Wealthy colleges questioned about costs

[flashl]

Wealthy colleges

Colleges and universities raked in money by the billions last year. But their investing success now has a price -- a movement in Congress to force the wealthiest schools to spend more of their money to keep down tuition.

In recent weeks, a string of colleges and universities have announced enviable investment results. Leading the way was Yale, which earned 28 percent over the year ending June 30, increasing the school's endowment to $22.5 billion overall.

Harvard, the world's wealthiest university with $34.9 billion, beat the market again with a 23 percent return. There also were good returns for smaller schools such as Bowdoin (24.4 percent) and William & Mary (19.2 percent).

But while those numbers were coming out, some members of the Senate Finance Committee in Washington were wondering aloud why the rise in endowments isn't stemming tuition increases. At a hearing last month, lawmakers batted around the idea of forcing at least some of the wealthier colleges to spend more savings on reducing costs.
Read More ...

[whoneedstickets]

1. The extra money will help them pursue research even when a RW congres.s...

...threatens to pull federal funds. I'm all for the decoupling of higher-ed from the meddling of the fundies.

[flashl]

2. Dont universities sell R&D results to foreign govts?

[whoneedstickets]

3. What? You got something against higher ed?

Universities share patents with researchers and often establish new enterprises in the US to market them. Our university system is the single best feature of American society. Its one of the few areas in the world where the US is still truly #1. Knowledge based growth holds the promise of cleaner, greener and more efficient world. If you haven't figured that out, you need some education.

You'd be better off asking, who is it that is trying to undermine these institutions? What is their motivation?

On edit, from the article...

"Private foundations are required by law to spend at least 5 percent of their endowments each year on their missions, but public charities -- a category that includes colleges -- face no such requirement. Holding colleges to the same standard is an idea that clearly interests Iowa Republican Sen. Charles Grassley, the minority leader of the Senate Finance Committee and Capitol Hill's closest scrutinizer of non-profits."

Grassley! There it is Right-Wing anti-intellectual nutjobs wanting to undercut the main source of critical thinking in America. I wonder if you really want to carry their water.

[flashl]

4. Identify a few new enterprises recently created

[whoneedstickets]

8. Ok, I'll do your research for you...

..apparently you are unequipped to conduct it yourself.

BTW just google: <school name> patent company , for any school you like.

Here is one from Harvard:
http://www.xconomy.com/2007/07/16/startup-profile-harvard-patents-in-hand-nano-terra-is-driving-industrial-applications-of-nanotech/

As for the other morons on this thread who think "rich private universities" don't need federal funds, who would you rather have doing medical research a team a Harvard or Glaxo? Who do you think will do basic research on low profit (a.k.a rare) diseases? Lilly corp? How about cutting edge experimental physics?
Or would you rather have all US R&D money in defense?


BTW Harvard has need blind admissions policies that advance lower income and minority students more than any public policy program I know of. Full tuition is RARELY paid and usually only by the wealthiest students who THEREBY subsidize the poorer ones (yes, colleges practice progressive pricing).

The sheer ignorance displayed on this board is amazing some times. "Ohh, rich institution, that's bad...".

[flashl]

11. I am of aware of Yale and other univs using their endownments to invest in prisons n/t

[whoneedstickets]

12. Where do you get this crap?

Most Universities and Colleges have investment review committees usually comprised of Trustees, Faculty, Alumni and sometimes current students. Many schools have rules against investing in enterprises that don't fit with the ethical positions of the campus community. Disinvestment in defense industries and tobacco were two good examples of this.

What is it with you an higher ed that you want to advance all this crap. Consider the major institutions in our society Govt, church, corporations, press, military, higher ed. how many of these have a RW versus a progressive orientation? Higher ed is among the last bastions of progressivism in the USA. You need to explain why you're making it a target? What is your agenda?

[flashl]

13. Farallon Dumps Corrections Corporation of America

The national "Dump Farallon" campaign

National - Following a year-long campaign by students, graduate teachers, faculty, and community members, Farallon Capital Management, LLC has fully divested from Corrections Corporation of America (NYSE:CXW), the controversial for-profit prison company.

