29 February 2008
Congress recently collected a list of 136 colleges and universities who received more than $500 million dollars in endowments. The colleges were asked to disclose their financial information so Congress could review it. This is part of Congress’s plan to lower the cost of high education for students and their families.
The committee looking into endowment sizes has noted an increase in endowments, tuition, and deans’ salaries in recent years. One of the plans the committee is considering would require universities to pay 5% of their assets to a charitable organization.
As a college student who is paying for her own education, I would rather the college use 5% of their assets to increase the availability and amount of financial aid for students. I know that according to the Internal Revenue Code the government cannot require colleges to give a certain amount of money to financial aid. So why don’t they change that law?
I know colleges get other benefits and tax breaks because they are a school. If the government can give a school benefits, it should also be able to demand increased financial aid. The government intervenes in everything else so why not give the colleges a choice: get benefits and get told a minimum for the amount of aid given or do not receive benefits and have freedom to charge as much as they want for tuition.
According to a Daily Free Press article, Boston University received $1.1 BILLION dollars in 2007. BU spokesperson Colin Riley told the paper, “[BU] has a modest endowment for a school of its size. BU is a tuition dependent school. Tuition pays about half of our $1.5 billion budget.”
To me that math does not add up. A budget includes ALL expenses. If the school has a $1.5 billion dollar budget and a $1.1 billion dollar endowment, only $400 million would come from tuition. According to BU, though, $750 million comes from tuition for the budget.
That means $350 million dollars is going somewhere. Instead of using $350 million dollars of endowment money for some unnecessary fixture or putting it into savings, BU should be decreasing tuition (or increasing aid) and offering an explanation to students and parents where the money is going.
College affordability is a major problem. Harvard, Yale, Dartmouth College, and Stanford all have plans to help low income families. I think more colleges need to do this.
As a young adult and student, I am trying to get an education so I can get a decent paying job in the future. I should not be leaving school with almost $200,000 in debt (before interest) that I have to pay off. Schools need to help middle class families, not penalize people like myself for wanting to be a productive member of society.
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