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Purdue Adjusts Budget To Pay For Tuition Freeze

The Purdue administration is looking to save $10 million this year so it can afford a recently announced tuition freeze.

mitch daniels

Photo: Steven Yang/Purdue University

Indiana Gov. Mitch Daniels speaks in Loeb Playhouse after being elected Thursday, June 21, 2012, by Purdue Board of Trustees as the university's 12th president. Seated is Trustees chair Keith Krach.

Purdue administrators are making different investments in an effort to afford a tuition freeze. The university estimates $5 million will be earned by improved cash management policies.

Vice President and Treasurer Al Diaz says a majority of that will come from the way cash balances are handled.

“We put much of the cash into interest-bearing accounts that yield one or two-percent interest. But there‘s an amount that we’re sure is going to stay as a cash balance for some period of time that we can put into the endowment and get much higher rates of return,” Diaz says.

The university has announced a little more than $10 million in savings and new revenue that will go into a Student Affordability and Accessibility Account. The goal is to set aside $40 million to afford the proposed freeze on student tuition and most fees the next two years.

President Mitch Daniels says he is reviewing suggestions from university employees on ways to save money. He identified some during a forum Thursday morning, such as better managing heating and cooling systems, reducing internal mailings from units on campus, and installing motion sensors to turn off lights when rooms are not in use.

Daniels also says he continues to hear concerns about a pay freeze for administrative and professional staff earning more than $50,000 a year.

Data from the U.S. Department of Commerce‘s Bureau of Economic Analysis show per capita personal income in 2011 for Tippecanoe County was $31,172, and it was $35,689 for Indiana. The faculty is not affected by the pay freeze, but Daniels thinks it would make a great statement if individuals or departments would voluntarily give up raises the next two years.

“I do think it was perfectly fair to ask the best paid people here to forego a raise while protecting those of low or more modest rates of pay,” Daniels says.

Professor Paul Robinson, who chairs the University Senate, says even though they are excluded, colleagues have approached him about voluntarily foregoing a raise.

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