Good for Ohio State!!

[jimbogumbo]

https://thehill.com/opinion/education/589687-ohio-state-is-about-to-score-a-financial-aid-touchdown

[marshwiggle]

https://thehill.com/opinion/education/589687-ohio-state-is-about-to-score-a-financial-aid-touchdown

I can't tell from the article whether this means taking principal out of the endowments, or just interest. If it's the latter, that's great. If it's the former, it's unsustainable.

[Hibush]

https://thehill.com/opinion/education/589687-ohio-state-is-about-to-score-a-financial-aid-touchdown

I can't tell from the article whether this means taking principal out of the endowments, or just interest. If it's the latter, that's great. If it's the former, it's unsustainable.

The author (with experience in restructuring Latin American sovereign debt) recommends spending that large a portion of the endowment each year on increased financial aid.

The way I read it is that if a university is currently doing a sensible 4.5% draw, and they were to increase the financial aid by 2% of the balance, then they would need to stop doing about half of what they spend the endowment on now. Since a lot of places use that endowment to pay professors and for financial aid, it could get tricky to realize real offsets.

I suspect Ohio State does the math more simply. They say, "If you, our dear donors, give us $800 million we will be able to reduce student borrowing by $36 million a year."  Since students have $176 million in loans, that payout will bring the balance to zero within a decade.

Will Ohio State's donor increase their giving by nearly a billion dollars to achieve this goal? That's all it would take!

[apl68]

Will Ohio State's donor increase their giving by nearly a billion dollars to achieve this goal? That's all it would take!

When you put it that way, you wonder how could have taken them this long to figure out something so simple!

[mamselle]

OSU's donors only believe in football. (Alumna speaking....)

Therefore, sports has to come into the sales-pitch equation.

No cynicism here....

M.

[Hibush]

North Carolina increased spending by more than what Ohio State's plan proposes straight out of taxpayer funds to achieve the same no-loan result at three HBCUs. That may be a better success story than the what-if out of Ohio State.
https://www.chronicle.com/article/model-or-fluke

This is the same NC legislature that gives comparatively patrician UNC-CH all kinds of grief.

[dismalist]

https://thehill.com/opinion/education/589687-ohio-state-is-about-to-score-a-financial-aid-touchdown

I can't tell from the article whether this means taking principal out of the endowments, or just interest. If it's the latter, that's great. If it's the former, it's unsustainable.

The author (with experience in restructuring Latin American sovereign debt) recommends spending that large a portion of the endowment each year on increased financial aid.

The way I read it is that if a university is currently doing a sensible 4.5% draw, and they were to increase the financial aid by 2% of the balance, then they would need to stop doing about half of what they spend the endowment on now. Since a lot of places use that endowment to pay professors and for financial aid, it could get tricky to realize real offsets.

I suspect Ohio State does the math more simply. They say, "If you, our dear donors, give us $800 million we will be able to reduce student borrowing by $36 million a year."  Since students have $176 million in loans, that payout will bring the balance to zero within a decade.

Will Ohio State's donor increase their giving by nearly a billion dollars to achieve this goal? That's all it would take!

Yes, the key to this thing is getting another $800 million in endowments. [A far better article on the subject is in the Chronicle

https://www.chronicle.com/article/ohio-state-u-unveils-a-plan-for-all-students-to-graduate-debt-free]

Remember the dictum attributed to Senator Everett Dirksen: A billion here, a billion there, pretty soon you're talking about real money.

Higher education is the only industry I know of in which producers look for third parties who don't consume their products to pay for their products. Imagine Safeway's asking for an endowment increase to pay for all the groceries of its middle and upper income customers! Safeway's does solicit funds to feed the poor, which is fine.

I wonder if the policy is forwarded in good faith, or naiveté, or cunning PR ['cause it won't work]. I'm not accusing, just wondering.

North Carolina increased spending by more than what Ohio State's plan proposes straight out of taxpayer funds to achieve the same no-loan result at three HBCUs. That may be a better success story than the what-if out of Ohio State.
https://www.chronicle.com/article/model-or-fluke

This is the same NC legislature that gives comparatively patrician UNC-CH all kinds of grief.

Precisely! [If the program were family income dependent rather than institution dependent, poor kids could still go to college, but inefficient places could die a natural death.]

[jimbogumbo]

mamselle: didn't get to $6.8 big just with athletics donations:)

Hibush: the NC strategy is far better, no question. I'm going to guess in most states that won't happen, especially oof the perception is that the endowment is too large (whatever that means).

[mamselle]

No, but sports are the money machine.

I agree, the other stuff helps (and I received a very good education there, and recognize the quality of all its departments, really) but the enthusiasm is what makes people dig into pockets, and that's from sports.

No-one says, "Oh, that medieval program is outstanding! I want to be a part of what's going on there!"

Well, actually some do...but not at the level the sports program enthusiasts say it.

M.