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Frequently Asked Questions

on the Impact of the Current Financial Crisis on Susquehanna and its Students

Is the construction of West Village and the new science building the cause of the increases in tuition by thousands of dollars each year?

Costs related to science building construction will not factor into university expenses until the fiscal year beginning July 2010. The primary causes of tuition increases are the dramatically rising costs of electricity and health care, additional faculty and staff to serve our students, and construction and operating costs associated with the new West Village dormitories. Because of deregulation in our area, the cost of electricity alone is expected to increase by 90 percent over the next two years.

In addition, the economy is increasing competition for philanthropic dollars, and donors have less to give. Annual funds across the country have been hit hard, and ours is no exception. Nevertheless, this year’s tuition increase of 4.5 percent is our lowest percent increase in seven years.


Is tuition expected to decrease once the new science building has been completed and/or opened?

Loan repayment and operating costs for the Natural Sciences Center will continue for many years beyond the facility’s opening, so tuition will not decrease. The pool of financial aid dollars, however, has increased this year to help the anticipated needs of families struggling with the economy. While these are challenging times, we believe that the value of a Susquehanna education will increase in the years ahead, and that the contributions of our alumni as citizen-leaders will be ever greater.


Does Susquehanna have the funds to complete the new science building and the West Village residence halls?

Yes. These projects are being funded by a combination of fundraising, reserves and borrowing. Fundraising is on target, reserves are in hand, and we successfully completed a new debt issuance and have those proceeds in hand as well.


If the current economic conditions continue for a prolonged period of time, what is the impact on Susquehanna if parents/students cannot pay tuition and room and board?

The answer depends on the length and severity of a recession, what happens in the credit markets, and how many families are affected and to what degree.

Thanks to years of careful financial management which have produced substantial reserves, Susquehanna is in a better position than many other small, tuition-dependent colleges and universities to weather a protracted, deep recession that results in lower enrollments and higher financial aid needs for several years. Susquehanna has been through severe recessions before, and is financially more secure than it was during those periods.

We have begun planning for a variety of scenarios, including ones based on modest to significant enrollment drops. Our goal is to be sure that we continue to deliver an excellent education within available resources. We think we can do that, and we believe that families will continue to recognize that higher education is the best investment they can make in their children’s future, especially in economically turbulent times. Our task as a community is to remain focused on our students’ needs, and to deploy precious resources judiciously and creatively on their behalf.


Why have college costs risen so much?

The factors contributing to the increased cost of higher education are many and vary by institution. While the educational experience at Susquehanna has always been of high quality, additional resources have made it possible to deliver what we believe today is truly an exemplary undergraduate education. Students receive a highly personalized education from Susquehanna in an environment that is intensely focused on their learning needs.

  • Over 90 percent of our faculty now hold the Ph.D. or equivalent terminal degree. We have increased significantly the number of full-time faculty per student. The result is that every student has the opportunity to work closely with faculty in understanding the latest developments in their fields.
  • Additional faculty have made possible a new curriculum that represents best practices in undergraduate education. In addition to a strong focus on the liberal arts, this curriculum also includes capstone and cross-cultural experiences that we believe will better prepare our students to live and work in an unpredictable and ever-changing world.
  • Students and faculty are supported by facilities that have been dramatically improved. Because we believe that the best undergraduate education focuses on development of mind, body and spirit, these improvements include not only academic facilities but also residence halls, dining and social spaces, the sports complex and athletic fields.

The motivation to improve also comes from the more pragmatic need to succeed in the marketplace. The college search and selection process is intensely competitive, with those institutions perceived as offering the best student experience attracting a larger share of the available student market. Schools offering the best faculty, the best facilities and the most comprehensive student experiences attract more and better students. We cannot ignore the increased demand for amenities by our students and their families. Residence halls are a good case study. Twenty-five years ago, all of our residence halls, like those at institutions across the country, were the traditional design with long floors with double rooms off of each side of the corridors and shared bathrooms. This type of residence hall was economical to build and reflected the modest expectations of families. Today, however, a majority of students attending college grew up with a very different residential experience. Most have never had to share a bedroom with a sibling and are used to cable television, broadband access and privacy. To attract and enroll students, colleges and universities adapted to these changes by constructing suite- or apartment-style housing. Schools that lagged in the continuous improvement of the collegiate experience paid the price in the marketplace with students choosing to enroll elsewhere.

It will be interesting to see if these dynamics change in this new economic climate.


