A $35 million commitment to the University of Chicago from an anonymous donor will support undergraduate financial aid for international students, expanding the University’s comprehensive approach to educational access.
The new gift will increase global access to the undergraduate College by building on the success of the Odyssey Scholarship Program, the University’s flagship financial aid program that supports undergraduate education.
Is UChicago likely to become need blind for international applicants after this donation?
While $35 million is not a small sum by any means, annual budget of FA at U of C College is in the range of $130 to $160 million. Around 15% of The College population are international students. FA office isn’t going to spend the $35 million in two years. They are likely to going to spread over the sum for a decade or so and hope that investment return of the principal will keep it even longer. So it is unlikely this generous donation will make U of C need blind for international students. To make that happen, the donation may have to be in the scale of Bloomberg donation to JHU.
If there are international students already receiving some form of merit aid, additional cost to going need blind may not be as high as @85bears46 is anticipating, but I do get the overall point
I have no idea how colleges actually use their cause specific donation. Do they just spend them over a fixed period (5 years? 10 years? 20 years?) Or do they turn the money over to their endowment investment advisers and just use the investment return for the specific cause? Or a combination of both? I have no idea how that works. People with insider knowledge can enlighten me.
But let’s go with this hypothetical example. Assume the endowment fund management adviser can achieve 8% return (a random number).
$35 million x .08 = $2.8 million per year
There are 15% international students at The College:
1780 x .15 = 267
So each student share is roughly $10,500. If we use the the number that 64% of the students receiving financial aid, that share will go up to $16,400. That will help some international students but hardly enough to cover the sticker price of $80,000 + per year to be need blind.
At this level of donation, it’s very donor driven and specific to the terms agreed to by both parties. Very rare to have an unrestricted donation where the college gets to choose. But the donor doesn’t generally get 100% control, either. Instead, there’s a negotiation between the two where they agree to how the donation will be spent, saved, allocated, etc.
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@85bears46, your rate of return is probably a bit high. 4.5% makes more sense because that’s typically the assumed return on endowment for budgeting purposes at universities (can’t speak specifically for UChicago). That’s more like $1.6 mil. per year. Assuming an Odyssey student has a net COA of $20k per year (that’s a guess, btw) then we are talking about 27 additional internationals with significant demonstrated need. Not all internationals are going to need fin. aid - many won’t. But this allows them to select about 27 more w/o regard to finances.
It makes sense to begin building up financial resources to attract the international market, given the predicted demographic trends here.
@JBStillFlying I purposely use the higher number to illustrate that $35 million is hardly enough to make U of C render full FA for international students. If 8% return cannot cut it, a 4.5% return will be really be making a relatively minor dent in helping out all financially needy international students.
Make no mistake about it, I am applauding the donation. It is simply that the number is not big enough to make U of C need blind for all international students.
I think it does help the College in the long run if it can admit more intellectually qualified students from Third World countries. The $35 million is a great start for this long term strategy.
“The $35 million is a great start for this long term strategy.”
- My thoughts exactly.
Every board and foundation I’ve served with uses 4.5-5% spend rate off endowment, with 5% seen as aggressive. Issue is whether this donation was earmarked for endowment, or is simply an “in and out” donation such that they aren’t preserving the capital and can spend whatever they want over the next few years. If it’s in the endowment, a 4.5% spend rate yields only 20 full scholarships a year. Impactful for those 20 people, but doesn’t turn UChicago into a need-blind institution for international applicants.
How many internationals per year need full ride? If we knew that number, we would be in a better position to judge whether this is sufficient for need-blind policy? In other words, how much additional money would UChicago need above the amount it spent on international admits last year if it went need blind? How far would this gift cover the increase?
^ Best guess: a hella lot more than UChicago has the dough to support them. This $35 mil. isn’t sufficient. But it’s a start, as mentioned above.
Long term: the international market might play an increasingly larger role in college admissions, depending on the population demographics here.
I would speculate that it will always be the case (even with this scholarship money available) that international students will come from families of substantial wealth. (Canadian applicants might be or become an exception.) But if in fact something like twenty need-blind-type scholarships can be funded with this donation (five new ones per year?) that might not be too far from covering the pool of applicants vying for them. It’s a young age at which to be travelling a long distance from all you know - unless, that is, you come from a sophisticated and cosmopolitan family, hence a wealthy one in no need of assistance. Still, there will be exceptions, and I applaud the benefactor not only for the generosity and thoughtfulness of his gift but for remaining modestly anonymous, like his great predecessor Homer, founder of the Odyssey Scholarship endowment.