Academic Year 2006-07

This letter, the culmination of a process stretching back many months and involving input from the various sectors of the community, outlines the parameters we will use in setting the University’s budget for Academic Year 2006-2007.

As always, the two key realities of our budgeting process are these: our largest single source of revenue is tuition; and, our largest single investment supports the people who make NYU what it is. We approach each year’s budget keenly aware that a careful balance must be struck: on the one hand, to ensure that the cost of attending NYU does not put undue pressure on our students and their families; and, on the other hand, to recognize the value of our faculty, as well as the administrators and staff who make their work possible.

As we contemplate this balance each year, we also must remain cognizant of our duty to secure the gains NYU has made in recent years, even as we continue the University’s advancement as an institution by increasing the size of our faculty, by enriching our programs of research and teaching, by enhancing the quality of student life on campus, and by continuing the modernization and expansion of our facilities and infrastructure. And, we must do all of this while remaining mindful of the importance of the need to direct additional resources for financial aid, so that an NYU education can be as widely available as possible.

Each year, the context in which we craft a budget to balance these goals presents challenges; some are singular, some are cyclical, some are short-term, some are long-term. The state of the nation’s economy affects our budget – making it more or less costly to borrow, or diminishing or increasing the income earned by the endowment. Or, we may confront a sharp and unanticipated spike in our expenses, as we have this year with the cost of energy (which alone consumed $12 million more in the 2006 budget than anticipated). All of this, too, goes into the mix.

For Academic Year 2006-2007, total undergraduate charges (tuition, fees, room and board) will increase by 4.8% percent; tuition alone will increase by 5.4%.

There is no doubt that the cost of an NYU education is high; and, though the increase we are announcing is likely to be consistent with the increases announced at other elite private universities (in recent years, our tuition increases have proved to be at or a little below the median for our peer group), there is no doubt that this increase will create pressure on our students. Again, we have tried to strike a balance: a greater tuition increase to fund advances beyond those listed below would be too onerous; a lesser increase would impose unacceptable restrictions on expenditures necessary for academic excellence. We are heartened that, despite our high tuition, an NYU education is among the most attractive in the world. And, we will use some of the resources provided by the tuition increase to provide additional financial aid to ameliorate the effect of this increase on our neediest students (specifically, we will increase financial aid by six percent, or $12 million). With regard to financial aid support for graduate assistants: their support for 2006-07 and 2007-08 was previously announced. For 2008-09, GAs will receive a minimum stipend of $22,000, a $1000 increase; the University will continue to provide them with free tuition, and the University will continue to pay 100 percent of their healthcare premiums; we have every reason to expect that this will continue to make our financial aid packages for GA’s among the best in the country.

The heart of the university (and the greatest gift we give to our students) is the finest faculty we can provide. Thus, a large part of the revenue created by the tuition increase will be invested in our faculty. This allocation will take many forms. First, of course, is the continued expansion of our full-time faculty – an infusion of talent and ideas which rewards our existing faculty with new colleagues, even as it rewards our students by reducing our faculty-to- student ratio. Second is a set of programs, ranging from innovative approaches to faculty housing (such as the Housing Opportunity Program and the Roosevelt Island Initiative) to choices for investment in a range of benefit program enhancements identified by the Faculty Senators Council as important to our faculty generally. And, there is investment in a 3% merit-based pool for faculty as well as the administrators and staff not covered by contract, with an additional amount (above the 3 percent) reserved for promotion, equity, and retention.

A portion of the revenue provided by the tuition will also be devoted to supporting a set of specific enhancements and new initiatives suggested in the budget submissions of the Student Senators Council.

• We will provide additional support of All Square groups and organization, by increasing over a 5-year period the budget of the All Square Budget Allocation Committee by $90,000.
• The Student Health Center (SHC) is expanding health care access to NYU students. Starting this fall, primary care and women's health services for urgent care and routine needs will be covered through student fees, meaning either no cost or reduced cost at the point of service to all matriculated NYU students. Short-term counseling, wellness, and health education services will remain free of charge.
• We have authorized Public Safety, Housing and Residential Education to collaborate on a four-year plan to install the equipment necessary to expand the successful Union Square guest policy to the majority of residence hall system.
• We will create new lounge and study spaces: the Kimmel Market Place and Palladium dining area will be reopened after dinner hours this semester as study spaces; a new lounge will open next fall 2006 at 19 University Place; the computer resource center in the OASIS office will be reconfigured to provide lounge space in that area; a new lounge will be created in the 26th Street residence hall this summer, and the Residential Education Office is working with the IRHC to develop a priority list to upgrade lounges in 11 residence halls.
• We will continue to build programs at the Wasserman Center for Career Development, the magnificent new facility opened in the Palladium this year.

Finally, additional resources have been reserved for benefit enhancements or initiatives suggested in the budget submissions of the Faculty Senators and Administrative Management Councils. Among the recommendations from these groups still being reviewed for possible further allocations are child care initiatives; benefit enhancements in dental benefits; revisions to limits on out-of-pocket maximums for medical benefits; and reductions in paying out-of– pocket fees associated for tuition remission benefits. As specific policy options in these areas are refined over the coming weeks, we will continue our discussions with the Councils over the summer to determine which of these initiatives offer the most potential benefit.

There have been some difficult moments this past year. I want to thank you for your patience, equanimity, and positive spirit, which have helped maintain the normal rhythms of daily life on our campus. Most important, much has been accomplished over this past year; however, there are many opportunities still to be seized and we are well positioned to continue our advance.

Let me close by saying that it is a great personal and professional privilege to represent this wonderful university, and to work with you to create an even better university now and for future generations. Good luck with the remainder of the school year, enjoy the rest of the spring, and have a good summer.