Despite cries of poverty from university administrators seeking constant tuitions hikes — and more taxpayer subsidies — a new review finds major institutions are not only awash in cash, but that they are hoarding the cash contributed by alumni. For what? Who knows. But it apparently isn’t to the benefit of taxpayers or students. And when pressed on tuition hikes? The universities blame the taxpayers, legislators, and anyone else they can think of.
According to the Dallas Morning News, both the University of Texas and Texas A&M University rank in the top 10 schools nationally in terms of endowment size.
The U.T. endowment — essentially money raised from individual and corporate donors, but the lion-share comes from oil wells on land donated from the state to the schools — sits in excess of $13 billion, while A&M has almost $6 billion. What could you buy with that money?
A&M says one year of college is $19,035, including off-campus housing and books. With $6 billion, they could pay the entire 4-year college bill of 90,000 Texas students. At U.T., the endowment could pick up the tab of a 4-year-degree bill for nearly 141,000 students — assuming an annual cost of $22,000.
Obviously the endowments couldn’t be spent quite that cleanly (some donations were given specifically for building projects, renovations, etc.), but the sheer amount of money sitting in the universities’ accounts is staggering. These are public institutions choosing to hoard money, rather than serve the public.
A few years ago the Texas Legislature voted to “deregulate” tuition — letting the universities set the price. Sounds nice in theory, but in practice it’s lead to rising prices at what are still government institutions that don’t have the same competitive and market pressures that govern the behavior of private institutions. Not only are college professors, facility senates and most administrators immune from market-pressure thanks to hiring laws and tenure, they’ve also — in the name of academic freedom — been left free from meaningful oversight for their extravagant spending and academic results.
Every aspect of higher education — from governance to finances to classroom engagement — needs to change. Texans simply cannot afford for these trends to continue.