How has the financial crisis affected Susquehanna’s fiscal condition?

Susquehanna remains strong financially, but we are nevertheless feeling the impact of weakening financial markets.

Over the last 13 months, the value of our endowment has declined by about 35 percent, much of that in the last 30 days. As of Oct. 30, its market value was $81 million. Our policy allows us to spend 4.5 percent of the endowment’s three-year average market value, as calculated on Sept. 30 of the previous fiscal year. Using the three-year average protects against sharp spending drops from one year to the next, so the effect of the current year decline will not have a significant impact until Fiscal Year 2011. The funds are conservatively invested in five asset categories: large cap U.S. funds, small cap U.S. funds, international equities, real estate and private equity. The endowment is not invested in hedge funds, and the allocation to private equity is less than 2 percent. Although we rely on endowment income to fund our operating budget to a lesser extent than many institutions, a continuation of this declining trend would have negative financial consequences for the institution.

Interest income earned on reserves is used to offset operating expenses. Our $50 million in cash and reserves is invested in Treasury bills and collateralized bank cash. The tradeoff for safety is less return, and we are currently earning little or no interest.

On the positive side, our historically prudent approach to managing our finances is also evident in our debt structure. About 93 percent of our $74 million in total debt is in fixed-rate instruments, which means only a small portion of our debt is subject to swings in interest rates. Our $5.3 million in variable-rate debt has recently swung from interest rates of 1.6 percent to 8 percent and is now down to 1.9 percent.


Has the market crisis had an impact on applications for admission?

Applications for admission remain strong and ahead of last year’s record-setting pace. Because we rely heavily on revenue from tuition, room and board to cover the costs of a Susquehanna education, this is good news.


Will the financial crisis affect Susquehanna’s admissions strategy?

Susquehanna has a longstanding need-blind admission program. Admission for qualified applicants will be based on their strong academic record as well as their demonstrated leadership and commitment to service. We will make every effort to assist those families with demonstrated financial need to finance their education.


Will Susquehanna raise tuition next year?

The Board of Trustees typically addresses the issue of tuition at its February meeting. At this time, we are considering a number of strategies to both meet our financial obligations and to mitigate the impact on Susquehanna families. NOTE: We will not be raising tuition for the second semester, even though a growing number of institutions have already announced such intent.


How will the volatility in credit markets affect financial aid?

We are watching closely the effect of the marketplace on student loans. To date, we have been able to point virtually all students to reasonably priced student loans. We pledge to honor all our present financial aid commitments. Students currently receiving financial aid can expect to receive aid throughout their time at Susquehanna, as long as they meet the conditions of their aid packages, including demonstrating financial need for need-based aid programs.


What if my family’s financial situation has changed?

As always, we will consider changes in your family’s situation when assessing your ability to pay for tuition, room and board. If you believe your circumstances have changed and that your situation warrants a review, please send a letter or e-mail to the Office of Financial Aid (sufinaid@susqu.edu) describing in depth the change in your financial circumstances.


Will the crisis change how Susquehanna calculates aid?

Our expectation is that we will continue to base future financial aid packages on the assumptions that have guided our program for many years. We would encourage anyone with concerns about matters related to financial aid to be in touch with our staff in the Office of Financial Aid.


Can I apply for financial aid now even if I have never applied for aid in the past and what is the process?

You may apply for financial aid by following the process that is outlined on our website. You may also contact the Office of Financial Aid by phone at 570-372-4450 or by e-mail at sufinaid@susqu.edu.


Can Susquehanna University help families find loans?

The Office of Financial Aid can recommend lenders who have given very good service to our families. While we cannot tell you which lender to select, we can provide guidance for the process. In addition, we can provide up-to-date guidance on the current government and private loan programs.

Over the past two years, Congress has expanded eligibility for federal education loans. We strongly urge students and families to take advantage first of the Federal Loan Program, beginning with Federal Stafford loans and then considering Federal Parent PLUS loans, before turning to alternative/private loans. Interest rates, fees and qualification requirements have risen dramatically on alternative/private loans. Before choosing a loan product, borrowers should carefully weigh the costs and benefits of each. Our financial aid staff is familiar with all loan types and stands ready to advise students and their families.


Will the current financial crisis affect Susquehanna’s academic programs?

Providing a high-quality educational experience for our students will continue to guide our decision making. This is a fundamental institutional value. Susquehanna has and will continue to have the financial strength to sustain its academic programs.


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