SchoolFinder Blog

College Education

There has been a bit of a discussion lately concerning colleges and some rather large endowments. According to Wikipedia there are about 70 in the U.S. With over one billion in endowments.

When we start talking about large amounts of money like this it is inevitable that someone somewhere will complain that they have just too much money. Universities are tax exempt because they are providing education. Does that mean that the government should start dictating what the schools should do with that money? Most universities pride themselves on being independent especially when it comes to activities like research. I would be a bit concerned if anyone started dictating how money should be spent, even if it was on a noble pursuit such as helping students with tuition. (not to say it never happens)

In general universities are expected to spend 5% of their endowment each year. Meaning if they invest well and earn on average 8% on their money they are making 3% each year. This doesn’t include new money donated to the endowments.

Looking at the list of schools with over a billion dollars in assets and it becomes pretty obvious why many of these schools have so much money. I mean really does it surprise anyone that Harvard and Yale are the top two on the list? I guess I should be happy that Northwestern is in the top ten, barely. I’d be happier if they would forgive my student loans.

The most interesting college on the list though is Berea College, founded 150 years ago to educate freed slaves and “poor white mountaineers,” [Berea] accepts only applicants from low-income families, and it charges no tuition. Berea gives a free education to all students and in return the students work 10 hours a week, eat food from the college farm, and educate without frills.

I think this model is a great idea for the vast majority of college students I have known, myself included. My best semester during my first stint in college was the one I worked 20 hours a week on top of a 17 semester hour schedule. I figure it was because I didn’t have the time to goof off.

Of course there is no such thing as a one size fits all policy for anything. I can’t imagine Harvard or Yale not charging tuition to any students and Northwestern hasn’t called to forgive my loans yet. Berea is a great college and there should be more like it, but there is also a place for Harvard , Yale, and Northwestern in the scheme of things. There is even room for public colleges such as Northeastern Illinois University, another alma mater. State colleges like Northeastern do a great job of giving a good solid college education for a relatively inexpensive price.