Misuse of privilege (Pet Peeve #11)

From Slashdot.org comes this posting:

Stopping Universities From Hoarding Money 69

Posted by samzenpuson Thursday August 20, 2015 @08:14AM from the pile-of-gold dept.

HughPickens.com writes: Victor Fleischer writes in the NYT that university endowments are exempt from corporate income tax because universities support the advancement and dissemination of knowledge. But instead of holding down tuition or expanding faculty research, endowments are hoarding money. Last year, Yale paid about $480 million to private equity fund managers for managing about $8 billion, one-third of Yale's endowment. In contrast, of the $1 billion the endowment contributed to the university's operating budget, only $170 million was earmarked for tuition assistance, fellowships and prizes. Private equity fund managers also received more than students at Harvard, the University of Texas, Stanford and Princeton.
Fleischer, a professor of law at the University of San Diego, says that as part of the reauthorization of the Higher Education Act expected later this year, Congress should require universities with endowments in excess of $100 million to spend at least 8 percent of the endowment each year. Universities could avoid this rule by shrinking assets to $99 million, but only by spending the endowment on educational purposes, which is exactly the goal.  According to a study by the Center for College Affordability and Productivity a minimum payout of 5 percent per annum, would be is similar to the legal requirement for private and public foundations. "The sky-high tuition increases would stop, and maybe even reverse themselves. Faculty members would benefit from greater research support. University libraries, museums, hospitals and laboratories would have better facilities," concludes Fleischer. "We've lost sight of the idea that students, not fund managers, should be the primary beneficiaries of a university's endowment."

 

 

Hunky Husband and I were, just a couple of days ago, lamenting over the sky-high tuition charges* the state-owned universities in Kansas are charging these days. When he and I attended a state-owned school in Missouri, tuition was essentially free to in-state students. When I transferred to the then-city-owned University of Wichita (now Wichita State U), tuition wasn't free; but, it did not cost an arm-and-a-leg or I would have been out of luck. Ten years later, graduate school wasn't free at Wichita State U; but, it was reasonable and by then our finances could afford my tuition. Today, I'm not sure how anyone who doesn't get a full-ride scholarship can afford to attend any university!

 

Well, the universities are not alone in hoarding (and I couldn't tell you how much the state-owned schools in Kansas hoard, not having yet checked). We (collectively) decry huge corporations for what we consider to be their poor citizenship, their lack of caring for anyone but the stockholders to whom they are beholding. Even more, I decry all of the non-profit organizations, be they religious-based or be they enterprise-based. In Kansas, not-for-profit companies like LLCs [from Wikipedia: "A limited liability company (LLC) is the United States-specific form of a private limited company. It is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation."] and their owners pay no state tax on the income that the corporation produces.

 

Churches and non-profits are so pervasive (and growing!) that it is no wonder we have a hard time keeping reasonable tax rates on the "little people" while producing sufficient governmental income to support the services that only governmental units are equipped to provide.

 

* Tuition (not stated, but these number look like annual numbers to me) for the state-owned universities in Kansas, from College Data:

 

	Kansas	Kansas State	Wichita State	Fort Hays State	Pittsburg State	Emporia State
Equivalent Full-Time Students	19,217	20,169	11,787	11,433	6,236	3,873
In-State Tuition	$10,448	$9,034	$7,265	$4,766	$6,230	$5,746
Out-of-State Tuition	$25,731	$22,624	$15,299	$14,036	$16,336	$17,896
In-State Estimated Total Expenses	$22,880	$20,424	$20,063	$16,082	$17,602	$17,588
Out-of-State Estimated Total Expenses	$38,163	$34,014	$28,097	$25,352	$27,708	$29,738

 

Comments

[mage Bailey]

$5,472 a year in 2015 tuition only for my Alma Mater San Diego State University. It used to be $700.00 a semester when I started and was $900.00 when I graduated in 1989. Gosh those fees are high there.

[Ingineer66]

Since 1980 tuition at private universities is up 700%. At public universities it is up 800%. While gas prices are up about 250%.

[Cop Car]

Mage--It's been a while since we've crossed paths; but, I do stop into your place on occasion (beautiful quilt!) Thanks for dropping by and, welcome! Lucky you getting to go to SDSU!

