Too Well Endowed

...To some extent they are...

...If you’re one of your alma mater’s more financially successful alumni, you may even have received a personal visit from the school’s development (i.e., fund-raising) office, asking you to donate $500,000 or $1 million to help finance a new Russian studies department or renovate the freshman dorms...

...Since the OS, Princeton’s acceptance rate has gone from 17 percent to 13 percent...

...In other words, undergrads and their parents are subsidizing the programs that divert university attention and resources away from said undergrads...

...Taken all together, these stories paint a disquieting picture of what’s happening in the realm of higher education: Our top schools are richer than ever, but tuition costs continue to rise at more than twice the rate of inflation...

...See sidebar...

...Some of their instuctors are likely to be badly trained or even untrained teaching assistants who are groping their way toward a teaching technique...

...The Carnegie report that top universities are shortchanging undergraduates is unlikely to diminish the prestige of these schools, nor the mad scramble to attend them...

...does this generation of Elis or Princetonians deserve any less of a quality education than previous ones...

...Although the principal remains in a rainy-day fund that: can’t be spent under normal circumstances, the money earned by investing the fund can go toward a variety of projects, from capital improvements to student aid...

...Unlike private nonprofit foundations, which are required to spend at least 5 percent of their assets each year, colleges and universities are under no such obligation...

...But it’s not going to last forever...

...X? My name is Mr...

...Without pressure to maintain teaching standards, universities, as the Carnegie report notes, shift their attention and resources to research, which nets them federal grant money and increases their prestige within academic circles, but does little to educate undergraduates...

...We’re not talking about Podunk U. here...

...Research assistance provided by Seth Grossman...

...Parents fight to get their tots into “the right” preschool in preparation for Harvard or Princeton...

...18 press release on the results of the National Association of University and College Business Officers’ annual survey of school endowments: “Golden Era in University and College Endowments,” the organization trumpeted...

...BY MICHELLE COTTLE OFTEN, IT IS THE CONFLUENCE OF several news events that brings the real story into focus...

...Brown to raise student costs to $31,060...

...This is where endowments come in handy...

...If you went to college, chances are at some point since graduating you’ve gotten one of those phone calls: “Hello, Ms...

...But students planning to pursue professional degrees already face comprehensive tests such as the LSAT (law school), MCAT (med school), GMAT (business school), and GFE...

...Of course, getting schools’ attention will probably require hitting them where it hurts: their wallets...

...Y I’m calling on behalf of University 2’s reunions [i.e., fund-raising] campaign to see if you’d be willing to pledge a gift of $50 or more to help your class reach its stated goal of $1 million...

...Any school that failed to provide students with a basic mastery of the field in which they majored would be ineligible for federal grant money of any sort...

...When asked about increasing that percentage, university officals insist that such a move would be unwise because, even though times are high today, the school must be prepared for when the economy turns sour...

...It’s amazing how attentive adminstrators can be when money is on the line...

...This seems in part to be a by-product of the awe with which we regard academia...

...If visible improvements don’t start to materialize, and donations start to dry up, universities will listen...

...A handful of universities, most notably Stanford and Columbia, also pledged to stop the widespread practice of reducing school-awarded aid to students who win scholarships from other sources...

...There is already some indication that public pressure does work...

...A February report by the GAO found that, between the 1992-93 and 1995-96 academic years, the number of graduating seniors who had borrowed money during college jumped from 42 percent to 60 percent for those attending public institutions and from 50 to 58 percent for private ones...

...During the 1970s, it increased by $811 million...

...Likewise, one might wonder if universities shouldn’t focus more on avoiding another tuition hike or improving faculty-to-student ratios rather than on whether their endowments will earn $1.2 billion or $1.3 billion this year...

...In and of themselves, the survey findings are noteworthy but likely to dissolve quickly into the pool of articles about how market madness is changing America...

...Needless to say, those figures have since risen considerably-even with the recent dip in the Dow...

...The commissioncomprising university officials, as well as members of the Carnegie Foundation for the Advancement of Teaching and the American Council on Education - charges:[university] recruitment materials display proud - ly the world-famous professors, the splendid facilities, and the ground-brealung research that goes on within them, but thousands of students graduate without ever seeing the world-famous professors or tasting genuine research...

...It’s time to insist that our top universities start living up to their reputations-and their pricetags...

...But pushy parents aren’t the only ones driving this phenomenon...

...Even with the explosion in tuition over the past 15 years, it still costs most colleges more to educate a student than the schools collect in tuition and fees...

...Harvard did, not...

...Perhaps, to help get the focus back on teaching, we should implement exit tests for graduating college seniors...

...Last fiscal year, for instance, universities averaged just over a 20 percent return on their endowments...

...Harvard’s endowment alone grew by more than $2.1 billion...

...Now without question, supporting higher education is a worthy cause...

