Duke Mag-Billion Dollar Budget-Jul/Aug 2002-Gazette

August 1, 2002
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Billion Dollar Budget

Duke's trustees approved a balanced operating budget of $689.6 million for the university's academic programs for the 2002-2003 fiscal year. The budget is up 4.1 percent over last year's. When funds restricted for specific purposes and sponsored research funding are included, the overall fiscal-year budget totals $1.221 billion, a 4.4 percent increase over the previous year. The budget includes both the medical and nursing schools, but excludes Duke Hospital, which is covered in a separate spending plan under Duke University Health System.

The new budget includes a previously announced 3.9 percent increase in the standard undergraduate tuition, fees, room, and board total, to $35,765, among the lowest of the leading private research universities announced this year. At Duke, a total of $46.8 million in grant aid, a 9.9 percent increase, will be available to undergraduates. Nearly four out of ten undergraduates will receive financial assistance in the next fiscal year, with need-based grants expected to average more than $20,000.

The budget as approved by the board of trustees continues to support the university's dual policies of admitting undergraduates based on their academic accomplishments and potential, without regard to their ability to pay, and then meeting 100 percent of their demonstrated financial need. Only about two dozen private colleges and universities in the nation maintain such "need-blind" admissions and financial-aid policies.

More than half, or 58.5 percent, of Duke's financial-aid expenditures will be funded from the university's unrestricted budget. About 21.4 percent is funded by restricted gifts and endowments, 10.7 percent by the government, and 9.4 percent by other outside sources. In contrast, Duke officials say, many of Duke's wealthiest competitors with much larger endowments fund more than 80 percent of their financial aid from endowment funds and do not need to dip into their operating funds to support financial aid as much, if at all. The success of the $2-billion Campaign for Duke has enabled financial-aid programs to be enhanced; one example is the extension of the need-blind admissions policy to international students for the first time this year.

Under the new budget, financial assistance for graduate and professional students will increase by 13.5 percent to $43.1 million, helping to offset a previously announced 10.8 percent increase in doctoral-student tuition.

Income from students will account for nearly half of unrestricted revenues, or $334.8 million, an increase of 5.4 percent over last year's budget. This amount is based on a projected enrollment of approximately 5,973 full-time resident undergraduates and 5,011 graduate and professional students. The remaining $354.8 million in projected revenue comes from indirect cost recoveries or grants, gifts, investment income, and other sources.

On the expense side of the budget, non-payroll operating and administrative expenses remain essentially flat at $99.2 million, reflecting a concerted effort to absorb increases associated with new activities, major items such as insurance, and compensation costs. Each of Duke's schools, with the exception of the Graduate School, which is drawing on $500,000 from reserves, submitted a balanced budget within its annual revenue stream.

Salary and benefits will increase by $24.7 million, or 6.6 percent, over last year's budget. This reflects a salary pool of 3.25 percent and the costs associated with the planned expansion of the faculty and incoming staff to support academic priorities outlined in Duke's strategic plan, "Building on Excellence." The university plans to spend $28.3 million in the new fiscal year on these priorities, including investments in genomics, photonics, nanoscience, Perkins Library, faculty development, student life, and new instructional technology.