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Harvard now guarantees a full ride for every undergrad whose family makes less than $60k a year. Can UW (or any other public school for that matter) say the same?
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<p>Some of them are coming close, actually. And remember that Harvard is still expecting a student contribution and will offer Work study. Maybe it's a nitpick, but 'free ride' may not be the correct terminology. No loans, and no EFC for those making under $60L, that is true.</p>
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UW probably has more students each year from families making under $60,000 than the ENTIRE annual class at Harvard.
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<p>So? Provide better aid for them. You have a billion dollars. Use it. </p>
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And we all know even the "full-ride" does not cover all the expenses of college. Is Harvard paying for spending money, clothes, car, gas, Spring Break trips
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<p>Oh, so you are saying that these are the reasons that people drop out of college - because they need money to pay for Spring Break trips? Sorry to say it, but my sympathy for these students has just dropped to nil. Why do people think they are entitled to Spring break trips? I never took a Spring break trip before in my life. I was actually studying. </p>
<p>Clothes, car, gas? Really? I never had a car during college. I also don't think I bought more than $250 worth of new clothes every year when I was a college student. Yet you're saying that UW students need more than what I needed? Really? I think many readers here will now have negative sympathy for these kids. </p>
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inally, $1 Billion over 40,000 students is a long way from $35 Billion over 15,000 students. UW has good finanacial aid for instate kids but they can't cover everything for everyone
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<p>Uh, I am not asking you to cover everything for everybody. I am simply asking you to cover those students who are truly in financial peril such that they would actually drop out because they truly need to work, and that is only a fraction of the student body.</p>
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Also a recent study found that first time in the family students graduate at lower rates.</p>
<p>First Generation Challenges :: Inside Higher Ed :: Higher Education's Source for News, Views and Jobs
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<p>Yeah, for precisely the reasons that you and I said: if they drop out because they truly need to work, then the real answer is to provide better aid. Otherwise, don't admit them in the first place. After all, who are you really helping when you do that? These people are truly poor, and yet you end up taking their money and not even granting them a degree? Are they really better off? I would argue that they are worse off.</p>
<p>Now, for those first-generation students who don't graduate not because of financial problems but because they are not properly academically prepared (i.e. they didn't grow up in an environment full of books or that emphasized studying), then, again, the answer is either to provide better academic support or to simply not admit these people to UW. Instead, they should be going to a college that is more suited to their abilities. Again, who are you really helping when you admit somebody who is not properly prepared such that he can't graduate? </p>
<p>At the end of the day, the question still remains unanswered: why do colleges admit people who they know (or can reasonably predict) are not going to graduate? Now, granted, I am not asking for a 100% graduation rate, as nobody asks that. But if you strongly suspect somebody is going to have problems in graduating, you shouldn't admit him anyway, and if you do, you deserve to be called out for it.</p>
<p>Because MOST do succeed. It's all about opportunity. Even some college is better than none. Also your hairshirt attitude about college expenses is unrealistic. It does cost money for a myraid of things and you know it.</p>
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Because MOST do succeed.
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<p>Exactly, and that makes the problem even easier to solve. Most DO succeed, which means that you only have to help the minority who don't. So why not help them? </p>
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Also your hairshirt attitude about college expenses is unrealistic.
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<p>Uh, "hairshirt attitude"? You're the one who came up with "Spring Break trips". Sorry, I don't have any sympathy for somebody who wants to drop out of college in order to make money to afford a Spring Break trip. I doubt that anybody here does.</p>
<p>^^ C'mon, sakky, get real. A $1 billion endowment provides an annual revenue stream of $50 million, which divided by 40,000 students comes out to a grand total of $1,250 per student. And it's not as if this is free money just sitting around. A portion of it is already going to financial aid. Another portion goes to pay faculty salaries, which already are lower at Wisconsin than at virtually all of its peer institutions, at a time when the university is reeling from budget shortfalls handed down by the state legislature and key faculty are being lured away by competitors. I'm sure Wisconsin would love to be able to meet 100% of financial need as its better-endowed competitors are doing. But to suggest that the university is hording a pile of cash by withholding financial aid is just profoundly wrong and deeply unfair.</p>
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^^ C'mon, sakky, get real. A $1 billion endowment provides an annual revenue stream of $50 million, which divided by 40,000 students comes out to a grand total of $1,250 per student.
