Educational costs have risen more quickly than inflation over the past few years (reflected in the Higher Education Price Index-HEPI-used to adjust the figures in the second graph below), especially as colleges and universities try to keep up with technology, stay competitive on salaries, and support educational efforts in new ways. Many schools have also faced stagnant or declining endowment values, which has put pressure on other revenue sources, such as tuition, to cover increased costs. In addition, a reduction in state and federal financial aid influences our ability to balance the budget.

The Budget Steering Committee has had discussions over the last few months related to the College's comprehensive fee and our target for it. For the 2003-04 academic year, we increased the comprehensive fee by 4% and, for this year, we increased it another 5.25%. Each of the last two years, we stated that, in anticipation of the completion of the strategic plan (and a comprehensive fee policy), our goal was to balance the budget while addressing our financial objectives. The FY 2006 Budget's comprehensive fee of $34,814, or a 6.5% increase, reflects this goal while also permitting us to fund our highest priorities and balance next year's budget.

The graphs below show the changes over a 10-year time frame, including a projection for 2005, in our tuition and fees and grant and scholarship expenses on a per student basis, as well as the discount rate. Since increases are to some extent driven by inflation, the second graph shows tuition and fees and scholarships and grants indexed to the Higher Education Price Index ("HEPI"), a standard index of the inflation of prices of goods and services in the higher education market. The graphs also reflect a change in accounting for, and reporting of, students attending non-Grinnell off-campus study programs beginning in FY 2003.