Recruiting and Financial Aid

[Beeeej]

[quote Jacob 03][quote Beeeej]And you're suggesting that the other Ivies don't spend similar amounts of money on similar things?  Really?[/quote]Sigh.  I guess it depends on how broad your "similar" is, Beeeej.  All schools seem to be in the same boat in that they have boondoggles.  But most of these exist independent of each other and are tailored to the specific school.  If Cornell's efficient at everything but X (say, Cornell wastes money on campus beautification), and Columbia's efficient at everything but Y (say, Columbia wastes money on a failed expansion schemes), then Cornell working on eliminating X would give it an edge.  Theoretical Columbia would have to dip into its endowment if it wants to keep its expansion schemes going and lower tuition at the same time.    Theoretical Cornell could merely lower tuitions with the money not spent on campus beautification.[/quote]

Okay, you're switching premises, but let's go with this one as long as we're at it.

Do you understand how endowments work?

[Jacob 03]

[quote Beeeej]Okay, you're switching premises, but let's go with this one as long as we're at it.

Do you understand how endowments work?[/quote]I don't know how that's really switching premises.  I started off by saying Cornell spends a lot of ridiculous money on things the others schools don't.  I guess if we were trying to figure out help Harvard find some money, I would've phrased it by saying that Harvard spends a lot of money on things the other schools don't.  

As for endowments, yes Beeeeej, I understand how they work.  I wouldn't claim to be financially savvy enough to manage the investment of one, or know enough about whether a school can afford to recycle some of its yield in a given year.  I don't know if that really meets your qualifications.  The only reason we're talking about endowments in this thread is because someone pointed out that one school could afford to dip into its endowment a bit more and fund tuition that way, but Cornell couldn't because its endowment is smaller.  I don't know what's so odd about proposing that Cornell could fund tuition by cutting other expenditures.

[Beeeej]

[quote Jacob 03][quote Beeeej]Okay, you're switching premises, but let's go with this one as long as we're at it.

Do you understand how endowments work?[/quote]I don't know how that's really switching premises.  I started off by saying Cornell spends a lot of ridiculous money on things the others schools don't.  I guess if we were trying to figure out help Harvard find some money, I would've phrased it by saying that Harvard spends a lot of money on things the other schools don't.  

As for endowments, yes Beeeeej, I understand how they work.  I wouldn't claim to be financially savvy enough to manage the investment of one, or know enough about whether a school can afford to recycle some of its yield in a given year.  I don't know if that really meets your qualifications.  The only reason we're talking about endowments in this thread is because someone pointed out that one school could afford to dip into its endowment a bit more and fund tuition that way, but Cornell couldn't because its endowment is smaller.  I don't know what's so odd about proposing that Cornell could fund tuition by cutting other expenditures.[/quote]

It's odd because that's not generally how endowments work.  Cornell's current endowment of $5 billion doesn't cough up $250 million in spendable cash every year that Cornell may spend however it sees fit.  The overwhelming majority of the money is in restricted endowments.

If I give $100,000 to endow a scholarship, $5,000 (I'll consistently use 5% as the spendable interest just for argument's sake in this post) will be given as a grant to a deserving student every year.  Cornell cannot decide to spend $4,000 of it on a scholarship grant and $1,000 on campus beautification.  The same is true in reverse; if I give $100,000 to endow the care of a certain section of Plantations, or to endow the maintenance of a particular academic building, the $5,000 interest must be used for those purposes; Cornell cannot decide on their own that it's more important this year to use that money to lower tuition.

(In fact, an aside - Cornell is now more careful than it used to be to make endowments as flexible as possible while still serving something close to their original intended purpose; they learned that lesson the hard way when they realized they could no longer legally spend income from endowments for the now-closed nursing school on anything.  I'm not sure how that particular battle ended, but I do know they were trying very hard to free up that particular section of the endowment for other uses.)

Now, of course there is some unrestricted money in the endowment - or at least less restricted.  There are things like dean's discretionary funds, where the deans of the individual colleges decide how to spend the annual interest where they see the most need.  And you could certainly make the argument that the president or the provost or the deans should be spending that money in a way that lowers tuition.  But here's the counterargument:

Almost every endowed fund lowers tuition already.  If maintenance for an academic building isn't endowed, the money for it has to come from somewhere, and since Cornell's main source of income is tuition, tuition will have to be higher to cover that expense.  If there are fewer endowed scholarships, it's the students paying full price who subsidize those on financial aid - so in order to help the lower income students pay tuition, Cornell has to raise tuition on the higher income students.

Could Cornell decline endowment gifts for things that some people consider lower priority?  Sure, they could say, "We don't think a beautiful campus is as important as lower tuition."  Or, "Hockey is wonderful, but that enormous amount of money you're about to give us to endow Coach Schafer's position could be used differently."  But rather than convince the alum to give to a different area, they might not get the gift at all.  Of course there are limits; when I was a development officer I used to joke that Cornell would in all likelihood decline an offer to endow a Department of Bubble Gum, whether it meant losing the money or not.

But the fact remains that most endowment gifts already lower the burden on tuition - and even most current-use gifts help lower the burden on tuition, restricted or not, because they factor into future budgeting.