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<p>C'mon bclintonk, get real. Why do you have to help all the students? Barrons even specifically said (and I agree) that most students are fine. Hence, we are only talking about a minority of students who would need help. </p>
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A $1 billion endowment provides an annual revenue stream of $50 million
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<p>Uh, if you're only earning 5% on your endowment, you need to get a new endowment manager. Heck, I can probably earn 5%, and I'm not an experienced fund manager. After all, 30-year Treasuries are yielding 4.375% as of today. So all I would have to do is find an investment that makes 0.625% more than that. </p>
<p>Secondly, and I think more importantly, I think it just shows the importance of expanding your endowment through alumni contributions. Why not? The nearby University of Michigan has garnered massive alumni contributions over the last 20 years. Why can't UW do the same? </p>
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I'm sure Wisconsin would love to be able to meet 100% of financial need as its better-endowed competitors are doing. But to suggest that the university is hording a pile of cash by withholding financial aid is just profoundly wrong and deeply unfair.
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<p>Uh, I don't know, seems to me that a billion dollars is a lot of money. And like I said, only a fraction of students are truly not graduating because they can't afford it, so it's not as if you'd really need to be helping that many students in the first place. And even in this case, it begs the question of if these people truly aren't going to be able to afford to graduate, then why admit them? Who does that serve? </p>
<p>I suspect a far more important reason for people not graduating is simply because they are poorly prepared. But then that just begs the similar question of why should you admit these students? These students should instead be attending a school that is more consonant with their level of preparation.</p>
<p>You admit them because most do succeed. No, UW is not Harvard handpicking from the best students in the country (some of which don't graduate either). It's a large state university whose first duty is to give the students of the state a decent chance at a great education. 80% graduate and probably another sizable fraction transfer and graduate from another school. Those are decent odds. If they wre only graduating 50% I might wonder but 80% is fine.
And I was a working student paying my own way but I enjoyed my Spring Break trips with my friends as much as anyone. It's a nice part of college and I spent about $200 on each trip. We drove to the Florida Keys and Mexico, camped out and had a blast. It was well worth it. Sorry you missed out.</p>
<p>Despite how much one earns on the endowment, current standards usually call for spending no more than 5% of the market value. So the 5% didn't mean that the U has bad investment managers; it means that its board is following the general rule that most higher ed institutions follow. For the purposes of any discussion of endowment spending, it's a valid way to get your hands around how much of an endowment is "available."</p>
<p>It's another question whether the 5% is the right amount to have as the standard across institutions--some think it's too low. But that's a discussion for all colleges--I wouldn't single out Wisconsin.</p>
<p>Also most endowment money is dedicated to certain uses and very little is completely unemcumbered. UW has sufficient aid available for instate but many students like to be independent of their parents and pay their own way. I knew few people who did not work at least some of their years at UW. Carol Bartz, the recently retired CEO of Autodesk Co. recalled how her days as a cocktail waitress in Madison taught her useful lessons she used later in her working life. As I said, no aid package pays for all the expenses.</p>
<p>The</a> World According to Carol Bartz : The Carol Bartz Story - MORE Magazine</p>
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You admit them because most do succeed
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<p>Uh, I specifically stated previously that 78% of UW students will graduate in 6 years. </p>
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Those are decent odds. If they wre only graduating 50% I might wonder but 80% is fine.
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<p>I never said the statistics were bad, indeed UW is clearly better than most other schools in the country, public or private. </p>
<p>But what I am saying is that it makes the Harvard satisfaction ratings incomparable. Maybe 1 out of 5 Harvard seniors graduate, but at least almost all of them eventually do become seniors. Contrast that with other schools where a far higher percentage of students never even make it to the senior level, either because they drop out or transfer out. Surely, many of those who didn't make it were unsatisfied. {After all, if they were so satisfied, why didn't they stay?}</p>
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It's a nice part of college and I spent about $200 on each trip. We drove to the Florida Keys and Mexico, camped out and had a blast. It was well worth it. Sorry you missed out.
