Endowments

PHEAA Temporarily Suspends Federal Student Loans

Spellings Takes the Heat for President Bush's Education Budget Request

Public Colleges and Universities Pinched by State Budget Shortfalls

Brown University Increases Financial Aid

As the old adage goes, you reap what you sow. For many years colleges and university endowments, which receive very advantageous government tax breaks, have grown at extraordinary rates. Now, two high-powered senators are starting to ask questions about just what these wealthy institutions have been doing with their funds. While we applaud Congress’ efforts, we are afraid that too much of a focus by the Senators on tuition, rather than low-income student access, could lead to more improperly tilted financial aid policies — and an increasingly bifurcated educational system.

[slideshow]What prompted this latest attention to school wealth was the release of the 2007 Endowment Study by the National Association of College and University Business Officers. Going beyond the massive returns already disclosed by individual colleges, the study found that schools with endowments over $1 billion earned an incredible 21.3 percent rate of return for the 2007 fiscal year, only slightly more than the 19.3 percent return for colleges with endowments between $500 million and $1 billion. Even in aggregate, the 785 schools surveyed reported an average return of 17.2 percent.

Diversity and minority recruitment are hot button words in most four year college admissions offices. There's congratulations when enrollment demographics show greater racial diversity and consternation when minority numbers drop.

But are college admissions office recruitment efforts working? Colleges will, in a knee-jerk fashion, say: yes, look at our racial and ethnic percentages! College access for minorities is a reality here! But how much is minority recruitment in admissions offices really contributing to the diversity of college campuses?

Unfortunately, at some Division I schools, not much. The black-white diversity on many campuses is not always the result of better minority recruitment. It’s often the result of athletics, and in particular, football.

Inside Higher Ed analyzed data from the NCAA and found that at 46 colleges (of the almost 330 colleges that participate in Division I athletics) athletes comprise at least a third of the black male student population. At 96 schools, athletes comprise at least 20 percent. Compare that to the percentage of all male students who are athletes: 3 percent.

University of Phoenix Found Guilty of Securities Fraud, Must Pay $280 Million

A federal jury handed shareholders a major victory on Wednesday over the University of Phoenix, the largest for-profit university in the country. After only two days of deliberations, the jury found that the Apollo Group, the university's parent company, was guilty of securities fraud for withholding crucial information from investors and ordered it to pay approximately $280-million to the shareholders who had sued. In 2004, the company repeatedly failed to disclose in its Security and Exchange Commission filings and in its conference calls with financial analysts the existence of a U.S. Department of Education review that had blasted its student recruiting practices. That report, which found that the university had violated a federal law that bans colleges from compensating admissions officers on the basis of enrollments, became public only after the university reluctantly agreed to a $9.8-million settlement with the Department in which it denied any wrongdoing. The report's findings are also at the center of a separate False Claims Act lawsuit that has been brought against the university by two former admissions officers.

Boehner Paid $110k in Legal Fees as Part of Insider Trading Investigation

The office of House Minority Leader John Boehner (R-Ohio) appears to be a target in an ongoing investigation by the Securities and Exchange Commission into allegations that Al Lord, the executive…

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Sen. Hillary Rodham Clinton (D-NY) has followed the lead of Sen. Charles Grassley (R-IA) in pushing colleges and universities to make greater use of their endowments - echoing a proposal of the New America Foundation. Needless to say, associations representing wealthy colleges have not reacted favorably. Several…

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Wealthy College Endowments Keep Increasing

The endowments of the nation's wealthiest universities continue to soar. Stanford University reported this week that its endowment grew by 23 percent to a staggering $17.2 billion in the 2007 fiscal…

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Skirmishing Over Sallie Mae Deal Intensifies

Fighting intensified last week over the proposed buyout of the student loan giant Sallie Mae. A group of investors that had agreed to buy the company are now saying…

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The Senate Finance Committee appears to be moving forward with a proposal that would require wealthy colleges and universities to spend a minimum percentage of their endowments each year - a move which we at Higher Ed Watch strongly support. Private foundations, like the Bill & Melinda…

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9.5% Program Cost Taxpayers $3.5 Billion Since 2001

From 2001 to 2006 the Department of Education paid out $3.5 billion under a subsidy program designed to guarantee nonprofit student loan providers a 9.5 percent rate of return, the

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