The average total cost of tuition, fees, room, and board rose 10% over the past five years at public colleges and by 12% at private institutions, according to The College Board. But median family income rose only 7%.
Anyone with eyes can see that’s a problem. President Trump has condemned the fact that tuition is rising higher than inflation, and mentioned punishing colleges with large endowments that don’t use a bigger percentage of those funds to lower tuition and cut costs.
But some schools have larger endowments than others. According to the National Center for Education Statistics, 15 universities had over $7 billion in the bank (as of the end of the 2014 fiscal year). These funds, which typically represent money donated to the university, are often under a strict allocation policy, meaning the donor can specify and prohibit what the money is used for. Common uses could be to attract world-class professors, grow the football team, revamp the library, or perhaps most appropriate, create additional opportunities for scholarships and merit-based aid. Typically, only about 5% of the endowment is spent, while the rest is saved. So it begs the question: Where does the money go? And why college still so expensive if universities are so flush with cash?
Unfortunately, not enough colleges — particularly wealthy colleges — are allocating the portion of funds they do spend toward scholarships and grants. And Congress would like that to change. “Institutions are not passive in raising funds. If they really wanted to, they could ask for donations for financial aid specifically” Andrew Nichols of The Education Trust tells CNN.
Now, to be fair, some already do. At private colleges, the average family paid $26,080 for tuition, fees, room, and board compared to the average sticker price of $45,370. Still, that’s about 46% of median family income. Other colleges could do better. Despite being labeled as the richest colleges in the U.S., tuition at these 15 institutions remains steep. Are budget cuts in order? Maybe a required course called Money Management 101? For some universities, we think so.
15. Emory University
- Endowment: $6.98 billion
- Annual cost of attendance: $66,950
Emory is a private Methodist university located in Atlanta, Georgia with nearly $7 billion in the bank. It’s also a smaller school with less overhead and fewer students. Still, only about half of Emory students receive some sort of financial aid, which cuts the average cost to $25,928.
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