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<p>Aha, so you say it only cost $200? Ok, now, honestly, how many people actually need to *drop out of school *in order to work to make $200? I am going to go with 'zero' and I doubt that I'll be far off. </p>
<p>So pick your poison. Either Spring Break trips are cheap in case nobody really needs to drop out to make sufficient money to pay for them. Or they are expensive in which case nobody has sympathy for those who think they actually need to drop out of school to pay for them, for dropping out is a dramatic move. Either way, it's not looking good. </p>
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Despite how much one earns on the endowment, current standards usually call for spending no more than 5% of the market value. So the 5% didn't mean that the U has bad investment managers; it means that its board is following the general rule that most higher ed institutions follow. For the purposes of any discussion of endowment spending, it's a valid way to get your hands around how much of an endowment is "available."</p>
<p>It's another question whether the 5% is the right amount to have as the standard across institutions--some think it's too low. But that's a discussion for all colleges--I wouldn't single out Wisconsin
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<p>First off, I said in previous posts that I'm not trying to single out UW.</p>
<p>But secondly, I think you're actually wrong regarding endowment spending patterns: the 5% is the recommended minimum. Schools are clearly free to spend more than 5%. In fact, I would argue that they should. After all, almost every single endowment grows by far more than 5%, for as I have shown, it's not that hard to grow your endowment by 5%. (Like I said, I'm pretty sure I could earn 5% if I was the fund manager, and I don't have any wealth management background). So what that means is that, if schools only spent 5% yet made more than 5%, then the endowment would always be growing to perpetuity. What would be the point of that? The whole point of an endowment is to help the school, either now or in the future, not just to have a pile of money always growing forever.</p>
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Carol Bartz, the recently retired CEO of Autodesk Co. recalled how her days as a cocktail waitress in Madison taught her useful lessons she used later in her working life. As I said, no aid package pays for all the expenses.</p>
<p>The World According to Carol Bartz : The Carol Bartz Story - MORE Magazine
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<p>Carol Bartz actually proves my point: she actually graduated. </p>
<p>What you were talking about were people who needed money so desperately that they couldn't even graduate. For those people, UW (and every other school) should be providing better aid. Otherwise, don't admit them. What's the point in taking money from somebody who doesn't have much money, when you can reasonably predict that they're not even going to graduate?</p>
<p>Why are we even talking about Harvard versus other colleges. I follow college statistics pretty closely and when it comes to just about every statistic, Harvard is such an outlier that it's pretty much pointless to argue that Wisconsin has THIS number and Harvard has THAT number.</p>
<p><em>steers thread back on topic</em></p>
<p>I'm going to start digging around for some satisfaction surveys from other schools (as available through news articles, etc.) so we get a basis of real comparison. I'll probably start poking through "Top 20" Universities and LAC's, and I'll see what I find....</p>
<p>Sakky, the 5% minimum is the IRS rule for charitable foundations. It does not apply to higher ed endowments. The average spending in 2007 was 4.4% for those with endowments over $500 million. </p>
<p>I felt you were singling out Wisconsin (or bclintonk) because you were derisive of his use of 5% in figuring how much of Wisconsin's endowment would be spent. Contrary to your reaction, in higher ed it is very reasonable to assume that Wisconsin (or ANY institution) would or could spend about 5%. If I were doing ANY back-of-the-envelope calculation on spending for any higher ed institution, I'd use 5%. </p>
<p>The rule of thumb is 5% over a multiple-year average, although some institutions are changing the number of quarters or years over which that is figured. If Grassley, Baucus, and others have their way, the percentage might move up, but at this point in time I would question anyone using a higher figure when they were doing a quick analysis like this.</p>
<p>Sorry if this is contributing to the off-topic nature of these posts, but I feel this statement needs to be clarified.</p>
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The rule of thumb is 5% over a multiple-year average
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<p>And, the average is why you often see schools spending below 5% for a single year. Let's say that the endowment goes up 20% this year. Unless you are insane, you aren't going to bump up your endowment spending 20% to go along with that increase because you know that next year, the endowment might decrease in value. You can't follow the market swings that closely or your spending will go up and down like a yo yo. Instead, schools budget for a fairly steady 5% increase in endowment spending year after year, figuring that long-term that's a supportable number allowing for inflation. Because the endowment market did well last year, almost everyone came in well below the 5% target...not because their spending went down, but because the endowment values spiked up quicker than spending increased.</p>
<p>And this year looks iffy at best. Donations will also be down.</p>
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Sakky, the 5% minimum is the IRS rule for charitable foundations. It does not apply to higher ed endowments. The average spending in 2007 was 4.4% for those with endowments over $500 million.</p>
<p>I felt you were singling out Wisconsin (or bclintonk) because you were derisive of his use of 5% in figuring how much of Wisconsin's endowment would be spent. Contrary to your reaction, in higher ed it is very reasonable to assume that Wisconsin (or ANY institution) would or could spend about 5%. If I were doing ANY back-of-the-envelope calculation on spending for any higher ed institution, I'd use 5%.
