Monday, March 17, 2008

On Endowments, Grants and Baby Seals

We wrote in Cheers & Jeers today that the University has been duplicitous in discussing its financial operations. On Friday the University filed its report to the Senate Finance Committee concerning its endowment and financial aid policies. The wealthiest 136 colleges and universities (as measured by endowment) were asked by the Committee to respond to a survey. Notre Dame required an extension to complete its survey after the initial deadline (hey can I get an extension for admission, study abroad, drop date?).

On February 1, director of student financial strategies Joe Russo told Kate McClelland of the Observer that University spends $72 million on financial aid. In the report to the Senate Notre Dame listed $89 million in financial aid. And despite the fact that more students receive aid and the average award has gone up 107.3% in the last ten years, the average cost for those on aid has increased nearly $4000 dollars. The University also lags behind its peers in endowment pay out, which equaled 3.7% in 2006-2007. Most Universities with endowments of comparable size pay out more than 4 percent. USC and Rice both pay out more than 5%. The Senate is considering legislation requiring universities with $500 million or more in endowment to spend at least 5%. If the University spent 5% last year instead of 3.7% it would have had $56 million to spend. That's a new social science building and multi-purpose stadium for Olympic sports; that's 1272 full scholarships; that's 37 endowed professorships, that's 32482598 pounds of baby seal meat from The University could have done something with the money.

Commenting on reforms by other universities to eliminate loans from financial aid packages, Joe Russo said "There are too many factors that go into a financial aid decision to make a blind commitment based simply on income, but on average lower income families don't pay very much." This statement is supported by the Senate report: 4% of students in the class of 2011 receive an average of $42422 in grant aid. However, only one third of the student body receives $17000 or more, meaning the real cost for msot of us is $30000 or more, well out of range of the average family.

Notre Dame's increases (if they are in fact true) are laudable. But the University will continue to draw detractors if it doesn't at least run a better PR campaign.

In September 2006 the Chronicle of Higher Education, the flagship publication for colleges and universities, ranked Notre Dame 49th of the 59 wealthiest private institutions in its ability to attract low income students. The University disputed the methodology on the grounds that enrolling low income students doesn't mean that they graduate. Notre Dame has the third highest graduation rate in the country. Tom Mortenson of the The Pell Institute for the Study of Opportunity in Higher Education criticized Notre Dame for not reaching out to all members of the community, as a Catholic university should. His organization ranked Notre Dame the 19th most class-exclusive of the nation's 696 private four-year institutions. Mortenson suggested seeking out low-income students under a need-sensitive policy; director of admissions Dan Saracino decried such a policy under the pretense that financial aid funds would dry up and students couldn't afford tuition. This argument hardly seems valid when the University sits on $171000 per undergraduate in financial aid funds. However the University does employ "four full-time Admissions Office professionals to recruiting students of diverse socioeconomic status." Mortenson also complained of the 24% of the Class of 2010 who are legacies, the highest percentage in the nation. While Notre Dame's tradition of such high percentages of legacies smacks of incest (and I would argue is actually counterproductive) Saracino defends the practice saying "They bring academic credentials, a strong desire to be at Notre Dame, Catholicity and a commitment to public service." It's difficult to gauge whether that is actually true or not, but the man does read applications for a living so I'll give him the benefit of the doubt. But I will note that Wall Street Journal writer Daniel Golden dedicated an entire chapter of his book The Price of Admission: How America's Ruling Class Buys Its Way into Elite Colleges -- and Who Gets Left Outside the Gates to Notre Dame. "You do need the generosity of alumni and benefactors to help keep costs down, and provide financial aid for those that can't afford that," Saracino said. The benevolence of alumni can't be ignored but if they won't contribute because little Susie was passed over for a more qualified candidate then they don't live out the Catholic spirit and we don't need them anyway. Believe me, you'll lose far more donors because of Vagina Monologues and losing football than because of not admitting as many children of alumni.

1 comment:

Anonymous said...

I'm dense enough to query why there is so much emphasis on low income students coming to Notre Dame. As Professor Rice points out nearly every year, a Notre Dame education must have a special inflation rate since had it only kept even with inflation said yearly cost would be less than $20,000.00 a year (room and board).