From the NYTimes this morning (and if the Grey Lady has bothered to say something about a problem, you know it must be really bad).
In short: colleges — especially top-tier four-year colleges — have gotten vastly more expensive; non-loan financial aid covers a decreasing percent of costs; students from lower income brackets have seen only slight increases in college graduation rates, while upper brackets have had sky-rocketing graduation rates; and all this has happened while the value, in terms of likely income, of a college degree has also risen sharply. That is, a college degree is literally worth more, and is harder for low income students to attain.
For those of us who have been to college lately — or maybe who haven’t been able to due to costs — this is no surprise. It is particularly galling that some of the highest-ranked schools in the country are perpetuating these problems. If they cared enough, these schools could be making the biggest dent, because they have the most money. They could aggressively seek talented students from lower economic classes and fund those students’ educations. These school can afford it. Very few, though, truly step up to the plate. Harvard had a $32 billion endowment in 2011. Last year Harvard spent $160 million on scholarships, but the endowment grew by $4.4 billion; they could have spent twice as much on scholarships and hardly noticed the difference. And doubling the amount given in scholarships would mean that an entirely different demographic — one with a lower income — could attend, without even compromising on supposed quality of student, because, as shown in the above Times article, those students are out there. If Harvard wanted it to be so, they could do it. Yale, by the way, follows up with the second-largest endowment, at $19.4 billion in 2011. (Even my own alma mater, a women’s college with fewer than 3,000 students, has an endowment of over a billion dollars. I, by the way, graduated college, with about $20,000 in student loans (admittedly not all from that institution, as I spent my first three semesters elsewhere).)
Some schools — including Harvard (I’m only a very little bit sorry for being so mean to Harvard) — have “no-loan” policies. Which is nice of them. But if the average student doesn’t really need that much, relatively speaking, in financial aid — only 60% of Harvard students receive aid — it’s kind of a bullshit policy. It takes a pretty high family income to not receive any financial aid at all, well above the U.S. median family income. The median household income, by the way, is currently about the same as, if not less than, the cost of some of these schools. This is an historic novelty — in 1970, Harvard cost less than half the median household income.
Blah blah blah, investments, blah blah blah, earning interest, blah. Non-profit colleges (for-profit colleges are another beast, and oh boy, don’t get me started) such as those we are talking about here spend very little of their endowments. There are some complications, such as when donors allocate the funds they give to a specific area, be it scholarships or a building or library books or what-have-you, but the amount spent hovers around 5%, while growth is around 10%. Excess is reinvested.
It’s this reinvestment that’s the problem. For an institution like Harvard, which has such a huge endowment, so far ahead of even the second largest university endowment (reminds me of the US’s military expenditures), what is the purpose of reinvesting and focusing so heavily on growing that already massive fund? At my own undergraduate institution, when the endowment broke $1 billion, friends and I wondered what it was for, when so many institutions were perfectly functional on much less. Why were we taking out student loans to fund our education, when our beloved college had so much money?
Let me wrap this up, and bring it back to the Occupation. One of the things we do at the Occupation is to imagine ways in which the current structures, which are not working for so many people, could be recreated to serve us all better. One of those structures is higher education. There’s no reason why college and university endowments have to function the way they do. They could spend more and reinvest less, and even still grow while doing it. Top colleges and universities could recruit outstanding students from lower socio-economic classes, and so facilitate economic justice. Fund managers, college presidents, boards of trustees, and other individuals and groups are empowered to think outside the box and make these choices. That so few have yet to do so means only one thing: that they don’t want to. As I always say, yes, this is class warfare, but we here at the Occupation sure didn’t start it.