Farallon, a hedge fund that manages many college and university endowment investments, has sold its remaining shares in CCA, a company cited for abuse of prisoners. A year ago, Farallon held almost $90 million in CCA stock, making it one of CCA's largest investors.

[whoneedstickets]

15. Great! So you've shown just what I said, colleges monitor investments

Well done, got any more bullshit to throw at higher ed?

[flashl]

17. Following a YEAR-LONG campaign

by students, graduate teachers, faculty, and community members.

[whoneedstickets]

18. Oh, so if its not instant results the system doesn't work?

What are you a three year old? Every time you pull a tantrum you expect momma to kiss it better? Hate to break it to you, we don't live in a perfect world. Yes institutions make mistakes. GOOD institutions have systems to respond to feedback and fix them. Gratification will not always be instant.

You're totally off your rocker to go after what are the most responsive and progressive and productive institutions in our society. In targeting higher ed, and parroting this total BS you join idiots like David Horowitz who would like to see nothing more than Universities subordinate to the dominant conservative forces in society by removing free-speech, intellectual freedom and academic independence. THAT is what all that $ is buying, FREEDOM! Tell me why you're an enemy of freedom?

Ah, American anti-intellectualism. Sadly we're not free of it on the left either.

[flashl]

20. Farallon Captial Managment overview

5% tuition increase imminent

Board of Trustees approves $1,800 spike; grad schools also affected in rising trend

Citing rising costs and expanded financial aid for middle-income families, the University’s Board of Trustees approved a 5.46 percent increase in tuition and a 4.25 percent increase in room and board expenses at its two day meeting, which ended yesterday.

== snip ==

The increase continues a decades-long trend of rising costs. The increase brings undergraduate tuition to $34,795 per year.

The Board also increased the tuition rates for medical school students by 4.5 percent, for law school students by 5.5 percent and for first-year business school students by 5.9 percent.

John Scully, a vice chair of the Board, estimated that costs would rise by about four percent and said that the additional 1.5 percent of the tuition increase would enable a $5 million contribution to financial aid.

Last year, the Board raised tuition by 5.75 percent; tuition increased by 4.5 for the 2004-2005 academic year. Tuition in 2005 was 12 times tuition in 1970, five times tuition in 1980 and twice as much as tuition in 1990. When the Stanfords opened their University, tuition was free.

== snip ==

New trustees

The Board, according to Scully, also “elected two gentlemen at the very top of the world of finance” — James Coulter MBA ‘86, a founding partner of Texas Pacific Group (TPG), and Thomas Steyer MBA ‘83, the senior managing member of Farallon Capital Management, L.L.C

[whoneedstickets]

23. Look, I'm getting tired of explaining how Colleges work to you...

"Citing rising costs and expanded financial aid for middle-income families"

Means: 'we plan to redistribute this income from rich to poor students'

Med, law and B-schools are professional degrees, their applicants understand the degree is a direct investment in their earing power and SHOULD pay more. ALL three are still a bargain compared to future earnings potential (which explains the highly competitive admission process).


Non-professional grad programs (in, say the liberal arts) usually provide funding for students. Few pay tuition, most are college employees, research assistants and TAs (albeit poorly paid).


Boards of Trustees usually recruit wealthy members because they are EXPECTED to become donors to the general fund and financial campaigns.

[flashl]

26. Got it!

First it was “crap” after pointing out that there were relationships between Universities, their endowments, hedge funds, and prisons. Then, it was “bullshit” after pointing to Farallon Capital Management. Next, it “anti-intellectualism” when it took a year of protests to get the Board of Trustees affiliated with the hedge fund company to divest from the unethical prison stock.

[whoneedstickets]

28. Yep, I guess you're not as dense as you first appear.

crap, bullshit, anti-intellectualism....

That about sums it up...


It would have been nice if, along the way you would have answered a few of my questions about your motives but I'm glad to have called you out on it.

[terisan]

5. Rich private colleges don't need taxpayer money any more than other rich corporations.

If they are doing reseach on taxpayer money , maybe they should be sharing patents with us.

They have enough money to do all the critical thinking they want and issue all the scholarships they want without interference from the federal goverment. Taking the federal dollars has make them dependent on politicians and right wingers.

