Universities Are Chasing Endowments at the Students' Expense

The richest colleges and universities in the country are getting richer at an eye-popping rate. Harvard, with an endowment of $32.3 billion, the biggest by far of any university, is looking to raise an additional $6.5 billion. Cornell is seeking $4.5 billion, and even the University of Michigan, a public institution with an $8 billion endowment, is in the midst of a campaign to raise $4 billion. That follows campaigns that raised $6.2 billion at Stanford, $3.9 billion at Yale, $4.3 billion at the University of Pennsylvania and $6.1 billion at Columbia.

Yet despite all the money raised, tuition keeps rising. The sticker price of Harvard is now around $58,607 for a single year's tuition, fees, room and board. And schools like Harvard or Yale set the standard for other private colleges and universities. Oberlin, a small liberal arts college in Ohio, for instance, now charges $59,474 in tuition, fees, room and board.

Student tuition at places like Harvard is now almost an afterthought. It runs on a budget of about $4.2 billion a year in spending. Tuition, fees, room and board at the full price of $58,607 for its 6,700 undergraduates would amount to $393 million, or less than 10 percent. And after taking need-based tuition reductions into account, the university collects only about half that projected total from undergrads. So for $200 million a year, Harvard could be totally free to all undergraduate students. That's small change in comparison with the billions of dollars the university gets from donors.

Harvard plans to allocate its $6.5 billion, the single biggest amount ever raised by a college or university, in much the same way as other elite schools do. It said $2.9 billion would go to teaching and research, $1.6 billion to more financial aid, $1.3 billion to upgrading student facilities and other capital improvements and around $700 million in "flexible funds to foster collaborations and initiatives."

With campaigns at elite colleges and universities running well into the billions, fundraising seems to have become an end in itself. The logic is simple: The bigger the endowment, the mightier and more prestigious the institution appears. But in a time when the affordability of college is a crushing concern for the middle class, it would be nice if a few leading academic and intellectual institutions would think more about the next generation than the next donor.