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September 14, 2004

Hoosiers Squeezed By Rising Scholarship Costs

FROM THE HOOSIER STATE comes another round of distressing news regarding the shaky financials of Indiana University athletics.

Just last week Clips ran an excerpt detailing IU’s sad story of chronic deficits, aging facilities and an underperforming (to put it mildly) football team.

The latest news is a microcosm of the obstacles and challenges that face dozens of other-than-top-tier D1 schools.

In a nutshell, non-elite schools have been overwhelmed by steeply rising expenses (Title IX add-ons and burgeoning scholarship costs). Meanwhile, on the income end, many schools have experienced less state funding and lackadaisical donor participation. And few of these non-elite schools are able to enjoy the profitability of filling a 70,000-seat stadium for a half dozen games each year.

IU has suffered the worst of all these ills. The spotlight has been on the dramatically increasing cost for scholarships. Increasing at almost 10% a year, funding them has become a major headache. Consider the numbers:

• IU’s athletic budget is $36 million; scholarship costs have grown to $7.2 million.

• Indiana’s deficit last year was $1.8 million.

• IU is saddled with a disproportionately high number of scholarships requiring out-of-state tuition. 75% of IU’s scholarships go to out-of-staters. (Out-of-state tuitions are $26,000 while in-state are $14,000).

Meanwhile, prospects are slim for increased revenues:

• The Indiana football team has been a notably poor performer. It has not had a winning team since 1994, and attendance is among the lowest in all of the Big Ten.

• IU’s Memorial Stadium is aging and there are no renovations (with revenue-enhancing club seating) planned.

• The IU Varsity Club, the primary donor for scholarships, has had donation increases of 32% over the past two years, and even this has not been enough to keep up with the rising scholarship costs.

Good luck to the Hoosiers.

(this 302 word excerpt—with attendant commentary—was distilled from a 669 word article from the Fort Wayne News-Sentinel of 9-11-04 and a 2342 word article from the Fort Wayne Journal-Gazette of 8-29-04)