Alumni Gifts Cover Annual Costs When Tuition Exhausted

An Andover education costs $56,300 a year, but the average tuition any student has to pay is $39,900. This average covers only about 71 percent of the school’s expenses. Known as End of Tuition Day, March 9 marked the day when tuition payments ran out and alumni gifts and the endowment began funding the costs of each student’s education. “End of Tuition Day symbolizes the day Andover’s budget would run out if it relied solely on tuition for revenue. This means that all students receive financial support in one form,” said Ann Harris, Director of Class, Reunion and Parent Giving, in an e-mail to The Phillipian. “This symbolic day ties in with Andover’s Non Sibi ideals of leadership and service. Developing a community of philanthropy is another way to sustain this critical mission. Finis Origine Pendet, the Academy seal affirms. The end does indeed depend upon the beginning,” added Harris. The average tuition of $39,900 includes tuition paid by the financial aid office for students on scholarship. This year, boarding students, making up 75 percent of the student body, paid $42,350, while day students paid $32,850. The budget for this school year totaled $104.7 million, according to Stephen Carter, Chief Operating and Financial Officer. When that cost is divided by 1105 students, the cost per student equals $94,800. However, the total budget also includes indirect operating costs, which consists of financial aid, debt, capital projects, fundraisers, running summer sessions and other campus plans, totalling $38,500 per student. When the indirect operating costs were subtracted from the total cost, the direct operating cost per student, or the actual cost of an Andover education, is $56,300, according to Carter. Tuition payments, averaging $39,900, cover just over two-thirds of the $56,300, while the endowment, annual giving from alumni donors and other income fund the $16,400 “tuition deficit” per student, according to Carter. Annual giving funds approximately $9,000 per student of this $16,400 deficit. $4 million from the endowment and $4 million from other income sources are used to cover the remainder of the direct operating cost for all students. Additionally, approximately $37.4 million is drawn from the endowment to cover the indirect operating costs. The endowment grows at 3 percent each year. Because the cost per student has risen by five percent since 2000, the amount taken out of the endowment has also increased as a result, according to Carter. Since the endowment is maintained in perpetuity, the school relies heavily on external annual gifts each year, according to Deborah Murphy, Director of Alumni Affairs. “There’s no perpetuity related to an annual giving. However, drawing money from the endowment is a balancing act between the needs of the future and the needs of the present,” said Carter. Annual gifts played a significant role during the economic downturn in particular because they allowed the endowment to remain stable, according to Murphy. “We talk to a lot of alums and students who say, ‘We’re not sure if our senior gift is making a difference in this matter.’ We say to them, ‘Everyone collectively is giving to this annual giving fund, and collectively, alumni, parents and students are making a huge difference,’” said Murphy. Next year, Carter and Harris hope to recognize the End of Tuition Day to educate students, faculty and staff about the importance of giving back to the Andover community. Like several colleges and universities, they proposed shutting off all of the lights on campus to raise awareness about the day. “The End of Tuition [Day] is an opportunity to educate students, faculty, and staff about the importance of philanthropy. We want to raise awareness and appreciation for the funds given to Andover while raising awareness about philanthropy throughout our community,” said Harris.