Board of Trustees Approves Budget Cuts To Off-Campus Programs, Raises Tuition

Phillips Academy’s Board of Trustees approved sweeping budget cuts to go into effect next year. In an efforts to balance to budget, the Trustees increased tuition, suspended certain off-campus programs, and decided to preserve financial aid for the 2003-04 school year. While on Academy Hill, the Board also met with students in classrooms, heard proposals from different committees, and attended a dinner at which three faculty members received awards. The budget cuts will save the Academy roughly $200,000 per annum. After seeing the results of the Faculty Working Group on Facilities and Budget’s faculty questionnaire, the Trustees implemented a 5.5 percent increase in tuition by raising the boarding rate from $28,520 to $30,100 and the day student tuition from $22,160 to $23,400. In addition, the Board set next year’s financial aid levels at 29.8 percent of the tuition revenue, the same figure as this year’s. With the increase in tuition, the amount of financial aid available will increase from $8.6 million to $8.997 million dollars and the faculty compensation pool will see a 2.4 percent gain. “Like that of most other non-profit institutions, the Academy’s endowment has been buffeted by three years of a down market, and we need to make adjustments to deal with the loss of revenue,” President of the Board of Trustees David Underwood ’54 remarked in the The Andover Gazette, “During our meetings on campus last week, Board members were greatly impressed by the work that has been done by faculty and Dean’s Council to agree on priorities and to make prudent suggestions for cutting costs next year and in the future. Together we are focused on decisions that will ensure [that] the Academy sustains the high quality of its academic program.” The suspension of off-campus programs will affect many offerings that the school has used to attract students, including the popular Cantata Choir Tour, the Department of Theater and Dance’s trip to the Edinburgh Fringe Festival, the Mountain School Program, the Washington Intern Program (WIP), and several term-contained opportunities to study languages abroad. According to Dean of Studies Vincent Avery, the school’s withdrawal of support for outside programs comes at a time when both the Board of Trustees and the faculty are actively planning contingencies to cope with a drop in income from the Academy’s endowment, which has suffered from the collapse of stock markets worldwide. The termination of the Academy’s participation in off-campus, term-contained programs such as the Maine Coast Semester, the Mountain School, and the Oxbow Term will, according to Dr. Avery, save tuition money for the school. The School Year Abroad program will not, however, undergo reductions. Also among the programs marked for suspension are the World Language Division’s many opportunities to study abroad. Although disappointed that the programs will be suspended, Division Director Margarita Curtis said that she will look at the cuts as “a blessing in disguise” and that “we will reemerge from this having reexamined the role that Phillips Academy should play in the education of future global leaders.” In recent years, the Academy’s best vocalists and orchestrra members have traveled across the world, from China to Turkey, performing and touring the foreign countries. This year, the students will spend spring vacation in Hawaii as scheduled, but they will not continue such trips for another three years. Lastly, the Academy will pull out of its sponsorship of the WIP – a duty PA currently shares with Phillips Exeter Academy (PEA). The one-term elective gives a group of students the opportunity to work as a personal intern for political leaders in Washington, DC. Dr. Avery observed, “[Supporting] the students on campus should be our priority.” Explaining the rationale behind the decisions, Dr. Avery stated in The Andover Gazette that only a small percentage of the student body stands to suffer from the cuts. “First, the trimester-contained programs exist at the edge of a full academic program, and they are taken advantage of by few students overall. Second, in recent years, the number of applicants for these programs has dropped significantly. Third, off-campus programs result in a loss of tuition revenue to the school when students are enrolled during the school year.” He continued, “And finally, because of our tradition of providing financial aid to all off-campus programs open to Academy students, these programs drain funds away from the overall financial aid pool.” He added, “We want to make sure that there is adequate financial aid to serve those students who need it to attend the Academy… This is not just a one-year issue. It will be a many-year problem.” The administration will also reduce the physical plant budget by $500,000 and the technology renewal budget by $300,000. In addition, the school is requiring all departments to make a 3 percent reduction in non-personnel spending. Using a model created under the 1996 Strategic Plan, the school projected the increase in spending in the operating budget for the 2004 fiscal year at 4 percent. However, owing to the recent market problems, the spending increase will be reduced to only 1.5 percent. Mrs. Sykes noted, “Over the next three years, we will face the challenge of sustaining the high quality of the Academy’s program, while working with fewer resources. Having just completed a successful fund-raising campaign, I have no doubt we can do this. The strategic planning process that begins this spring gives us the opportunity to focus anew on the defining elements of an Andover education and to figure out how to provide it. Compared with many institutions, we are in a strong position to weather these economic times.” Many on campus, including students who participate or have participated in the programs that will be cut for the next three years, wonder if restoring these programs in the future will be without considerable difficulty. Programs such as the Washington Intern Program, which rely on maintaining connections in the Washington D.C. political arena, might encounter unexpected difficulty if restored at all. Away from the budget discussions, last weekend’s sessions represented the first time that Trustees could visit classes and student activities. According to Mrs. Sykes, the visitors were “very impressed with students and faculty.” Trustees also met representatives from the Ambassadors Club, Student Council, The Phillipian, and other clubs for a breakfast early Saturday morning. The Trustees held meetings with different committees to talk about future projects. The Education Committee heard from both the Science Departments and the Admissions Office and discussed the school’s relationship with the International Academic Partnership (IAP). The IAP is an outreach program between Phillips Academy, the Aga Khan Educational Service, and the Institute for Educational Development of Aga Khan University. The Academy’s current economic situation stems from the endowment’s decline from its $550 million peak in the spring of 2000 to its current level of $420 million. Although the operating budget for the 2003-2004 academic year increased to $69.7 million, much of that $1 million difference from the current budget can be attributed primarily to nationwide inflation.