Purdue administrators are making wiser investments in an effort to afford a tuition freeze. The university announced $5 million will be earned by improved cash management policies.
Executive 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 1-2% 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.”
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’s 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 aren’t in use.
Daniels says he continues to hear concerns about a pay freeze for administrative and professional staff earning more than $50,000 a year.
“I do think it was perfectly fair to ask the best paid people here to forego a raise, while protecting those at low and more modest rates of pay,” he says. “$50,000 may not be the right number, but it is dramatically above the Indiana average or the average in the region that Purdue lives in.”
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. Including all faculty in the pay freeze would save the university up to $10 million.
Professor Paul Robinson, who chairs the University Senate, says even though they’re excluded, colleagues have approached him about voluntarily foregoing a raise.
“They want to know how their salary contribution can be sure to go into the Affordability Fund,” he says. “I think that’s what we’re waiting on, to see how faculty members can contribute, and then we’ll see how the faculty responds.”