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<p>First off, I did not bring up UW. Barrons did. So if anybody is singling out UW, it is him.</p>
<p>Secondly, I think you just put your finger on what I see to be a potential problem: why are schools so stingy with their endowments? The whole point of an endowment is to educate students, either current or future, not just to have a pile of money that grows to perpetuity, and I would expect any semi-competent endowment manager to be able to grow the fund at least 5% annually. If Barrons is correct and there really are students at UW who truly have to drop out because they can't afford the school, then doesn't that strike you as unconscionable that the school would not provide better aid to those students, when it's already sitting on over $1 billion? As I said, I am not asking for UW to provide better aid to all or even most of these students, but just those particular students who are truly on the verge of dropping out because of financial reasons. </p>
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Because the endowment market did well last year, almost everyone came in well below the 5% target
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<p>Uh, well then they're all terrible managers. Like I said, I can earn a super-safe 4.375% a year right now just by buying 30 year T's. These highly trained and professional endowment fund managers can't figure out a way to reliably earn 5%? Really? Come on.</p>
<p>Students should know that college does not define who or what they will be in life. I would not encourage my son to go to Harvard for undergrad. I think there is a lot more to life than study, excelence and competition. College time is meant to be fun, to really polish social skills that are going to be very important in the future. So I think it is more important for people to go to colleges where they will be pressured, but also where they will have fun and time to look for those things that they will really feel passionate about.</p>
<p>Harvard would then be a great choice for grad school.</p>
<p>I never said they drop out because they can't afford it. I said many are first timers who are less likely to finish for many reasons and many work while in school as they choose not to take money from their parents so they can be free to do as they wish without all the parental controls we see here every day. They might not be eligible for aid or don't choose to apply.<br>
As to endowment--they are aearning in the range of 10% so the endowment you call $1 Billion is actually about $1.7 Billion today. So now they get to spend 5% of a larger number. That's how most schools treat the endowment.</p>
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</p>
<p>You really don't get it, do you? They're not EARNING 5%, they're just SPENDING 5% of the total endowment after earnings. That way if the endowment grows 10% from 2007 to 2008, say from $1 billion to $1.1 billion, spending out of endowment funds grows from $50 million to $55 million---5% in either case. Spending increases $5 million, and 95% of the growth goes right back into the endowment. That way they can continue to grow the endowment to provide an even bigger stable revenue stream in the future. Your proposal, I take it, is to spend all the earnings. But that would actually deplete the endowment as those dollars lost real purchasing power over time, and it would also result in wild gyrations in the amount of available cash as earnings are likely to fluctuate more from year-to-year than are total assets. </p>
<p>I don't have the 2007 figures, but in point of fact from 2005 to 2006, Wisconsin's endowment grew from $1.1 billion to $1.4 billion, about a 27% increase. So I'd say their fund managers are not doing such a bad job.</p>
<p>Even more impressive: from 1986 to 2007, Michigan's endowment grew from $251 million to $7.1 billion, a 2,719% increase. As a consequence, an endowment that reliably produced a revenue stream of $12.5 million in 1986 now produces and annual revenue stream of $350 million. Had they piddled away all the earnings on current spending instead of compounding the earnings to grow the endowment, they'd be a very poor school now instead of one of the richest.</p>