Inspire, Fall/Winter 2011

2. How are tuition dollars used? Student tuition provided approximately 95 percent of Cedarville’s $91.8 million operating budget in 2010–11, and the University is working on a strategy to reduce its tuition dependence closer to 75 percent by 2020. Revenue from online programs, with lower overhead costs, and increased donor support will help accomplish this goal. Student tuition currently covers 95 percent of these operating costs: 43% Instruction 21% Academic support 15% Institutional support (i.e., operations) 15% Auxiliary enterprises (i.e., nonacademic departments not included above) 6% Student services 3. Is it appropriate to take on debt to finance education? How much is too much? In an ideal world, every student would complete a degree without accruing debt. But, that isn’t the reality for two-thirds of recent graduates with average debt loads of $26,100 from private colleges and $19,800 from state-subsidized public universities. Many students have no choice but to borrow student loans to close the gap. For many, the question has shifted from “Should I borrow?” to “How much student loan debt is reasonable?” The answer will be unique to each student and should reflect careful thought and prayer along with an understanding of future career plans and anticipated earnings. One rule of thumb is to borrow no more than you expect to earn the first year after graduation. Other financial experts recommend limiting total student borrowing to an amount that will keep loan payments below eight to 10 percent of pretax income. Very similar to national averages, about two-thirds of Cedarville students graduate with debt at a level slightly lower than the private college average. With one of the lowest default rates in the U.S. (less than one percent) and career placement rates well ahead of national averages, Cedarville graduates appear to be wisely managing their debt. 4. Why pay more for Cedarville when there are less expensive options? Choosing a university based on tuition alone can be a costly risk. A school that boasts low tuition may not be the bargain you expect if it fails to graduate students on time. State schools typically graduate just one-third of students in four years. Be sure to inquire about room and board, too. Rates can vary by several thousand dollars, with an average cost of $8,540 at public colleges and $9,700 at private colleges. This is almost double Cedarville’s rate of $5,242. Other costly surprises come in the form of college fees. These can increase a student’s bill by hundreds, even thousands, of dollars. Fees can be assessed for a wide range of services such as student activities, technology, library, health insurance, graduation, parking, and many more. Ask direct and specific questions when comparing college costs. More and more students are finding that Cedarville’s costs, when financial aid is considered, are not significantly more than even public alternatives. But, think bigger picture, too. You likely would not buy a house or car simply because it was the least expensive option. So much more, including your needs and priorities, informs your decision. The same should be true when you choose a college. Spiritual vibrancy, academic reputation, residence life options, career placement rates, faculty credentials, and distance from home are all important factors in a college decision. In many cases, when you’ve explored the answers to those questions, you’ll find that you will get more when you pay more. 5. Is Cedarville affordable? If the size of this year’s freshman class is a gauge of affordability, then Cedarville has made significant strides in becoming more accessible to more students over the past two years. After enrolling a smaller freshman class in fall 2009, Cedarville reevaluated its financial aid strategy. The University then unveiled a new simplified approach to financial aid that included larger grants and scholarships (see chart 2). The results were immediate and dramatic. By fall 2010 Cedarville enrolled a record 859 “More and more students are finding that Cedarville’s costs, when financial aid is considered, are not significantly more than even public alternatives.” $ 8.8 million $ 10.2 million $ 14.3 million $ 17.8 million $ 21.8 million 2008–09 2009–10 2010–11 2011–12 2012–13 25% < $ 59,000 25% > $ 107,000 50% $ 59,000–107,000 Chart 3 Family Income Ranges Chart 2 Increase in Grants and Scholarships projected 12 FALL/WINTER 2011