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A balancing actThe challenge of combining excellence and accessibility
Baylor Line: The rising cost of
higher education has become a topic of concern nationally. U.S.
Secretary of Education Margaret Spellings appointed a Commission on
Higher Education that released a report in which the issues of
accessibility, affordability, and accountability were scrutinized. What
are your views concerning the rising price of college tuition
nationally as costs, services, and expectations increase?
President John M. Lilley: The
cost of higher education is one of the biggest challenges we face
across the nation because we live in a time of enormous change. In
higher education we have the knowledge explosion, the greatly increased
capacity to communicate that knowledge, and rising expectations from
students and their parents. At Baylor, and at colleges and universities
elsewhere, all of those issues and more are tied directly to our costs.
 Contrast
our new Brooks Village with the old Brooks Hall. Why was Brooks Hall no
longer adequate for our students? In addition to issues of student
safety, something every university in the nation is investing in
heavily, the old Brooks was short of amenities that today's students
and their parents expect.
When I was a student at Baylor, I don't remember hearing anyone talk
about fitness. Aerobics had not been invented. We had intramurals, but
that was for fun, if you had time. Now we provide students access to
the McLane Student Life Center, one of the finest collegiate fitness
centers in the nation. Of course we're also supporting financially a
variety of student support services, such as the Paul L. Foster Student
Success Center, which while helping students to maximize their
collegiate experience, also carry a price tag.
So there is this greater awareness in our students and their parents
and in our faculty and staff of the cost of competing with other
colleges and universities. We must compete successfully, and it is
costly. Students and their parents are adept at using the Web to
analyze those costs. They expect competitive amenities, and they go to
the Web and compare Baylor's cost with other institutions in which they
are interested. Baylor does well in that comparison, but we're never
satisfied.
One of the things that emerged from the Spellings report was an
awareness that we need to have a way for parents to compare the costs
of educational institutions. In response to that awareness, the
National Association of Independent Colleges and Universities (NAICU)
created the University and College Accountability Network, or U-CAN.
This website, at ucan-network.org,
contains relevant information about institutions. It includes cost,
enrollment, financial aid, and student-body demographics. So students
and their parents can see exactly what the difference is between the
sticker price for tuition at a given institution and what the
discounted price is after financial need is assessed.
The central question, however, is the value students and their families
attach to the education for the net price they are paying. For Baylor,
the value is academic excellence, Christian commitment, and a caring
environment that helps to prepare young people for worldwide leadership
and service. Frankly, that's an expensive combination, but it is
exactly what our students are looking for when they choose Baylor. We
need to be as careful as possible about our costs, but we also must be
competitive in terms of what we offer.
It is illuminating to note the differences between Baylor and
universities like Harvard, Yale, and Stanford. Their endowments have
grown to such a size that they are able to greatly minimize their net
prices, and in some cases, remove them all together. That's only
possible because of the size of their endowments. Harvard's endowment
per student is approximately $2 million. Baylor's endowment per student
is approximately $3,500.
One of the biggest challenges we face at Baylor is building our
endowment, particularly for scholarships, so that every student who is
accepted at Baylor can afford to attend. I also want us to build our
endowment to a level that allows students to graduate debt-free. We
know that some Baylor students will go into high-impact service jobs
such as teaching and social work. Unfortunately, these types of
positions often carry lower salaries. I want our students to be able to
choose their life's calling without worrying about debt in acquiring
their education. That's a tall order, and we need an endowment of at
least $4.5 billion to reach that goal.
Baylor Line: One of the things the
Spellings report focused on was the issue of accountability, especially
in terms of universities with large endowments needing to be more
accountable for how their endowments are being used. Could you
summarize what Baylor is doing in terms of reporting how we are using
our endowment?
Lilley: There are three legs to
the endowment stool. The first is how much money a university raises,
the second is how well a university invests those funds, and the third
is how much of the income from those funds a university spends.
Baylor has done very well on the investment side in recent years, and
we're very proud of the terrific returns we have enjoyed. On the
spending side, Baylor has tended to spend more from its endowment
returns than is traditional in higher education, but the Board of
Regents has recently restricted that amount to approximately 5 percent
so that the principal compounds over time. On the fund-raising side, we
need to raise a considerably larger sum for our endowment.
