CU lacks funds to substantially decrease tuition
Ivy League schools such as Harvard, Yale and Dartmouth will begin to ease the financial tension on the middle and upper-middle class next semester, but CU has no such plans.
Beginning in the 2008 fall semester, Harvard will charge its students with household incomes ranging from $120,000 to $180,000, 10 percent of their income for yearly tuition. This will drastically decrease the previous tuition these families would generally have to pay of more than $45,000.
Yale students hailing from families who make $120,000 to $200,000 annually will notice a 33 percent cost reduction from the previous years’ tuition.
CU, however, sees no such cost reduction in its future.
“The crucial thing to know is that the schools who are enacting this plan are largely private schools with enormous endowments,” CU spokesman Bronson Hilliard said. “They can take these endowments and convert them to other funding, which really only private universities can do.”
Harvard’s endowment is about $34.9 billion while CU’s is closer to $740 million, Hilliard said, and that to compare the two endowments and how they are spent would be similar to comparing a racecar to a Volkswagen bug.
Chris Bittman, Chief Investment Officer of the CU Foundation, explained the reason for such a difference.
“A reason Harvard’s endowment is so much more than CU’s is because it started a long, long time ago, while the CU Foundation has only been around about 40 years,” Bittman said. “Also, people tend to restrict donations, so CU can’t easily flip a switch and use them for its needs. Harvard though, has a lot of unrestricted assets.”
Bittman said that the distinction between private and public schools plays into the variation.
“Since Harvard is a private school they can kind of do anything they want,” Bittman said. “They are not subject to public disclosure issues; they are not subject to taking any money from the state. It’s a different type of setup.”
Harvard’s endowment has many restrictions also.
“About 95 percent of donations that go into school foundations are restricted in some way,” Bittman said. “Nobody writes a check and says here you go, just spend that. People say I want this to go towards something more explicit, like the music program of Colorado.”
CU Treasurer Don Eldhart said this is because of the power donors have over the use of their donations.
“When an endowment is accepted, the donor puts strings attached; he is pretty much in the driver’s seat and the board has to accept the donors wishes,” Eldhart said.
Instead of following in the footsteps of Harvard, CU is using its endowment money to directly finance about 1,400 different programs from scholarships to construction of new buildings to lab equipment, Bittman said.
Though CU’s endowments are not very large, last year CU was named one of the nation’s 25 most sustainable campuses by the sustainable endowment institute.
“The way we select managers and diversify (and) the way we take more risks allows us to do well with the money we have, though we don’t have so much of it,” Eldhart said.
Contact Campus Press Staff Writer John Tattum at john.tattum@colorado.edu
