For years, liberal arts colleges like Holy Cross have justified sky-high tuition prices by arguing that schools are selling students a unique style of education and a holistic college experience. “It’s an education you can’t get anywhere else… like at a big university,” admissions counselors declare. And especially, as a Jesuit school, we’ve had the montra “Cura Personalis” driven into our heads as a staple of the experience beyond the classroom. But then, when the coronavirus pandemic forced campuses around the country to close, the narrative changed. Suddenly, administrators were forced to argue that colleges, despite being unable to provide those quintessential aspects of the “college experience,” were somehow still worth more money than most Americans make in a year. Given Holy Cross’s announcement on Monday that campus would be closed this fall and that all classes would be conducted online as well as their statements that they won’t lower tuition, it’s crucial to take a step back and acknowledge that something has to change. A Holy Cross education is not worth $54,050, not when it’s conducted over Zoom, and there is no legitimate financial reason for Holy Cross to charge such an enormous amount of money.
As classes are moved online, the quality of education at Holy Cross will decline. Humanities classes built on lively discussion will be stale and rigid over computer screens and laggy internet connections. STEM students will lose the spirit of collaboration with their peers and their ability to perform hands-on lab work. Those in the arts will miss their opportunity to perform and create in the theater or the studio. The quality of the one thing that the College is using to defend its ridiculously high tuition prices—rigorous academics—is going to suffer. If the primary purpose of a college is to instruct its students, then a Holy Cross education is worth less if academic quality suffers. If Holy Cross is about more than just academics—as administrators have opined for years—then this point is even more pressing: in 2020, when the “college experience” is no longer possible, a Holy Cross education isn’t worth $54,050. However, the College of the Holy Cross has expressed no interest in decreasing already absurdly high tuition rates in order to reflect the decreased value of enrollment. As Father Boroughs expressed in a June 24th email, “the College will eliminate the previously announced tuition increase and freeze tuition for the 2020-2021 academic year at the 2019-2020 rate.” This was reaffirmed by Fr. Boroughs in August 11th’s town hall. So, while the college has done us the gracious favor of not raising tuition, they will not be decreasing tuition. This is highway robbery.
It is unjust for the College, as a non-profit institution, to charge tuition based upon the amount of money they would like to make, rather than the actual value of the service they’re providing . This violates, not only their identity as a non-profit, but as a Catholic college, and as a college supposedly dedicated to “social justice.”
The response to this decision might be greeted with empathy if people believe that the college is under threat of financial ruin. Father Boroughs seemed to perpetuate this idea when he stated, in a May 15th email, “At this point the endowment has endured substantial losses and is down approximately 10% in the calendar year to date. Like so many colleges, Holy Cross is highly tuition dependent: 70% of our revenue comes in twice a year when students and their parents pay their tuition, room and board fees. Consequently, we are vulnerable to any changes in enrollment or to prolonged time spent studying remotely.” It appears that the college is using such figures to justify their decision not to reduce tuition, however, this is not adequate justification.
In the fiscal years ending on June 30, 2018 and June 30, 2019, (the most recent available data), the college’s operating revenues exceeded their operating expenses by $8.8 million and $8.9 million respectively. Operating revenues are largely, as Fr Boroughs himself pointed out, generated by tuition. Operating expenses encompass all the costs accrued by the functioning of the school: salaries, employee benefits, supplies for campus, etc. This, in essence, means that the college has close to $9 million by which to reduce the total income from tuition before it merely breaks even. The college approximates that there are roughly 3,000 students enrolled, so Holy Cross could decrease tuition by about $3,000 per student before it began to lose money on operating expenses. And this is only when considering the operating revenue. When factoring in the non-operating activities, which include donations, the return on investments, etc., we see that over the fiscal years ending on June 30, 2018 and June 30, 2019, the net assets of the college have increased by $71 million and $10 million respectively. In other words, the College—a non-profit institution—is far from losing money or being “in the red.” They can lower tuition without bringing serious economic ruin on the school.
