Rich, Stingy Colleges

Call them the top 4 percent: elite private colleges and universities that together sit atop three-quarters of the higher education terrain’s endowment wealth.

.. Among that group of 138 of the nation’s wealthiest colleges and universities, four in five charge poor students so much that they’d need to surrender 60 percent or more of their household incomes just to attend, even after financial aid is considered.

.. Unlike other nonprofit organizations, colleges and universities aren’t obligated to spend at least 5 percent of their endowments on mission-related expenses.

.. A Congressional Research Service report from last December estimated that if returns from private college endowments were taxed at 35 percent, the government would collect $11 billion in revenue, based on 2014 figures—money that could be spent helping low-income students.

 .. Amherst College reported that if it spent 8 percent of its endowment annually rather than 5 percent, it would lose 60 percent of its wealth in 25 years. But the Education Trust report’s authors said a little bit of extra spending can go a long way. In the 67 schools they reviewed, just increasing the endowment-spending rate from around 4.5 percent to 5 percent could free up resources to cover the tuition for nearly 2,400 new students, the report found.

Cognitive Dissonance: Confessions of a Community College Dean

That said, it was hard to have serious discussions of equity and achievement gaps on a campus of a university with a twenty-two billion dollar endowment.

.. Gladwell makes the case that the same size donation would make a much larger social difference at a Rowan than at a Stanford. Having seen both, I have to agree. Wealthy institutions are not immune to the law of diminishing returns.

.. During a long lecture about how they don’t lecture, I started playing a variation on “Where’s Waldo?,” scanning the polaroids for faces of black people. As we passed one of the many glass-walled workspaces, an intense young woman came out to tell us “we’d prefer if you didn’t come in.” I thought her comment a bit on-the-nose, but there it was.

.. For the rest of the week, I kept hearing comments like “can you imagine what we could do with just one percent of that endowment?”

.. Borrowing a bit from Gladwell, if we assume a five percent return on a 22 billion dollar endowment, that’s a little over a billion dollars per year. That’s before adding the first dollar of tuition income, any new research support, or new donations. (The guide bragged about their generous financial aid, which sounded impressive until I did the math. Undergrad tuition, fees, room, and board is 68k per year. He mentioned that the typical aid recipient gets about 30k of “scholarship” from Stanford. By my math, that means the typical aid recipient is on the hook for another $38,000 per year.

.. A full-time student at Brookdale would spend about $5,000 per year on tuition and fees, and even at that level, about 40 percent of our students get Pell grants.)

.. we could go to “free community college” for every student at Brookdale for less than a twentieth of Stanford’s annual rentier income.

.. Alternately, its annual rentier income — remember, this is one university — would cover free community college for the entire state of New Jersey, with money left over.

.. “The fact is, higher education in the U.S. is no longer a way to improve one’s life, but a caste system that aids and abets the widening inequality gaps in every aspect of life.”

.. The point, really, is summed up in this sentence from the column: “A donation to a school that runs lean will make a much larger difference than a donation to a place like Stanford.”

.. In academe, where race and ethnicity define and represent diversity, Stanford can simply point to the African-American daughter of an attorney and investment banker and be lauded for its “diversity.”

Socioeconomic class has been enveloped and made largely irrelevant while race, gender, and identity have become the totality of what’s believed to be “diversity” on campus.

 

 

The continuing myth of free college

The primary problem is that tuition costs at public colleges are mostly controlled by the states and are a direct result of how much money lawmakers dedicate to higher education. Any free tuition plan requires states to pitch in, and we know how well that has worked with Obamacare.

.. Average public college tuition varies by more than 3 to 1 among the states, according to Carey, from less than $5,000 in Wyoming to more than $15,000 in New Hampshire. The range of public investment is even larger, from $2,591 per student in New Hampshire to $14,412 in Alaska.

.. In 1987, U.S. Secretary of Education William J. Bennett suggested that increases in federal financial aid enabled colleges and universities to raise their prices.

.. As Andrew Kelly of the American Enterprise Institute has written, capping tuition at zero “limits college spending to whatever the public is willing to invest. But it does not change the cost of college.”

.. public institutions that have been limited by their state legislatures in raising tuition have turned to charging “fees” to students in an effort to raise money. Student fees that cover everything from athletics to technology are hidden tuition increases that won’t be covered by any free tuition plan.