Endowments
Posted by fredtopeka on February 4, 2008
Hmm, the NY Times has an article about the growth of endowments similar to a post of mine a few days ago:
His question captures how the wealth amassed by elite universities like Princeton through soaring endowments over the past decade has exacerbated the divide between a small group of spectacularly wealthy universities and all others. If Harvard has $34.9 billion or Yale $22.5 billion, fewer than 400 of the roughly 4,500 colleges and universities in the United States had even $100 million in endowments in the fiscal year that ended in June. Most had less than $10 million.
The result is that America’s already stratified system of higher education is becoming ever more so, and the chasm is creating all sorts of tensions as the less wealthy colleges try to compete. Even state universities are going into fund-raising overdrive and trying to increase endowments to catch up.
The wealthiest colleges can tap their endowments to give substantial financial aid to families earning $180,000 or more. They can lure star professors with high salaries and hard-to-get apartments. They are starting sophisticated new research laboratories, expanding their campuses and putting up architecturally notable buildings.
and they put in this point:
“These institutions continue to build up their kitties,” said Representative John F. Tierney, Democrat of Massachusetts. “They say it is the schools’ money. But it is not all the schools’ money. Some of it is. But when a donor gives them money, he is able to give more because he is not paying taxes. So some of what they have is federal money, every student’s money, every family’s money.”
What this means is that the government is indirectly taking money from public colleges (most states are having problems keeping up with the rate of increase of the cost) and giving them to private universities. As I said in my previous post, this means a higher percent of education money is going to the top students. The article talks about the rich universities using more money from their endowments, but this doesn’t help the typical student since they can’t get into the rich universities.
