Be on the lookout for the December issue of The Blue & Whitearriving on campus this week. In the meantime, Bwog will honor our heritage/amorous affair with our mother magazine by posting features from the upcoming issue. Such treats include a discussion of Occupy Wall Street with Columbia professor Todd Gitlin, a look at Columbia’s proposal for a new engineering campus, and the politics of space in Lerner. Below is Peter Sterne’s investigation into Barnard’s budget woes.

Colleges are in the business of education. Though they are large private corporations that manage hundreds of millions, if not billions, of dollars a year, as non-profits, institutions of higher learning have a culture distinct from that of most for-profit private corporations. As Greg Brown, Barnard College’s Chief Operating Officer, says of the industry, “This isn’t corporate America, where the COO makes 100 times what anyone else makes.” In order to fulfill its mission, though, Barnard has to manage its money well, which requires it to make decisions that, in the short-term, may not be seem to be in the best interests of its students.

Barnard, eking out its existence on a tiny endowment, has faced financial difficulties for years, and as a result, recently adopted policies aimed at increasing revenue that have upset many students. Last year, it required all students, even those commuting to school or attending part-time, to purchase a mandatory meal plan, which costs at least $300 a semester. In October, Dean of Barnard College Avis Hinkson officially ended the informal practice of allowing some students to enroll as part-time students for their final semester of senior year, and paying significantly less for these fewer credits. The elimination of part-time enrollment set off a wave of controversy and renewed scrutiny of Barnard’s budget.

Technically, Barnard has always required all students to enroll as full-time students for all of their eight semesters. In practice, though, any student could petition for part-time enrollment, and these petitions were almost always granted. Barnard thus developed a culture of part-time enrollment, and in some cases academic advisers even encouraged students to enroll part-time. Now that the informal policy has been eliminated, many students are concerned. “It will certainly limit options of being ‘strong and beautiful’ on campus, given that students generally took this chance to take on special jobs and full-time internships,” says Hannah Goldstein, BC ’13. An outspoken critic of the change, she had planned to enroll part-time for her final semester next year and warns that the change “will encourage finance-conscious seniors to cut their time here short,” prompting them to graduate a semester early rather than pay for the cost of a final full-time semester.

When Hinkson discussed the policy at a Barnard Student Government Administration town hall meeting last month, she emphasized that it would encourage community-building by encouraging students to stay on campus and take more classes together, but also acknowledged that the decision was a financial one. The difference between a student paying full-time and part-time enrollment is around $12,000. Barnard’s administration would continue to lose out on half a million dollars worth of revenue if, as in past years, 40 students opt for part-time enrollment each year. “Every little bit counts,” says Brown, Barnard’s COO—especially since Barnard has been running a roughly $2.5 million budget deficit for the last few years.

While the immediate deficits are partly the result of the construction of the $45 million Diana Center, Barnard also faces structural financial problems. Perhaps the biggest obstacle to financial security is Barnard’s pitiful endowment, which in 2011 stood at a mere $215.5 million. This is, unsurprisingly, dwarfed by Columbia’s (currently in excess of $7 billion), but even compared to its peer liberal arts institutions it seems exceptionally small. Top liberal arts schools like Amherst, Williams, Wellesley, and Smith all have endowments north of $1 billion, and even Mt. Holyoke and Bryn Mawr, two less selective women’s colleges, have endowments more than twice as large as Barnard’s.

“Barnard was started as an idea—‘Let’s educate women,’” says Mica Spicka, BC ’13 and the SGA’s junior representative to the Barnard Board of Trustees. “It wasn’t started because people had a pile of money and said, ‘Let’s invest this in a new college.’” For the first few years after it was founded in 1889, Barnard did not even have an endowment. Even after establishing one in 1898, Barnard always had trouble raising funds independent of Columbia. Spicka speculates that alumnae of Barnard who married alumni of Columbia tended to donate to Columbia rather than Barnard. “A couple where the wife went to Barnard and the husband went to Columbia will probably give to Columbia, especially if they have a son,” she says. For whatever reason, the rate of alumnae giving is relatively low at Barnard—only about 30 percent, compared to 36 percent at Columbia and 50 percent at Wellesley.

The small endowment and low giving rate means that Barnard must rely almost entirely on tuition and room and board fees to cover their yearly operating budget of $154.3 million. According to Brown, 78 percent of Barnard’s annual revenue of $151.5 million comes from tuition and room and board, while a mere six percent comes from the endowment. This puts Barnard in a precarious situation, especially since operating costs, particularly financial aid, continue to rise. Ten years ago, Barnard spent $13.9 million on need-based financial aid. Now, they spend $31.9 million, most of which does not come from the endowment. According to Barnard’s “2011 Data Book,” a report on the school compiled by the Office of Institutional Research, Barnard covers only 14 percent of financial aid costs with endowment money, while its “Peer Schools,” a precocious bunch ranging from Harvard and Princeton to Bryn Mawr and Trinity, on average use endowment money to cover 32 percent of financial aid. Barnard, to a greater degree than most other elite schools, is forced to rely on the aforementioned tuition and room and board fees.

Since most revenue comes from students’ tuition and fees, and operating costs continue to rise, tuition must increase dramatically to compensate. Last year, tuition alone was $38,868 per year, a tremendous leap from the price tag of $22,942 in 2000, and the college brought in $89 million from tuition and fees last year, compared to less than $50 million in 2000. Without the tuition increases, Barnard probably could not afford to meet its students’ full financial needs. Then again, if tuition were not $16,000 more per year than it was in 2000, less students might need financial aid.

At any rate, Barnard can’t just keep raising tuition prices indefinitely. “I think the days of 5 percent annual tuition increases are over,” Brown says. Instead, Barnard is planning to launch a major capital campaign next year to raise hundreds of millions of dollars. Those with knowledge of the new campaign are keeping quiet on the details, but it seems likely that a portion of the money will be used to fund the endowment, while the rest of it will be used to expand need-based financial aid and faculty salaries and benefits. According to Brown, these are two of Barnard’s top priorities. Allowing students the unofficial option of part-time enrollment is not.

Hopefully, the upcoming capital campaign will relieve some of the immediate pressure on Barnard’s budget, but Barnard will have to make more difficult financial decisions in the future. When that time comes, it would be wise to remember the lesson of the full-time enrollment controversy: just because a decision is financially sound does not mean it should be taken, especially without significant input from the students affected. Otherwise, they risk another backlash.