[DidYaWipe]

Can't speak in regard to Cornell, but I think it's well past time to revoke the tax-exempt status of schools that rip students off with sky-high tuition while sitting on huge endowments. It's even worse when they're blowing money on athletic programs and new stadiums.

My university jacked tuition 24% in one year; and when asked why, they essentially said "because everyone else did."

For this and other offensive behavior, I instructed them to never again ask me for a penny; and they haven't.

[Upvoter33]

Let's say a University has $1m in the bank. In this case, they decide to use it to "endow" a "chaired professorship" to retain some top faculty member. The reason it works - the professor stays at said University - is because they give the professor the proceeds from the endowment (usually, this is like 5% expected rate of return, or in this case, $50k), which he/she uses for their research.

So now, should the University instead reallocate funds like that, thus (perhaps) losing top faculty, to (marginally) lower tuition?

Similarly, imagine a university raises millions of dollars for scholarships. Once again, they use the proceeds to fund the scholarships. Should they instead use the principal (as you're kind of suggesting), thus eventually running out of funds, or should they keep the endowment, and thus keep giving out scholarships?

Before condemning endowments, it would be better to first understand how they're being used. For example, if you found out that some large fraction was for student scholarships, would that change your position?

(to be clear, I'm not particularly on one side or the other here; I just think more nuanced positions are needed...)

[DidYaWipe]

Thanks for the reply and valid points. But I didn't say they should deplete the endowments; I'm saying that they are already garnering significant income from them (if they're large and invested competently).

And I still won't excuse raising tuitions sky-high "just because." And while I don't know the economics of athletic programs, screwing students while building three stadiums in a couple of decades isn't a good look.

[lolinder]

> rip students off with sky-high tuition while sitting on huge endowments

As has been mentioned elsewhere, sitting on endowments is what you're supposed to do—you don't burn through the principal, you spend the interest. The point of an endowment is to provide a sustainable baseline income to keep the school going forever, it's not like an investment round where you're expected to use up the runway in an effort to reach profitability through other income streams.

> It's even worse when they're blowing money on athletic programs and new stadiums.

Depending on which sports you're talking about and which schools, this might actually be an example of an investment that is expected to yield a return. At a lot of schools the sports programs subsidize the academics, so having a nice and roomy football stadium is actually a pretty sound investment into income streams that benefit everyone, even students with no interest in football.

[DidYaWipe]

Valid points, but I didn't say deplete the endowments. And I am curious about the economics of sports programs and exactly where the proceeds go.

[gruez]

>but I think it's well past time to revoke the tax-exempt status of schools that rip students off with sky-high tuition while sitting on huge endowments

As other people have mentioned in this thread, the point of endowments is to provide a steady source of income for the university's activities, not a piggy bank you can raid.

>It's even worse when they're blowing money on athletic programs and new stadiums.

I'm sure the right is equally mad about universities "blowing money" on humanities programs as well. Should we get rid of those as well?

[givemeethekeys]

How convenient. Call money something else to continue ripping people off.

[gruez]

Is your implication that non-profits shouldn't be able to keep money on hand and should spend anything they have saved ASAP?

[givemeethekeys]

Nope. It is my implication that they are sitting on a large pile of money and getting away with ripping people off, on top of tax breaks and a lifetime of indentured servitude for anyone foolish enough to take the bait.

[DidYaWipe]

I never said to deplete the endowments.

Not sure what you're on about with "the right" and "humanities programs." Do "humanities programs" bring in loads of cash?

[gruez]

>I never said to deplete the endowments.

But you specifically advocated for stripping a university's non-profit status, partly on the basis of having an endowment. Therefore it's pretty reasonable to extrapolate that you don't like the concept of endowments, even if you're not explicitly advocating for depleting them.

>Not sure what you're on about with "the right" and "humanities programs."

The point is that the right like sport programs, but the left thinks they're boondoggles, and the left like humanities programs but the right thinks they're boondoggles. Getting rid of sports programs is a good way to piss off the right, and for them to defund humanities programs next time they're in power.

>Do "humanities programs" bring in loads of cash?

You'd rather than universities stop doing things that generate cash for their educational mission?

[DidYaWipe]

I'm not convinced that the cash is really serving their "educational mission."