Why is the annual stipend increase below the annual inflation rate?
Date: March 2022
I recently received Dean Boor’s message regarding the annual increase in the graduate stipends. Immediately after reading the email I found myself wondering why the annual increase (5%) is below the annual inflation rate (7.5%), since effectively our stipends will have decreased compared to the inflating prices in almost everything (not to mention that the inflation rate will probably be higher next year given the current circumstances). The message only emphasizes that the annual increase rate has increased from 2% to 5% without regard to the current economic situation, which left me wondering whether this detail is intended to mask the above fact I mentioned.
During a time when fellow Ivy schools (such as Princeton) felt tempted to increase graduate stipends by 25%, I simply cannot understand the logic behind Cornell’s annual increase rate.
A graduate student who tries to make ends meet
Dear “A graduate student who tries to make ends meet,”
There have been a number of “Ask a Dean” questions on this topic following the announcement of Cornell’s 2022-23 stipend rate last week in the context of federal data that shows inflation continuing to rise. There is no question that costs of many local goods and services are increasing, and economists can’t truly predict how long this trend may continue.
We’ve all experienced sticker-shock at the grocery store, when we pay our utility bills, and at the gas pump. It is not unusual for rents to increase annually, but the early reports I’ve heard from students suggest that 2022-23 increases are sometimes much higher than expected. Over the past several months I’ve discussed the impacts of these pressures with many of the senior leaders of the university and, without fail, each has immediately understood the need to increase stipends to the greatest extent possible.
I can offer some further context on why stipend increases are so complex. Although graduate student funding comes from many different sources, Cornell sets a single minimum stipend rate to promote equity across all research degree programs and sources (assistantships and fellowships). To illustrate some of the complicating issues that arise from the stipend-setting process, nearly all GRA and RA funding is provided to students directly from grants that faculty have won to conduct research. The budgets for these grants are fixed at the time the grant is received, typically years in advance, so the grants usually cannot absorb unanticipated large increases in cost. No revenue stream exists at the university with the purpose of complementing faculty grant funds, so unexpected expenses must be covered by discretionary resources, which are typically limited in nature. Other students are funded on external fellowships that have stipend rates that are fixed by the funding agency.
You mention the 25% stipend increase announced by Princeton. It’s important to note that, in contrast to Cornell’s commitment to a single stipend rate, Princeton’s stipend levels have varied significantly by college and sources. It appears Princeton’s increases were not solely designed to counter inflation, but were instead adjusting base rates to be competitive. Importantly, Princeton is fortunate to be ranked #1 in terms of per-student endowment, so has vast resources that Cornell cannot match. Our rank is #68 in endowment per capita, despite our strong investment returns last year. Much of Cornell’s endowment is restricted by individual donor’s wishes to support very specific functions. For example, gifts may be targeted specifically, and solely, to endow a professor’s position, fund the botanic gardens, maintain a building, or sponsor a doctoral fellowship and so on. Endowment earnings generally are not discretionary resources that can be repurposed, even when the market is strong.
When a percentage increase for graduate student stipends (and also for faculty and staff wage increases) is established, it is done within the context of setting the budget for the entire university. By far the largest expense within that budget is wages, salaries, and stipends. Since the largest portion of university revenue comes from tuition income, the challenge Cornell faces every year is balancing our commitment to fair compensation with a similar commitment to responsible fiscal management and restraint on tuition growth.
I am committed to working toward strengthening financial support for graduate and professional students to the greatest extent possible. I appreciate hearing from you.
Kathryn J. Boor
Dean of the Graduate School and Vice Provost for Graduate Education