...The explosion in endowment values, then, opens up some exciting opportunities for schools looking to improve both access and quality...

...Clearly, something must be done to remind universities that their primary goal should be to provide students with the best education possible-not to give professors the most free time to pursue research and certainly not to see who can beg, scrimp, and invest their way to the first trillion-dollar endowment...

...Without additional aid, most schools would either be forced to raise tuition even higher or find ways to cut costs, perhaps at the expense of academic programs...

...cost per year in fall tops $31,000...

...Now add to this mix a series of recent headlines from various papers: “Harvard will raise tuition 3.5...

...Such misplaced priorities do a disservice to our society, and particularly our students...

...The Ivy League has done particularly well: As of mid-1997, Princeton’s endowment had swelled to $5 billion...

...Granted, few graduates of top universities are facing starvation...

...As for improving program quality, the university could set aside another 10 percent-or 20 percent or the remaining 90 percent for that matter-for hiring additional faculty, upgrading technology, landscaping Harvard Yard, and so on...

...Besides, in the event that the stock market should tank, schools would lose the bulk of their nest-eggs anyway, without having invested in any worthwhile projects...

...Top schools can ask students to pay $20,000, $25,000, $30,000 a year, yet rest assured that people will still line up for miles to apply...

...No bull market runs forever (something the recent drop in the market reminded investors), and despite the huge gains of recent years, the endowments at many schools still do not provide much of a financial cushion...

...As for outside pressure to reform, while elementary and secondary schools are constantly scrutinized and their students tested for mastery of certain information, institutions of higher learning face no such regular reviews...

...The story becomes more interesting, however, when viewed in conjunction with an April report from the Carnegie Foundation showing that America’s top universities “have too often failed, and continue to fail, their undergraduate populations...

...With universities, there is no particular reason to believe that there will be a better use in the future and every reason to believe the reverse is true...

...Before whipping out their checkbooks to donate another $500 or $500,000, alumni might want to register their concerns with the administration...

...And, in stark contrast to the old “you get what you pay for” adage, the quality of undergraduate education is in decline...

...For public universities in particular, reductions in state support since the late ’70s have resulted in serious headaches...

...Clearly, there has been a breakdown in the system-a breakdown caused not by financial troubles, but by the misplaced priorities of universities, students, alumni, and society in general...

...In fact, determining if a soon-to-be-graduate knows how to “think logically”something the Carnegie report suggests is too often not the case-is a primary aim of the LSAT A similar exam could be designed and administered to students entering college, and again just prior to graduation to measure their progress...

...Yale had $5.7 billion, while Harvard led the pack with $11 billion...

...Students are judged primarily by the school name on their diplomas and, perhaps, the grades issued them by that university (which brings up the issue of grade inflation at top schoolsbut that’s a whole other article...

...While Americans expect cost competitiveness and customer responsiveness from almost every other business-even the hallowed profession of medicine has lost much of its mystique-universities, particularly prestigious ones, still operate as if they are above it all...

...And although schools have increased financial assistance to students in recent years, the majority of aid (60 percent) has been in the form of loans, which students must repay, as opposed to grants...

...and so on...

...In recent years, the nation’s Ivy worship has reached a fevered pitch...

...And all too often they graduate without knowing how to think logically, write clearly, or speak coherently...

...Sure, the left-coast sofhKare indusay may not care where its programmers went to school, but credentialism is stili alive and well in a variety of professions, including law, finance, business consulting-even the media...

...Educators would, of course, argue that no test can truly measure intellectual development...

...Alas, such dramatic changes in tuition rates or educational investment are not on the horizon...

...In a December review of this book for the Monthly, Washington Post reporter Jay Matthews notes, “Every other page bears the unmistakable message that your life may be over if you are denied admission to Brown, Columbia, Cornell, Dartmouth, Harvard, Penn, Princeton, or Yale...

...Dartmouth hikes tuition 4 percent...

...Last year alone, it increased by enough to run the entire university for a full year-with $600 million to spare...

...Similarly, students owing $20,000 or more rose from 9 to 19 percent...

...Tuition increases have dramatically outpaced not only inflation, but also universities’ costs to educate students...

...And if you’re Bill Gates, you may have been tapped to give $15 million to a college from which you never graduated...

...some others may be tenured drones who deliver set lectures from yellowed notes, making no effort to engage the bored minds of the students in front of them...

...Take the Feb...

...At any moment, boards of trustees should be asking whether a dollar is better off going into an endowment or being invested in a young student’s mind or in research...

...If the school put even 10 percent of that income into scholarships, nearly 7,000 students who might not otherwise be able to afford Harvard’s $31,000-a-year pricetag could attend for free...

...The schools examined by the commission include the cream of our education establishment: Harvard, Stanford, Yale, Princeton, Duke, Rice-in short, some of the most respected (and most expensive) institutions around...

