Financial Plan - Cornell University Division of Budget & Planning

Tuition, Financial Aid & Endowmentfood cost targets. They watch market fluctuationsin various food categories and plan menus tomaintain expected quality standards while controllingfood costs as a percentage of sales at targetlevels. Success in this objective, while providingwholesome and varied food offerings, has beenvery challenging recently due to the significantimpact of fuel costs on food transportation.Both of these efforts are designed to limit thegrowth of costs that students ultimately pay forthrough room and board charges.• Cost Allocation Methodology – Cornell has recentlyrevised its cost allocation methodology (CAM),which is used internally to associate a little over$250 million of central administrative and supportcosts with college and operating unit revenuebudgets that ultimately must pay for those expenditures.One of the important features of the CAMredesign is the decision to place a “growth collar”on the central administrative and support costsbeing distributed that will effectively constrainthe annual increase in these operating budgets. AsCornell builds these costs into student rates, thegrowth collar will limit future tuition, room, andboard increases.A second major CAM change is to switch the focusof the calculation from an after-the-fact costingexercise to a before-the-fact planning activity,allowing the university’s administration to morecarefully plan for changes in the level of the centraladministration and support functions.In addition to these specific efforts, the university isundertaking global reviews of costs and processes.For example, Cornell recently hired a space-planningdirector to help optimize space utilization and promotethe sharing of space. The university is revisingbudget and costing models to simplify and decreasetransaction costs and is revamping activities that spanorganizations, such as event management, communications,and information technologies, in order toincrease efficiency and effectiveness.Financial AidCornell’s approach to undergraduate financial aid canbest be described as a policy of fairness. The university’scurrent admissions and financial-aid policy (seepage 77) is a modern interpretation of ideas and idealsespoused by Cornell’s founders. Ezra Cornell’s famousmotto—“I would found an institution where anyperson can find instruction in any study”—addressedstudent access directly by stating that any personshould be able to attend, that is, any student withoutartificial limitation. The motto is best understood asa bold declaration that higher education should beopen to the poor, to women, to people of all races andethnicities, and to individuals of various religious andmoral persuasions. These were radical notions in themiddle of the nineteenth century, when most collegesand universities were loosely affiliated with Christiandenominations and only a handful admitted womenor minority students or provided need-based financialaid of any consequence. Both Ezra Cornell andAndrew D. White were convinced that the nation’sprogress depended on such a social transformation.Cornell’s admissions and financial-aid policy is purposefullydesigned to eliminate the ability to pay foreducation from influencing both the institution’s offerof admission and the student’s acceptance of thatoffer. Cornell’s faculty and staff who make admissiondecisions are not privy to the personal finances ofthe students applying, and instead base their recommendationson the academic quality and potential ofthe applicants, among other factors. Once a student istendered an offer of admission, the university crafts afinancial-aid package (if the student seeks such help)that will enable the student to attend.Determining a student’s financial need and assemblinga portfolio of financial-aid resources to meet that needare highly individualized processes.• First, the university determines the typical cost ofattendance for a student during the academic year.This cost varies by tuition rate between endowedIthaca and contract college divisions and betweenNew York State residents and nonresidents in thecontract colleges. Tuition also varies for studentsenrolled in special programs, such as CornellAbroad. Room and board rates are based on typicalon-campus residency and use of Cornell diningservices, even when students live off campus. Thedifferential cost of living when studying abroad isalso taken into consideration in the calculation.The cost of attendance includes provision for thepurchase of books, travel to and from Cornell, andother miscellaneous expenses.17