Editor’s Note: This is the first of a two-part series. This article will address college costs and examine why tuition prices are able to remain as high as they are. The second part will address the effect of high tuition rates on the approach students take to their education as they attempt to earn an adequate return on their investment.

How affordable is the Notre Dame experience?

The University of Notre Dame’s Office of Financial Aid provides a table of information estimating the average 2013-14 Notre Dame undergraduate student expense budget (before factoring in student aid, loans and grants).  Tuition and Fees (TF) are $44,605 this year, and average Room and Board for students living on campus is $12,512.  Factoring in estimates for book costs, personal expenses and travel the Office of Financial Aid estimates an average student expense of $60,117 for the 2013-14 academic year.

Even acknowledging the immense impact of Notre Dame’s program of financial aid, the costs of attendance at Notre Dame and many other institutions of higher learning are incredibly higher than they were 40 years ago.  As professor of law emeritus Charles Rice wrote in his regular column in The Observer in 2007, “In 1978 when Notre Dame first described itself as ‘A National Catholic Research University,’ [tuition, room and board (TRB)] was $5,180. If the rise in that 1978 TRB had kept pace with the rise in the Consumer Price Index (CPI), the 2007-08 TRB would be $16,368.”  Following Rice’s methods, the 2012-13 TRB would not be substantially changed from $16,000 if the 1978 TRB amount had merely kept pace with inflation.

Not all cost increases are under the university’s control; but do the current sticker prices at Notre Dame and other comparable institutions accurately reflect the increased costs of operating such a complex machine?  Consider that tuition prices at elite universities have all settled in the same atmospheric level.  Princeton’s current TF price is $40,170.  Harvard’s is $42,292.  Yale’s is $44,000.  Stanford’s is $43,245.  MIT’s is $43,498.  The list goes on. Notre Dame, ranked 18th by the US News National Universities Rankings this year, has average tuition and fees of $44,605.

Why are all of these prices so similar?  The cost of operation for all of these complex institutions cannot be the same; all have different enrollments and endowments and no two universities are the same in terms of development and expenses.

In the market of college education the most elite universities have set the tuition bar high and other institutions that wish to be considered elite follow suit, sometimes even exceeding the cost of attendance at the Big 3 (Princeton, Yale and Harvard).  Whether these high sticker prices are justified is a question that must be asked by administrators and trustees tasked with setting tuition.

What can be said is that the market demand for a college education at elite universities does not seem to be deterred by the rising costs.  The supply of available spots at such universities is generally static; the elite schools do not vary their enrollment greatly from year to year.  At the same time, applications for acceptance at these schools are increasing year by year.  Notre Dame has just witnessed a record number of applicants for the current freshman class: 17,647 applicants, 2,075 of whom are currently enrolled at the university. Demand continues to rise while supply remains static, but do not think that this market is perfectly competitive. Current tuition prices need not be an equilibrium price.

The issue must be deeper than supply and demand. Why do such institutions charge such high sticker prices only to dish out huge amounts of need- and merit-based financial aid to bring the cost of attendance down?  Why not just lower the sticker prices and decrease financial aid?  Is it because institutions do not wish to be seen by consumers as sub-par?

The costs of attendance at Notre Dame have soared since it was officially dubbed a research university, and despite the fact that costs are increasing at a slower rate than they were 10 years ago, they are increasing faster than inflation nevertheless.  During his recent annual address to the faculty, President Rev. John Jenkins, CSC, acknowledged that, “The issue is real, the concerns are legitimate, and the questions raised are among those we in university administration have been asking and trying to answer for decades.”

Father Jenkins continued his address by stating that university operating expenses have more than doubled in the last 12 years, “from just under $400 million in 2000 to $971 million in 2012.”  Father Jenkins also noted that “salaries, wages and benefits comprised more than half of that growth as we made new faculty and administrative hires…”  He then cited the statistic that “the percentage of Notre Dame seniors who report being ‘very satisfied’ with the ‘overall quality of instruction’ at Notre Dame stands at 57 percent, more than 20 points above the national average among other highly selective private universities.”

Father Jenkins concluded the college affordability segment of his address by saying, “While we will do all we can to keep costs low while maintaining the quality of the education we offer, I do not foresee a scenario in which the cost of a Notre Dame education will decrease dramatically.”

University Spokesman Dennis Brown, while providing information on costs of attendance and university financial aid over the last 10 years, said, “You will note that financial aid has grown at a significantly faster rate than tuition, and that the average award (keeping in mind this is scholarship money, not loans) is now well more than twice the cost of tuition.”

Institutional Need- and Merit-Based Aid has indeed increased from $47,985,765 for the 2002-03 academic year to $118,261,540 for the 2012-13 year. Nominal tuition has risen from $25,510 to $42,464 in the same window. This represents a much more modest climb than the outpouring of financial aid, but the percent change in tuition from year to year was still always larger than the percent change in inflation as measured by the CPI for that year.

Brown’s note on average awards is not so clear. The average award among those students receiving financial assistance from the university itself was $27,925 in 2012-13.  Tuition prices that year were $42,464.  According to the Office of Financial Aid website, approximately half of all undergraduates receive some form of scholarship assistance from the university, excluding athletic scholarships.

Many factors have influenced rising costs of attendance at Notre Dame and at other elite schools.  The rise of information technology and Notre Dame’s growth as a research institution have led to a proliferation of institutes, centers and offices that undoubtedly provide some value to the university.

The question that needs to be asked is: At what cost?

Faculty salaries are not the problem, but professors do tend to teach fewer classes per semester than in the past and to earn sabbatical more often.

At Notre Dame the impact of new construction and development is easy to see.  Look no further than the new Morris Inn, opened this fall after extensive renovations.  There have recently been donations made to build new spaces for the social science departments and architecture school, and a donation has been made for the construction of a building named in honor of Fr. Jenkins.

Notre Dame gathered roughly $350 million from its undergraduate student body last year (taking into account enrollment, cost of attendance, and institutional need- and merit-based financial aid but allowing for error due to not taking faculty benefits into account).  In return, students get to live in comfortable dormitories, eat at nationally-ranked dining halls and enroll in informative and formational classes at a globally respected university.

But by the time of graduation, many students are also burdened with significant debt.

It is worth asking whether students would be willing to sacrifice some of the luxuries afforded to them while living on campus in return for a lower cost of attendance.

As Rice wrote in the aforementioned column in The Observer, “A Catholic university is uniquely obliged to free its grads from onerous debt.” The second part of this series will address the corrupting effect “onerous debt” can have on the quality and value of a Notre Dame education.

Tim Bradley is a sophomore studying theology and economics. Contact him at tbradle5@nd.edu.