CASTINE, Maine — Students at Maine Maritime Academy could see higher tuition bills next year, but also will benefit from an increase in scholarship funding from the college.
The college’s board of trustees last week authorized a tuition hike of not more than 5 percent for Maine students in order to maintain a balanced budget.
Richard Ericson, the college’s vice president for finance, administration and governmental affairs, said the hope was to keep any tuition increase to a minimum. That will depend on the final budget for the coming year which will be affected not only by built-in increases, such as salary increases and inflation, but also by antici-pated cuts in state subsidy.
The state budget proposed by Gov. John Baldacci includes a 3 percent decrease in funding for higher education. According to Ericson, that will amount to about a $267,000 reduction in funding. State funding has been almost flat for the past several years, and the decrease will not have a major impact on next year’s budget.
“State funding accounts for about one-third of our total budget,” he said. “So a 3 percent reduction in funding translates into just 1 percent of the total budget.”
According to Ericson, the Legislature’s Education Committee initially balked at the overall 3 percent cut to higher education, but it had not yet made a final recommendation.
The current MMA budget is about $27 million. Based on initial figures, Ericson said, the budget next year will increase by about $1.1 million. He said the college will end this year with a balanced budget and that the college would present a balanced budget to the board in May for the coming year.
“We’ll look at the budget and determine how much we need from tuition,” he said. “Our goal is to keep it below 5 percent if possible. That may mean deferring some maintenance projects or looking at other economies. A lot can happen between now and May.”
In-state tuition at MMA is now $7,900. A 5 percent tuition increase would boost that by about $400, Ericson said. Tuition for out-of-state students is now $15,600. The full 5 percent increase would hike that by about $800.
To assist students, the board last week also approved an allocation of more than half a million dollars from the college’s endowment fund for scholarships. The allocation of $536,582 for scholarships is an increase of $40,000 from last year and is the highest amount the board has ever earmarked for scholarships. The amount rep-resents 5 percent of the fund’s five-year average balance.
Although the invested endowment fund was hit hard by the nationwide economic downturn and the board had to draw on unrestricted endowments to keep scholarship amounts level, the fund has bounced back since MMA transferred it to be invested with the University of Maine System endowment funds.
Being part of the University of Maine System fund has resulted in cost savings and a more diversified approach to investing with a larger group of specialized investment managers working on the college’s portfolio, according to trustee William C. Bullock Jr., who chairs the finance committee.
The “proof in the pudding,” Bullock said, has been that in the past year, the college’s endowment fund — which had shrunk to a low of around $12 million — has rebounded and grown to just under about $15.5 million.
Donations to the college also have been coming in at a good pace, according to Eleanor Courtemanche, MMA’s vice president for advancement, and the college has received about $99,000 in new endowments this academic year.
Many donors, aware of the financial pressures on students because of the economic downturn, are making gifts for scholarships to be used for scholarships during the coming year. Trustee Robert Somerville, president and chief operating officer of the American Bureau of Shipping, who joined Friday’s board meeting by tele-phone, announced that the ABS board had voted to increase its donation to the college by $100,000 for scholarships in 2010.
Meanwhile, interest in the college continued to be strong this year, according to trustee Robert Peacock, who reported that MMA has received 834 applications so far, a record for this time of year. Among those applications were 128 women seeking admission to the college, also a record number. The application rate is high enough that the college may need to cut off applications early as it did last year. In 2009, MMA stopped accepting applications in April.
In recent years MMA’s entering classes have numbered around 250 students. Undergraduate enrollment this year is around 850.