...Institutions Hold More Than $1.50 Billion...

...As people become more and more desperate to attend a handful of prestigious schools, they become less objective about those universities and less demanding about what they receive for their education dollar...

...As such, many (including Harvard) spend around 4 percent (or less) of their endowments...

...Education Consumers, Unit e! So why aren’t students and parents taking to the streets to demand change...

...Brother, can you spare a million...

...Just recently, a New York reporter half-jokingly asked me how I had managed to get a Washington journalism job without having attended Harvard...

...This drive to keep fattening endowments evokes images, not so much of a thrifty parent, but of Ebenezer Scrooge hoarding his gold while his poor clerk struggles to put food on the table...

...authors get rich exploiting parents’ anxieties with books such as A Is For Admission: The Ultimate Insider’s Guide to Getting into the Ivy League and Other Top Colleges...

...The strong economy, it seems, has been very good to our institutions of higher learning...

...In addition to annual giving campaigns (which raise unrestricted funds to augment schools’ operating budgets), universities are on an endless quest to increase the size of their endowments...

...The misguided notion that higher prices automatically mean higher quality-a phenomenon dubbed “the Chivas Regal effect”-may actually encourage universities to keep sticker prices high...

...Regardless of what one may or may not have learned at Columbia or Yale, the cachet of an Ivied diploma is powerful...

...But from our top private universities, with their multibillion rainy-day funds, such sentiments seem disingenuous...

...Even accounting for inflation, we’re talking about sums these schools could never have imagined 50 or even 20 years ago...

...University endowmentsthe pool of donated money, land, artwork, etc, that schools invest in stocks, bonds, and real estate-have benefited from the long-lived bull market along with everyone else’s investments...

...Between 1990 and 1997, Harvard’s endowment swelled $6.3 billion...

...Most institutions have to be responsible...

...But since Harvard has fewer than 7,000 undergraduates total, a better plan might be to apply that 10 percent toward a significant price cut for the 18,000 students in all of Harvard’s various schools (divinity, medical, education, etc...

...Such long-term planning is to some extent admirable-much like a frugal parent saving his pennies for his daughter’s college fund...

...For example, during the entire 1930s, Harvard’s endowment increased by $30 million...

...East Carolina University, for instance, has a paltry $27 million endowment...

...We have to be prudent...

...But they are only a first step-and a relatively small one...

...Much like politicians, universities and colleges always seem to have their hand out...

...Full disclosure: The author neither attended nor applied to any of the Ivies...

...Just this year, Princeton, concerned about a decline in middle- and lower-income applicants, announced plans to provide more student grants as opposed to loans...

...Faced with these figures, it’s hardly surprising that college graduates are increasingly fLvted on fmding high-paying jobs than on pursuing public-serviceoriented careers...

...A less formal but equally effective measure would be for students, parents, and alumni to start demanding more for their money...

...But as administrators ramble on about the need to ensure that their university will always be around, one gets the sinking feeling that institutional perpetuation and enrichment have displaced education as the schools’ fundamental goal...

...Perhaps...

...But many do emerge from college burdened with five-figure student-loan debts that hang with them for years...

...Adding insult to injury, the report reminds us that undergraduate tuition is “one of the major sources of university income, helping to support research programs and graduate education...

...Yale promptly followed suit...

...As Henry Hansmann, a law professor at Yale University, told The New York Times last month: “Saving is worthwhile only if you have a better use for the money in the future than you do now...

...Though it bears noting that this subsidy has shrunk over the past 15 years, according to the National Commission for the Cost of Higher Education...

...Such actions are a clear step in the right direction...

...If our thrify parent, for instance, becomes so obsessed with saving that he refuses to spend on books or tutoring or other items to nurture Little Susie’s intellect early on, that hefty college fund will be of little use...

...Yale’s from 24 to 17...

...While maintaining a financial safety net is all well and good, there’s a certain amount of spending that must be done along the way...

...Even the most nostalgic, school-spirited alumnus should be disturbed by the Carnegie report...

...and so on...

...Providing a broader view of the situation, a January report by the National Commission on the Cost of Higher Education notes that, between 1987 and 1996, the average tuition price jumped 132 percent for public, four-year colleges and universities and 99 percent for private ones...

...Many students graduate having accumulated whatever number of courses is required, but still lacking a coherent body of knowledge or any inkling as to how one sort of information might relate to others...

...Moreover, tuition increases have slowed considerably since 1993, though this may be less the result of public pressure than the fact that inflation is so low...

...The report notes that this nation’s 125 research universities (those that offer a range of baccalaureate and graduate degrees and receive several million a year in federal funding for research) are focusing on high-level research work at the expense of students...

...We’ve enjoyed an unprecedented five- or six-year period with the market performing like it is,” says William H. Boardman Jr., vice president for capital giving @e., big-money fund-raising) at Harvard...