Thanks for reminding me that giving prices without giving the time period is incomplete. Having started college in 1955, The Inflation Calculator tells me that the $100/year tuition of those days would be $872.10/year in 2014. As I recall, the tuition remained the same until Hunky Husband finished his degree and we left in February 1959, at which time I was in the middle of my senior year. I worked for a couple of years before transferring schools. When I started school in 1961, I think the tuition was about $600/year - $4684.33/year in 2014 dollars.

Ingineer--Are those costs adjusted for inflation?

[Ingineer66]

No they are just the straight cost increases. That is why I included the gas price increase that should be close to what inflation is. So by my seat of the pants calculation, tuition is increasing at about 3 times inflation.

[Hattie]

My husband's undergraduate tuition at Berkeley in the 50s was $25.00 a semester. His grad school tuition at Madison and half of our living expenses were covered by a NASA scholarship. Those were the days!

[Ole Phat Stu]

Back in the early sixties in the UK, we were paid "Student Grants/Scholarships" to attend university because the country wanted more scientists and engineers. Repayment? Only by way of progressive taxes on later (higher) earnings, not directly, it wasn't a loan but a grant.

Nowadays in the UK, there are student loans which have to be repaid.

[Cop Car]

Ingineer--Well, you had written "1980". I missed that, somehow. According to The Inflation Calculator, "What cost $100 in 1980 would cost $282.89 in 2014" so your pants seat numbers were really close!!

Hattie & Stu: Elder Brother was awarded a full-ride privately-funded scholarship for his first two years of college. Younger Brother's PhD and half of his MS work were paid for by his employer (the US Navy). I, on the other had, could find no scholarship for a woman entering a technical field (but, I didn't have much help from the high school counselor and, coming from a family in which Hunky Husband's BSEE would be the first college degree earned, I was anything but savvy). I was given a "Curator's Award" for scholarship that could be applied to tuition at any state-owned school - which I used. I think it covered tuition for my first two semesters.

Giving credit where due, Boeing (for whom I started working in January 1974) paid one-half of my school fees for the last nine hours of my MSEM course work and thesis and one-half (or 100%, I don't recall) of my school fees for a few hours of PhD (Aeronautical Engineering) course work. Cessna picked up the school fees for a few more hours, their having hired me when Boeing laid me off (six dynamicists out of a group of 17 were laid off the same day - me being the least experienced. The next-least experienced had been there for three times as long so I didn't feel at all badly about it!)

[Ingineer66]

Seat of the pants engineering is my life. And every time I read about all the schooling and work experience that you have, I am reminded of how brilliant you must be to be around in real life.

[bogie]

When I was taking classes in the 90's and early 2000's, I was paying anywhere from $600 to $90000 per class - depending upon credits and if labs were needed. I took several classes in 2007-2008 that were $1100-1200 per class. None of these were graduate level - just in pursuit of my bachelor's degree, or continuing education.

Books were additional, and was cost was regardless whether it was an 8 week or 16 week class (same material, tests, assignments etc, just compressed time). That was at non-state schools, which are cheaper than state-owned schools.

My work did pay for 1 class per semester (as long as I got at least a B), but I usually took 2, and sometimes 3 classes per semester. I also took 4 classes while I was laid off for 9 months and my last 2 classes for my degree while I was working for a company that had 7 people (including the owner) - obviously they didn't pay anything.

However, there were several semesters that I took no classes at all because I knew I would miss too many classes. Or there was threat of layoff so I didn't want to risk owing for classes I wasn't counting on paying for (or, tipping the company budget too much). That is why it took me 7 years to get a 4 year degree :)

I put in lots of overtime to make my education happen - it was a priority for me so I did what I needed to do.

[bogie]

Okay, that should have read $600 to $900 per class. There is no way I could afford a $90000 class ;)

[Cop Car]

Ingineer--You give me too much credit, kind sir. I like to think that we would be good friends in "real life" were we in closer proximity.

Bogie--I rather figured the $900 - lol! You may recall Dwight Tullis (water-skiing in Oklahoma). He did his BS in Engineering at night school while working full-time at Cessna. It took 14 years. Sticking to a project is admirable. In life, you've pretty much done everything on your own. Well...you did have scholarships to cover your dog grooming and bartending schools! ; )