[flashl]

6. Thats what I am thinking.

[Trillo]

7. It's been a long time since the days of Benjamin Franklin.

Rich guy wanted to make sure some others had the same opportunities he did (if I recall correctly from reading his will).

[Trillo]

27. Perhaps, if he were alive today,

he'd rethink the interest and usury characteristics, having seen the endgame of the great beast of debt that swallowed all liberty and pursuit of happiness for all but the fewest of the few.

He'd see endowments whose primary objective is making more money, and owning more shares to control higher and higher profits ... why does that feel like a liberty suffocating squeeze.

[Igel]

9. Investment income from endowments increases and decreases.

The money that many universities receive and use from their endowments stays fairly steady from year to year; in some cases they pull out a chunk for a new building or some larger project.

If you insist that in good years the endowment provide good amounts to the general budget, then in bad years the endowment is going to yield poor sums to the general budget. When you have this kind of thing happening, you wind up having to have sudden and large increases to tuition/fees or you wind up having to suddenly cut expenditures.

UCLA in the early '90s was on precisely such a rollercoaster, except that it wasn't endowment funds, it was state funds. The state budget had increased hand over fist from the mid '80s until '91 or so, and the UC (and UCLA) budgets had increased proportionately. Building was up, salaries were up, aid was up. Then the state had a budget crunch, and the budget was gutted.

There was a very large fee increase (in terms of percent ... from very low to a few thousand $ a year). UCLA's ever wise chancellor (just a bit of hyperbole ... he wasn't bad) decided to take out a loan against its endowment and "buy out" the increased fee for year 1 of the fee increase, assuming that the good times would roll in short order and the fee increases would be rolled back. In year 2 we had the same fee increase *and* had to pay back the loan. It wreaked havoc with financial aid calculations, with educational investment funds, with student loans.

Stability is good; smaller fee increases in previous years would have made the jarring increases in '92 and '93 much less important, possibly avoidable. I think the fees are raising too high, faster than inflation (but who wants to tell faculty with a job offer elsewhere that they can pack up and go?). But deciding to straitjacket the universities ... bad policy even if it's alluring politics.

[terisan]

10. Have you analysed the administration overload in in # staff and cost of administration.

This is supposed to be one of the sources of huge increases over past 2 decades.

[Romulox]

14. But who will train the Chinese leaders of tomorrow?

Our universities, public and private, are mere money-getting enterprises.

[Akoto]

16. I am 22, and was recently looking at tuition for myself ...

I first looked at a private university. $25,000 for an associate's degree. This was generally the trend.

I looked at my local community college and found that I could get the same degree for under $5,000 dollars. The difference was really shocking.

[whoneedstickets]

19. You get what you pay for...

There are some really committed CC instructors, but generally the quality of faculty (and that's the real difference maker along with class size) is better at the higher tuition schools. State schools often have some fantastic faculty members, but you're more likely to be taught by their grad students than the top dog.

[Romulox]

21. I doubt the numbers back that up

In the first place, the poster was talking about community colleges vs. 4 year institutions, not private schools vs. public schools. Outside of the ivy league, I've seen no evidence whatever that higher tuition = better outcomes.

And the vast majority of us go to state schools.

[whoneedstickets]

25. Which numbers?

If you look at data on admissions to law, med and grad programs, more selective, higher tuition schools always out-place lower cost programs proportionately. They typically do so on measures of future earnings. Of course the issue is that the elite schools attract better students to begin with so what 'added value' is gained from attending these institutions can be hard to determine.

[Johonny]

22. err

At most major private University's you get stuck with graduate students too. In general only small private school without graduate programs do you generally get good 1 on 1 contact and small class sizes.

[Selatius]

24. I went to community college to get rid of the core entry-level classes

I don't need to know chemistry to go into business management, but they're included in "core" classes, so for economic reasons I went to community college for my first two years, on scholarship. It saved me roughly 10,000 in extra student debt when I transferred to work on my Bachelors at university.

Of course, the community college I went to was state-run, and the university I transferred to was also state-run. I didn't bother with private universities simply because of cost.