The Post-Standard (Syracuse, New York), February 7, 2008, Thursday
Copyright 2008 Post-Standard
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All Rights Reserved.
The Post-Standard (Syracuse, New York)
FINAL EDITION
SECTION: NEWS; Pg. A1
BYLINE: By Rebecca James Staff writer
BODY:
Maybe this wasn't the best year for Syracuse University to make it into the billion-dollar club - the elite group of schools with 10-figure endowment funds.
SU and other colleges with endowments of more than $500 million are drafting responses to the Senate Committee on Finance answering a long list of questions related to the issue of why tuition keeps going up when colleges have so much money.
As U.S. Sen. Charles Grassley, R-Iowa, puts it: "It's fair to ask whether a college kid should have to wash dishes in the dining hall to pay his tuition when his college has a billion dollars in the bank."
Hitting the billion-dollar mark is an exciting milestone, but SU officials aren't bragging.
"A billion dollars sounds like a lot," said SU Treasurer Barbara Wells. "But if you look at endowment per student, compared to comparable institutions, we're very modestly endowed."
SU's endowment per student is $63,610, which puts it behind 195 other private institutions, she said.
Endowment numbers for fiscal year 2007, which ended in June for most schools, were released Jan. 24 by the National Association of College and University Business Officers.
That same day, the Senate Finance Committee sent out letters to 136 colleges with endowments above $500 million. In Central New York, those are SU, Cornell University, Colgate University and Hamilton College. The committee said strong endowment returns should encourage schools to take more out of their endowments to put into financial aid. They asked for replies in 30 days.
Last week, Cornell announced plans to spend millions more on financial aid, eliminating loans for families with incomes under $75,000 and capping them at $3,000 a year for families with incomes up to $120,000.
The plan had been in the works for a year, university officials said.
Politicians have been talking about getting tough with universities by considering measures like capping tuition increases or making schools spend a certain percentage of their endowments each year.
Congressional leaders should realize that rising tuition rates create a bigger pool of students eligible for financial aid, said Carolyn Ainslie, Cornell's vice president for planning and budget. And some families are wealthy enough to afford the sticker price.
"Capping tuition would subsidize those that don't need it," Ainslie said.
While Cornell is now paying out 4.7 percent of its endowment, the financial aid change will bump that up to 5 percent, she said.
Colgate's rate was 4.83 percent for 2007, while SU's regular payout was 4.4 percent. However, special distributions, aimed at funding an academic initiative, for instance, mean that SU is taking out just over 6 percent, Wells said.
Five percent would be a fair minimum spending rate, said Ronald Ehrenberg, director of the Cornell Higher Education Research Institute, who will be presenting his ideas to a conference for members of Congress in Charleston, S.C., starting Feb. 18.
Endowments have been earning about 10 percent over the long term, so they could retain their value by spending 5 percent, reserving 4 percent to cover inflation and using about 1 percent to run the endowments, he said.
Colgate University has no plans to change the amount it spends from its endowment, said David Hale, vice president for finance and administration.
Colgate's endowment jumped up nine spots in the rankings for 2007 after one of its best years ever, which included almost $44 million in gifts and an investment return of 22.2 percent.
"It was an absolutely fantastic year," Hale said.
However, the steep market declines in late 2007 and early 2008 are leaving most schools hoping to avoid losing money this year and making them leery of agreeing to increase endowment spending.
"We are basically looking for the endowment to provide generous support for our current students and faculty," Hale said. "We want to make sure that support is available for future generations as well."
GRAPHIC: GRAPHIC: The rich get richer The Post-Standard. College and university endowments grew by more than $71 billion in fiscal year 2007, with many endowments growing by more than 20 percent. The following figures rank colleges by the size of their endowments and reflect a net change after adding investment income and donations and subtracting spending for that year. 1. Harvard: $34.6 billion (up 19.8 percent) 2. Yale: $22.5 billion (up 25 percent) 3. Stanford: $17.2 billion (up 21.9 percent) 4. Princeton: $15.8 billion (up 21 percent) 5. University of Texas: $15.6 billion (up 18 percent) 18. Cornell: $5.4 billion (up 25.5 percent) 71. Syracuse University: $1.1 billion (up 19.6 percent) 102. Colgate: $709 million (up 27.3 percent) 103. Hamilton: $701.7 million (up 19.4 percent) 234. Ithaca College: $233.8 million (up 15.1 percent) 533. Le Moyne College: $49.1 million (up 23.4 percent) 621. Cazenovia College: $30.7 million (up 13.1 percent) 729. SUNY Cortland: $13.7 million (up 19.8 percent) 754. SUNY Oswego: $8.7 million (up 32.6 percent) *SUNY Upstate Medical University: $53 million (up 11.5 percent) Source: National Association of College and University Business Officers. *SUNY Upstate Medical University representatives provided a correction to its listing in the NACUBO report, so its ranking (based on the incorrect number) is not included.
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