President's response to college affordability

Mount Mercy sealSpecial memo from Mount Mercy President Christopher Blake: 

Like many of you who are invested in higher education, I watched with interest President Obama's State of the Union address, in which he unmistakably threw the weight of his office firmly behind the issue of college affordability. This is a good thing for our country, our students and our colleges.

Institutions across the map have been called on to utilize federal loans and grants such as the Pell Grant, Perkins loans and work study dollars to cap or reduce tuition. The more that America’s institutions can limit tuition costs, the more the federal government will support access. For Mount Mercy, where students annually rely on federal programs and support, those changes are likely to be significant for future financial aid initiatives.

Clearly, the cost of education is of critical importance. By its very nature, the subject demands the attention and deliberation of those who work together for the cause of providing an education to all individuals – an education that opens doors, opportunities and futures. Mount Mercy welcomes this re-energized public discourse on affordability and the federal administration's efforts to incentivize restraint on the ever-growing cost of higher education.

A glance at the national landscape reveals alarming trends. According to the College Board, tuition has increased over the past five years at America's private colleges and universities an average of $3,730. Public four-year institutions have similarly increased tuition in ways that outpace inflation.

While it is easy to view these figures (and others) and see only escalating costs and increasingly heavy student debt – now pegged at approximately $25,000 nationally on average for college graduates – these numbers often do not paint the entire picture. Below the surface there is an alternate reality: that increased financial aid and scholarships have removed or reduced any increase in the net tuition revenue for colleges – revenue that has remained flat for the same five year period.

Our Efforts
At Mount Mercy we are vigilant in addressing student needs and containing tuition, and we will continue to look for ways to trim costs so our students don’t have to. In the past few years our institutional discount rate – the percentage we discount the cost of tuition – has risen by over 5 percent, and our freshmen now have their tuition discounted by approximately 46 percent. We have helped secure federal loans to approximately 1,300 students in 2011-12, totaling $14M. This year we are granting academic and athletic scholarships and grants to the value of $8.1M, of which only $800,000 is paid for by funds from our endowment and annual scholarship gifts. The remainder is funded directly from our operating budget.

Our efforts have made it possible to maintain tuition levels that are less than the median of Iowa's private colleges, and our students walk off the stage with some of the lowest debt in the state (see pull out stats below). Many of Mount Mercy's undergraduate and graduate students pay less for their degrees than their counterparts in the public Regents' institutions.

But this is not enough. We cannot be complacent. We must continue to limit the cost of education, to make savings where possible without compromising academic quality, and to assist in mitigating student debt, all of which is a natural extension of our founders’ mission. This spring I am tasking our Financial Aid Office, in conjunction with expert faculty and staff, to launch a Student Financial Literacy program, designed to help students graduate on time with lower debt. We shall also review comprehensively ways to strategically construct tuition so that our future strength and our students’ needs stay firmly lazered in our sights. Fittingly, this year Mount Mercy’s tuition increase, before discounting, will be the lowest rate of increase in a decade.

Mount Mercy has a proven track record and ongoing commitment to see students succeed at all stages and walks of life, including a high percentage of first generation students. Our return on investment continues to push the needle forward, set the bar higher and secure better results for our students. Following in the footsteps of our founders, we will continue to use wisely every dime in order to advance the Mercy mission and extend its reach for individuals in need of higher education. We will strive to maintain that same quality and value for money, and to partner with donors and supporters who share our dedication and make secure our modest endowment so that we can support learning in perpetuity, now and for generations to come.

Godspeed,

Christopher Blake, Ph.D.
President

MOUNT MERCY NUMBERS AT A GLANCE

Low Student Debt:

  • Our 2011 graduates had an average debt load of $24,242 --- more than $1,000 lower than the 2010 national average
  • Average debt load at the Iowa Regent Universities in 2010:
    • Iowa State - $30,062
    • University of Iowa - $27,391
    • University of Northern Iowa - $25,735

Low Default Rate:

  • Our 2009 cohort default rate was 1.8 percent, compared to the national cohort default rate of 8.8 percent
  • Statewide the average cohort default rate is 11.5 percent
  • The national rate for private institutions is 4.5 percent

Student Success Indicators:

  • 95 percent of Mount Mercy degrees are professionally-related and combine liberal arts excellence with career preparation
  • 93 percent of Mount Mercy alumni are employed full-time or enrolled in graduate schools within nine months of graduation
  • 81 percent of recent alumni are working in their expected fields
  • 99 percent of Mount Mercy alumni repay their student loans on time
  • 100 percent of first-time freshmen receive financial aid

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