Rutgers unrestricted reserves rise to $770 million
While students continue to pay a rising tuition, Rutgers University holds $770 million in reserves, although the use of these funds and where it comes from is unclear.
Rutgers spokesperson E.J. Miranda said unrestricted funds are accumulated over time and designated by the University to support specific programs ranging from funding education to student activities to agricultural experiment station activities.
“Currently, there is approximately $770 million in unrestricted funds that come from a variety of sources, including general fund balances, clinical income, revenue from sales and services,” Miranda said.
David Hughes, president of the American Association of University Professors—American Federation of Teachers (AAUP-AFT), said anyone concerned about the rising cost of higher education should think about the amount of money that is in unrestricted reserves.
“There is a surplus lying around and that should be spent on lowering the cost of education or on paying part time lecturers more on something for the benefit of instruction, enlarging the curriculum and hiring more faculty,” Hughes said.
Some of the money is earmarked for specific programs, meaning once it is designated for athletics, that money cannot be used for anything but athletics, Hughes said.
“We have all these ideas of what should be done with this surplus money,” he said. “The administration’s first answer is to say it is not an available surplus. It is money pledged to other things and we cannot take it and apply it to any of those good things you want to apply it to.”
Hughes noted that Rutgers' unrestricted reserves has increased by $62 million from last year, proving the money is not being spent fast enough.
Course fees play a part in the reserves, albeit a very small part, yet how much course fees contribute to the unrestricted reserve is unclear, Hughes said. For example, the Dance Appreciation course, which roughly 1,000 students take each semester, has a $170 course fee.
“You don't have $100,000 in performances per semester in a Dance Appreciation course,” Hughes said. “We found most of that money is being banked and some of it is going to unrestricted reserves, so that represents another overcharge to students that we would call ‘backdoor tuition,’ because the Board of Governors approves tuition and then tuition appears on top of that.”
Hughes said the University transferred $30,000 to unrestricted funds, which made up part of the $62 million.
“Students are actually generating surplus unrestricted funds by overpaying course fees,” he said.
Hughes said the untapped money deserves to go back to students because students are overpaying in tuition and fees.
“It would be great to see an accounting of what those promises add up to, like is there $770 million that has been promised to departments like anthropology saying ‘We will let you spend $100,000 a year to hire a professor and pay her benefits’? If you could add up all those promises and they came up to $770 million then I might stop making this argument,” he said.
Hughes said the University may claim reserve money is not available for cutting tuition or hiring new faculty because it is used for faculty to research. But Hughes said he thinks otherwise.
“The amount per faculty member is so vast. If they actually spent it on faculty research that would be about $250,000 per faculty member,” Hughes said. “We know the money isn't being spent at any great fast rate because it keeps growing.”
Students can view the University's public financial records, but Hughes said Rutgers releases much less of its financial records compared to other universities.
“The board anticipated in 2014-2015, $1.02 billion, students actually paid $1.06 billion which was a four percent variance or $41 million in surplus,” Hughes. “At the end of the day they got a $74 million surplus. So there was a $41 million surplus in tuition, leading to a total $74 million surplus, so we said ‘where is that 74 million dollars going?’”
Nick Huber is a School of Arts and Sciences senior majoring in journalism and media studies. He is a staff writer for The Daily Targum. He can be found on Twitter @njhuber95Huber.