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Most of it from the university's multi-billion dollar endowment.
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<p>Well, yes and no. While endowments can be a valuable, important revenue source for scholarships (and many other expenses @ colleges and u's ...chairs, professorships, facility maintenance, prizes, fellowships and assistantships, lectures, flower funds, arboretums, athletics (people, equip, facilities, positions), programs, ad nauseum etc.), much of it comes from 3 other revenue sources ...others tuition (yea, tuition figures recognize that a full paying student is paying for both his/her and some of others), current "annual" giving, and simply "other." Most places will tell you about a huge budget item called "unfunded FA" which is simply saying ..."well, it's better having a student @ half price than none at zero $." The rationale is ...got the profs, got the space, got the room so why not get SOME revenue, even if not all. And so it goes. </p>
<p>And the ultimate stressor/paradox is that generally the places with the least endowment are the ones that must offer the most FA. It's a perceived value, market thing. </p>
<p>But once one recognizes that a $1 M endowment generates $50 K annually in spending money ... well you begin to recognize what a monumental task it becomes to try and generate sufficient revenue via endowment. For example, Allegheny College, a very decent and expensive college in PA, now claims that something like 95% of incoming students receive some kind of aid, mostly institutional. Well, lets just say that tuition is $35 K/ year (or about). With 2,000 students that comes to a nut of about $70 M each year that one would need to pay the full freight. In endowment that would mean about $1.5 BILLION to pay for it all. But lets say we only have 95% of those students averaging about $20 K/student. Then we'd only need ... well you see the problem. It becomes astronomical. </p>
<p>btw, Allegheny's endowment ...before the slide was listed as ...$150 M of which only a relatively small part would be designated for scholarship. And now that's probly 100-110 M. </p>
<p>So you begin to see that an annual gift of $10,000 for scholarship funding becomes equivalent to about $200,000 endowment. The problem is ...for them to be of equal value, the college must get that $10K gift EVERY year. And now we know why they employ large numbers of staff working to generate both the endowments and those annual donations.</p>
<p>And in the end, most still have that huge unfunded nut. And what's the problem there? Well, at some point, the classroom needs painting, carpeting, new desks or even replacement (read :building); at some point the once empty dorm room needs same; at some point increasing student enrollments with unfunded aid requires hiring more faculty, generating more library and computing assets, having more coaches and leaders for ECs, etc. So unfunded aid is not a viable ongoing strategy.</p>
<p>The real problem??? Why is it that for over 30 years now, higher education costs have sky rocketed relative to CPI and virtually every other measure that all others (maybe government excluded :( ) with literally zero accounatability. Health costs and faculty "make up" can only be blamed so long. </p>
<p>In truth, it would seem like the consumer's being gouged. But ...in the absence of any oversight, unless one wishes to become a plumber, paperboy, or trucker ...well, they need that union card. So pay parents, pay, with not one clue what you're paying for.</p>