This is before we consider the endowment. Returning to the May 15th email, Father Boroughs warned that, “At this point the endowment has endured substantial losses and is down approximately 10% in the calendar year to date.” The college reports that, as of June 30th 2019, the College of the Holy Cross had an endowment worth $785.9 million. Considering this 10% decrease as of May, and generously inferring other potential losses, we can assume the current value of the endowment is around $700 million.
The College appears to be using this vast financial resource to fight financial losses due to COVID-19. In the same June 24th email, Fr. Boroughs announced, “The College will increase the draw from the endowment adding an additional $5 million to our operating budget.” Certainly this is a generous and timely use of the endowment: according to the Holy Cross website, “The purpose of the endowment is to provide sustainable financial support to existing operations as well as to provide for future generations of students, faculty and staff In other words, the endowment exists to provide the school with a level of financial security, especially for times like these. Yet, Holy Cross’s decision to dip into the endowment is not as impressive as it might seem.
The College of the Holy Cross reports that its strategy in handling the endowment is to spend 4.5% of the endowment each year. This is relatively low compared to schools like Boston College and Georgetown, who spend 5% of their endowments annually. Indeed, 5% is a generally accepted standard of spending from an endowment; for private foundations, it is legally required by the IRS to spend at least 5%. Holy Cross uses .5% less of their endowment than other establishments. This might seem insignificant, but it equates to $3.5 million dollars (of the supposed $700 million endowment). Now, considering that Holy Cross is pulling an additional $5 million from the endowment this year, (which would constitute 0.7% of the total value of the endowment) Holy Cross is still only spending 5.2% of their endowment… only 0.2% greater than the standard, non-pandemic norm for other top-tier educational institutions. Holy Cross has been stingy with their endowment, and now that they finally have a legitimate reason to spend some of that money—it’s hard to think of a better time to fall back on the endowment than in the middle of a pandemic— their generosity is a lot less generous than they would like us to think.
If the College pulled that additional $3.5 million from the endowment annually, they could decrease the tuition per student by another $1,200. If one factors in the several million dollars of surplus revenue the College brings in annually, then, without losing money or spending an atypical percentage of their endowment, Holy Cross can decrease tuition by $4,200 per student. And while this might seem like a small chink in the $54,050 tuition (not including the cost of room and board as well as other fees), it is a considerable amount, particularly for economically disadvantaged students.
And all this is before we even consider the drop in the value of our education due to coronavirus. Indeed, that $4,200 should probably be taken off our tuition regardless. But now we find ourselves being charged the same amount of money for a worse education. Admittedly, by decreasing tuition, the college will lose money. The answer lies in the endowment.
If Holy Cross decreased tuition to better represent the decreased value of the services they are providing, then they can rightfully draw on the endowment to “provide sustainable financial support,” until normal operations resume. Admittedly, this will create a large dent in the endowment. But if the endowment is not drawn upon now—in a time of international crisis—then when will it be drawn upon? If they won’t use this large reserve of money to support students in the middle of a pandemic (and potential economic crisis), then when will they? If they will not use this money for the direct betterment of students, what is the endowment even for?
Though the College of the Holy Cross purports to care deeply for its students, their spending habits seem to betray such care. Rather, it seems that their concern, or at least their primary concern, is making money and sitting upon a vast, relatively untapped endowment. Not only does this violate almost every Catholic principle related to fiscal stewardship, it also constitutes a real injustice: the school is charging exorbitant amounts of money for students to sit at home and watch professors awkwardly fumble through Zoom lectures.
It must be noted: I do not wish for this article to simply conjure vitriol and resentment towards Fr. Boroughs. We must recognize that this situation doesn’t fall entirely on his shoulders. Indeed, though I lack the knowledge of the specific workings of the college bureaucracy; he may very well be acting solely as a messenger for the Board on this matter. This is about exposing unjust policy, not cancelling an administrator. So, to the College of the Holy Cross, its administration, and its board of Trustees, I would like to say: stop with the platitudes. Stop lamenting your disappointment that students will not be able to return to campus. Stop gushing over your intense concern for us. Treat us students with the justice we deserve - justice you say you care so deeply about. It’s time to put your money where your mouth is.
Note: Holy Cross administration was approached for a comment but did not respond in time for publication.