By Betty Smart ’26

Graphics Editor

The recent strike of Mount Holyoke College’s workers made me very curious about exactly how the College’s budget works. While the College’s annual financial statements are available for public viewing on the MHC website, for most students their only real exposure to the budget comes from experiencing increases in tuition. I sat down with the College’s Vice President for Finance and Administration and Treasurer, Carl Ries, to break down the budget.

Something important to know off the bat is that there are actually two budgets. One is the operating budget that directly deals with the ins and outs of the college, including but not limited to wages, benefits, supplies, and maintenance. The other is the capital budget, which is used for bigger infrastructure projects.

Where does the college get its money?

Ries explained to me that the College’s operating budget encapsulates “everything… from food to utilities to paying our employees … Our annual budget is … somewhere in the $165 to $180 million range, depending on how you interpret it. That is what it takes every year to run the college. We don't borrow money to run the college, we have to balance the budget.”

“Tuition, housing, and food is the majority of our revenue; so, let's just call it $100 million out of $165 or $170 million. The other $65 million, we have to find sources for that every year. The next biggest support is our endowment,” Ries said.

Mount Holyoke College’s endowment is a collection of individual funds that regularly invest in the markets, with each fund having their own restrictions on what they can be spent on.

“The endowment is basically protected forever … we really can’t touch that money because it’s permanently restricted, the majority of it. There’s some unrestricted, but this is how endowments work. The vast majority are protected … in perpetuity. So you can only take the earnings every year,” Ries continued. “Every year, the endowment does well in the markets… They'll spin off a little bit of money every year. And that money… we're allowed to spend. So we call it basically 5%... of the endowment value we can use every year to support the college… it’s about $50 million a year.”

“So you have 100 million in tuition, housing and food. You've got $50 million in endowment support, leaving [you] somewhere between another $15 and $20 million that we've got to find every year. So fundraising is about $10 million for what we call the annual fund. And again, this is money that just gets used to support the operating budget,” he explained.

“So that leaves like another … five to 10 [million] left.” Ries went on to describe other forms of revenue that make up this last amount, which included people paying to eat in the dining commons, the hotel, and summer conferences. All of these are categorized as auxiliary income, Ries finished.

What does the college spend its money on?

According to Ries, “Personnel, staffing, faculty, wages and benefits. So everything for … faculty, student labor, workers in the dining commons, facilities and maintenance.”

“Next… when we think about categories of expenses, you can start to think about things like utilities … gas, electricity, water, those kinds of things tend to be pretty pricey when it comes to the budget,” Ries said. “And then the other big piece is really the cost of all of our systems. So Workday, Colleague, all of the IT support and function services, that's a huge and increasing amount of our budget annually.”

He continued, “There are other things…just to shed light on sort of why we raise tuition. Utilities is part of it, but in the dining hall, those ingredients… are increasing exponentially right now. We saw a 20% increase recently in getting local meat, which [when] you think about like how much meat we actually use, can be significant… If an orange goes up 20%, [it’s] maybe not a big deal. But if all my groceries go up 20%, that makes a big difference. So, we do have to kind of constantly be aware of how that impacts our food and housing costs.”

Another operating expense is depreciation of the various buildings and projects on campus that are paid off a little at a time.

Does the end of the strike mean any big changes are coming?

Ries explained, “We generally expect expenses to go up between, you know, 2% and 4% a year based on inflation and increased wages. That's going to be the case even with the union deal… I think it's a great outcome for our employees. They're seeing significant wage increases in the first year, and then those wage increases slow in the second and third years of the contract. But I'd say that the outcome of the union deal is very much in line with what we expected from a budget impact, so there's not a huge impact.”

How will the college keep giving financial aid if tuition goes up again?

“First of all, Mount Holyoke is committed to making sure that we meet a student's financial need. So Student Financial Services works with every student based on their expected family contribution within the parameters of what they can afford and offers a package … Even when tuition increases happen, the amount that the student pays might increase, but it won't increase 100% of what tuition goes up because some portion of their whole education, if they have financial aid, is being covered by the college,” Ries said.

He gave an example: “Tuition went up 10% three years ago … And students who were basically getting a full ride, they didn't see any change … because they had 100% need. Students who had like a 50% need, they might have seen a small increase because part of their tuition was already being paid for by the College and part was being paid for by the family. So they didn't see an entire increase of 10%. They maybe saw 5% for some of those students. We try not to raise tuition as much as is possible, but we do need to raise for inflation.”

“...Over time, the College has offered significant financial aid to the point where a majority of our students are getting some financial aid… So part of what we have to do is…balance as much as we can trying to get a slightly higher average tuition per student because we have students that have more ability to pay full tuition on average. And so we try to balance the financial aid to provide as much access as possible, but knowing that we still rely on some full and fuller pay students,” he concluded.

Karishma Ramkarran ’27 contributed fact checking.