In our vision statement, Baylor 2012, we've said that we want to
achieve a $2 billion endowment by 2012. We now are in the early phases
of a comprehensive fund-raising campaign, seeking to determine whether
our friends will support gifts to create an endowment of that size.
We are very, very careful to make sure that our endowment is spent in
precisely the ways that our benefactors have requested. That kind of
stewardship is central to building trust with those who would
generously support Baylor with their financial resources.
Baylor Line: What is Baylor doing to manage costs and maximize operational efficiencies to minimize tuition increases?
Lilley: We have two kinds of
planning that drive our budgeting process. The first kind is
operational planning that deals with improvement in current programs.
Budget executives make their proposals in three hearings per year. When
a dean or a vice president requests new funds, one of the things that
we ask is what are the budget reallocations they are prepared to make
before they are granted new funds. This helps all of us constantly to
ask ourselves whether we are using the resources of the university in
the most efficient and effective manner.
The second kind of planning is strategic, where we look at major new
initiatives, both programmatic and bricks and mortar. Baylor must be
selective about its choices, consistent with our mission and vision,
and we must ask ourselves whether a new program meets a clear
university or societal need. These new programs in almost every case
require new programmatic endowments. Before we ask for financial
support for a new building, for instance, we need to be sure that we
need it. If we do, we then need to build it thoughtfully, with good
design for a long life of service.
Baylor Line: What is Baylor's approach to helping students pay for their higher education?
Lilley: We start by making it
clear to prospective students what a Baylor education will cost them.
They can get an estimate of that, including the financial aid they
might expect, immediately on the Web. We also try to make clear the
value of that education.
The federal support of education is the fundamental building block for
all financial aid across the country. The U.S. government has recently
increased its support of higher education. In addition, I recently
received a letter from Secretary Spellings in response to a letter we
had written to her conveying our concerns about the credit available
for student loans. Secretary Spellings said that they are committed to
meeting the federal demand so that the sub-prime loan crisis will not
affect student loans.
At Baylor, we spend a large amount on scholarships so that we can meet
the needs of middle-class students who wish to come here. But as I've
said, we need to be doing more with endowment to minimize the debt
incurred by our students.
So we're trying to provide clear and accurate information, trying to
control our costs, and trying to make financial aid available through
endowments and through the university's operating funds.
Baylor Line: How important is the endowment to enhancing the funding that Baylor provides students?
Lilley: There's no word big
enough to describe just how important our endowment is to enhanced
funding for our students. It's crucial. As far as I'm concerned, it's
the top priority. As I mentioned earlier, our endowment-per-student
figure is considerably smaller than those at other private universities
in America. Baylor is overwhelmingly the largest private university in
Texas, so our endowment needs to be overwhelmingly the largest.
Baylor Line: What do you perceive as the value of a Baylor education that makes the price of attending Baylor worth the cost?
Lilley: We know that the market
considers Baylor an outstanding value. Baylor was ranked among the
nation's top fifty best-value private universities in the April 2008
issue of Kiplinger's Personal Finance magazine. Kiplinger's
ranks Baylor second in the "total costs" category and thirty-eighth
overall on the "best value" list. Baylor ranks thirteenth after
need-based aid is applied.
But personally, I think it comes down to our central mission, which has
two pillars—academic excellence and Christian commitment in the
historic Baptist tradition that produces a caring environment.
Combining these commitments to a very clear outcome—that of preparing
students to become the servant-leaders of tomorrow—seems to me to be a
great value.
Our students graduate with an expanded consciousness spiritually,
intellectually, and socially. Baylor has accomplished so much in 163
years, and it is our role to try to imagine what it will be in the next
163 years. We must have constant vigilance about improving Baylor and
keeping a Baylor education accessible to great students, no matter what
their social or financial background may be. Baylor alumni have done so
well and have done so much good in this world, and we hope we're
preparing the next generation of alumni to follow in their footsteps.
This interview with Baylor President John M. Lilley was conducted on March 5, 2008, by Todd Copeland.
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