Purdue University President Mitch Daniels on Monday eliminated merit raises for administrators earning more than $50,000 annually over the next two years in the first in a series of cost-cutting moves to cover the estimated $40 million cost of freezing tuition rates through 2015.
Purdue posted a letter from Daniels on his web page Monday saying the move will apply to senior administrators, deans and administrative and professional staff. It will save the university $5 million over the next two years, he said.
"It has been too easy in higher education for institutions to decide first what they would like to spend, and then raise student bills to produce the desired funds. That approach has run its course," Daniels wrote in the letter. "At Purdue, we will make our first goal affordability, accommodating our spending to students' budgets and not the other way around."
The merit raise elimination doesn't apply to faculty or clerical and service staff, Purdue said.
Other cost-cutting moves will be announced in the coming weeks and will address expenses and practices across all central university units, Daniels said. Every academic, administrative and auxiliary unit of the campus will be asked to closely examine all activities and their costs.
The cost of the tuition freeze represents 1 percent to 2 percent of the university's base budget over the biennium, Daniels said, and Purdue should be able to cut more than that.
"I believe we should set our sights higher and work to create savings above the $40 million that can be used to augment our inadequate funds for scholarships and/or to extend the tuition freeze further," he wrote in his letter.
Daniels announced March 1 that it would freeze the cost of tuition at its main campus in West Lafayette over the next two years because of the lingering weak economy. The cost of basic in-state tuition there will remain about $10,000 a year until the end of the 2014-15 school year.
The last year without a tuition increase on the main campus was 1976.
Daniels became Purdue's president in January after completing two terms as Indiana's governor.