Cooper Union will cut in half the full scholarships it has traditionally awarded to incoming undergraduates beginning in the fall of next year, the Board of Trustees announced today.
Mark Epstein, chairman of the Board, made the announcement to a packed room at the school’s Great Hall this afternoon.
Mr. Epstein said the school would continue to offer larger and even full scholarships to those in need and would maintain a needs-blind admissions policy, but the long-dreaded and much-protested cut to full scholarships, which have been awarded to all students for over 100 years, was a necessary step toward financial solvency.
“We cannot rely on the rent income from the Chrysler Building to solve our long-term problems,” his statement said. “Even though our rent income from the Chrysler lease is scheduled to increase dramatically in 2018-19, deficits are forecast to grow forever thereafter. This is because the rent income remains flat for a decade, followed by a smaller increase, which then again remains flat for a decade. From 2019 until the next rent increase, the annual compound growth rate of our Chrysler income (rent plus tax equivalency payments) is 1.4%, well below projected inflation.”
Mr. Epstein said that the board couldn’t find ways to close a predicted $12 million annual deficit via downsizing or budget-cutting. “Even significant reductions over and above the $4 million that already has been cut would require maintaining the growth in our expenses below 2% per year indefinitely,” his statement read. “With our health care costs alone projected to rise at 7.5% per year, such a plan would be wishful at best.”
The Board came to its decision last week, prompting Free Cooper Union, which has vigorously opposed tuition charges and is tweeting from the meeting, to ask via Twitter, “Why has the board kept the community in the dark till this surprise announcement?”
According to Free Cooper Union’s account of the meeting, incoming students will be charged $19,250 in tuition starting in the Fall of 2014. Last month, the school announced that incoming students would continue to get full scholarships in 2013.
The full statement from Mr. Epstein is reproduced below. The Local has a reporter on the scene and will update with more from the q&a session.
“After eighteen months of intense analysis and vigorous debate about the future of Cooper Union, the time has come for us to set our institution on a path that will enable it to survive and thrive well into the future. Consequently, the Board of Trustees voted last week to reduce the full-tuition scholarship to 50% for all undergraduates admitted to The Cooper Union beginning with the class entering in the fall of 2014.
“Under the new policy, The Cooper Union will continue to adhere to the vision of Peter Cooper, who founded the institution specifically to provide a quality education to those who might otherwise not be able to afford it. Consequently, we will provide additional scholarship funding for those with need, including full-tuition scholarships to all Pell Grant-eligible students. We intend to keep admissions need-blind. Current undergraduates, as well as those undergraduates entering in the fall of 2013 will continue to receive the full-tuition scholarship for the duration of their undergraduate education.
“Our priorities have been and will continue to be quality and access, so that we will remain a true meritocracy of outstanding students from all socio-economic backgrounds.
“We also are committed to sustaining the Cooper ethos: the development of talented students into extraordinary citizens. Students who are drawn to Cooper are not only top students, but highly-motivated individuals, focused on their area of study. Our students are collaborative and genuinely supportive of one another. The steps we are taking are designed to enable us to continue to uphold and enhance the immersive, conservatory-style of education of which we are so proud.
“In arriving at our decision, the Board thoroughly analyzed a wide range of options, mindful of how the full-tuition scholarships have been central to our identity. Being mostly alumni ourselves, we share your sense of the loss of this extraordinary tradition. In the final analysis, however, we found no viable solutions that would enable us to maintain the excellence of our programs without an alteration of our scholarship policy.
“We cannot rely on the rent income from the Chrysler Building to solve our long-term problems. Even though our rent income from the Chrysler lease is scheduled to increase dramatically in 2018-19, deficits are forecast to grow forever thereafter. This is because the rent income remains flat for a decade, followed by a smaller increase, which then again remains flat for a decade. From 2019 until the next rent increase, the annual compound growth rate of our Chrysler income (rent plus tax equivalency payments) is 1.4%, well below projected inflation.
“The Board also considered the possibility of downsizing the institution while maintaining our current scholarship policy. We concluded that there are no viable downsizing options that would not involve closing one or more of our three schools; reducing the enrollment in our existing programs does not produce proportional savings. Neither can the projected $12 million annual deficit be closed through budget-cutting. Even significant reductions over and above the $4 million that already has been cut would require maintaining the growth in our expenses below 2% per year indefinitely. With our health care costs alone projected to rise at 7.5% per year, such a plan would be wishful at best.
“The new programs proposed by the faculty are innovative, and the administration will work with the faculty to launch them as appropriate; our belief in the potential of these programs is one of the factors that has enabled us to offer the minimum 50% scholarship to all students. However, the competitive environment and reasonable caution lead us to estimate that these programs will only close about one-third of the deficit.
“At the same time, maintaining the highest standards of excellence means that we must constantly aim to improve through investment. We must engage in a continuous process of strengthening our academic programs, our faculty, and the clarity of our academic reputation. The institution will invest in our programs and our faculty to ensure that we always are, and are regarded as, equal to the best.
“New York City has become a magnet for entrepreneurial innovation in technology and design. The Cooper Union must play a key role in the city’s transformation, as it has historically. For students and faculty, New York City is their professional home, their studio, their laboratory, and their subject matter. New York is a crucible for addressing some of the great challenges of our time: sustainable urban design, climate change, energy, healthcare, economic disparities, and the role of art in society. By achieving financial soundness, Cooper is a perfect platform to carry out its work.
“Although we appreciate that these decisions are difficult for everyone to accept, we look forward to working together with all of you to building a future that will ensure the preservation of Cooper Union as a great educational institution that remains true to Peter Cooper’s founding principles.”
Update | 4 p.m. Students Demand Answers As Cooper Union Ends Full Rides