft. house to the volume of water and sewage that flows through College Hall, university headquarters.
Penn's electric bill alone came to $21.2 million, equivalent to 1,004 tuitions. The school spent $329,419 on admissions catalogs and bulletins, $700,142 on its alumni magazine, $66,873 on voice mail. It paid $6,275,904 for fire insurance and $726,943 to escort students home at night. Its chemistry department spent $38,716 on entertainment, its physicists only $7,049.
Folklore spent $354.
Even processing and acknowledging gifts from alumni cost money: $267,604.
One of the biggest expense categories at any major university is faculty salaries. Gone are the days of shabby gentility. On average, a full professor at Penn (excluding the faculty of its self-supporting medical operations) received total compensation last year of $121,000, about the same as at Princeton, Columbia and Yale; Harvard paid $131,000. From 1980-81 through 1995-96, Penn's compensation package increased in value more than 200%, twice the rate of inflation.
Families of Penn applicants who make that kind of money won't get financial aid, but Penn generously reimburses its faculty members for their children's college tuition. This benefit alone cost Penn $11 million in fiscal 1994, according to its HHS application--equivalent to 617 tuitions at that year's rates. A General Accounting Office audit found that four major universities--M.I.T., Stanford, Johns Hopkins and Chicago--together spent $53 million on tuition reimbursement from 1991 through 1993 and charged one-third of it, quite legally, to federal grants. The audit found, further, that 21% of the employees who received assistance made more than $100,000. Twenty-six made more than $250,000. Yet the traditional rationale for tuition reimbursement is that faculty members are paid so poorly they can't afford to send their kids to college.
Because of competition, however, tuition reimbursement has become as much a necessity as tenure and summers off. Such programs will become costlier now that the Federal Government has decided to stop picking up the tab for the portion once classified as indirect costs. The money will have to come from somewhere--namely Penn's various sources of general revenue, including tuition.