I don't believe that other schools have necessarily decided to tap into their endowments more, i.e., spend 6% a year instead of 5%, though I could be wrong (and even if they have, they would still be limited by the purposes of each endowment - so they could give $6,000 grants instead of $5,000 grants, but would that be enough?).  I believe they've simply managed to reach the point where their student aid endowments and unrestricted endowments are large enough that they can afford to stop acting as lenders and instead simply give the money away.  That's wonderful, but it's a point Cornell hasn't reached yet and may not reach for a good, long time unless the rate of giving by Cornell alumni picks up significantly.  On the other hand, it's wonderful that Cornell has reached the point they have reached, to be able to announce their new policies.  And I think it's wonderful that rather than renewing their commitment to needs-blind admissions every X years as they used to, Rawlings and the Board of Trustees renewed it permanently several years back and then raised $200 million in student aid endowment to help back that decision.

So leaving aside whether "Cornell spends money on things other Ivies don't" is a reason that Cornell's tuition is uniquely burdened or just happens to be a technically, factually correct statement, I don't think it has as much of an impact as you think it does.  And I know that Cornell's choice in the matter isn't quite as broad as you think it is.

[Jim Hyla]

[quote Beeeej] That's wonderful, but it's a point Cornell hasn't reached yet and may not reach for a good, long time unless the rate of giving by Cornell alumni picks up significantly(my emphasis, not Beeeej's).  On the other hand, it's wonderful that Cornell has reached the point they have reached, to be able to announce their new policies.  And I think it's wonderful that rather than renewing their commitment to needs-blind admissions every X years as they used to, Rawlings and the Board of Trustees renewed it permanently several years back and then raised $200 million in student aid endowment to help back that decision.[/quote]

Which brings me back to the point I made in the earlier post.

How many of you donate unrestricted gifts or gifts for scholarships. If you can't afford to donate much or any, do you work with your local alumni association or club when they are asking for solicitations? We can all help in our own way.

In my view, along with working on your local CAAAN committee, (it's the local committee that interviews prospective applicants from your local high school), it's the most important thing you can do for Cornell.

[mnagowski]

[quote Jacob 03]There's something to be said for having a beautiful campus, but it's expensive.  The apples and flowers part wasn't far off.[/quote]

Hockey teams are expensive too. But I suspect a lot of us wouldn't have such an allegiance to Cornell if there wasn't a hockey team. It's easy to quantify a return on investment for Notre Dame or Michigan football, but when it comes to Ivy athletics, there are a lot more intangibles involved.

As for the apples and flowers comment, need I remind you that agricultural research is an explicit part of Cornell's educational mission as the land grant institution for the State of New York? Anybody familiar with Cornell's role in the green revolution in India can tell you that the apples and flowers are worth it -- maybe not for Cornell, per se, but for the human condition.

Even then, I think it's fair to say that Cornell spends a lot less money on cutting the grass and manicuring the flower beds than some of our peer schools. The grass is cut on the Slope, what, every two weeks?

I think we could all take Jim's recommendations to heart.

[Jacob 03]

[quote Beeeej] It's odd because that's not generally how endowments work.  Cornell's current endowment of $5 billion doesn't cough up $250 million in spendable cash every year that Cornell may spend however it sees fit.  The overwhelming majority of the money is in restricted endowments.

If I give $100,000 to endow a scholarship, $5,000 (I'll consistently use 5% as the spendable interest just for argument's sake in this post) will be given as a grant to a deserving student every year.  Cornell cannot decide to spend $4,000 of it on a scholarship grant and $1,000 on campus beautification.  The same is true in reverse; if I give $100,000 to endow the care of a certain section of Plantations, or to endow the maintenance of a particular academic building, the $5,000 interest must be used for those purposes; Cornell cannot decide on their own that it's more important this year to use that money to lower tuition.

(In fact, an aside - Cornell is now more careful than it used to be to make endowments as flexible as possible while still serving something close to their original intended purpose; they learned that lesson the hard way when they realized they could no longer legally spend income from endowments for the now-closed nursing school on anything.  I'm not sure how that particular battle ended, but I do know they were trying very hard to free up that particular section of the endowment for other uses.)

Now, of course there is some unrestricted money in the endowment - or at least less restricted.  There are things like dean's discretionary funds, where the deans of the individual colleges decide how to spend the annual interest where they see the most need.  And you could certainly make the argument that the president or the provost or the deans should be spending that money in a way that lowers tuition.  But here's the counterargument:

Almost every endowed fund lowers tuition already.  If maintenance for an academic building isn't endowed, the money for it has to come from somewhere, and since Cornell's main source of income is tuition, tuition will have to be higher to cover that expense.  If there are fewer endowed scholarships, it's the students paying full price who subsidize those on financial aid - so in order to help the lower income students pay tuition, Cornell has to raise tuition on the higher income students.

Could Cornell decline endowment gifts for things that some people consider lower priority?  Sure, they could say, "We don't think a beautiful campus is as important as lower tuition."  Or, "Hockey is wonderful, but that enormous amount of money you're about to give us to endow Coach Schafer's position could be used differently."  But rather than convince the alum to give to a different area, they might not get the gift at all.  Of course there are limits; when I was a development officer I used to joke that Cornell would in all likelihood decline an offer to endow a Department of Bubble Gum, whether it meant losing the money or not.

But the fact remains that most endowment gifts already lower the burden on tuition - and even most current-use gifts help lower the burden on tuition, restricted or not, because they factor into future budgeting.

I don't believe that other schools have necessarily decided to tap into their endowments more, i.e., spend 6% a year instead of 5%, though I could be wrong (and even if they have, they would still be limited by the purposes of each endowment - so they could give $6,000 grants instead of $5,000 grants, but would that be enough?).  I believe they've simply managed to reach the point where their student aid endowments and unrestricted endowments are large enough that they can afford to stop acting as lenders and instead simply give the money away.  That's wonderful, but it's a point Cornell hasn't reached yet and may not reach for a good, long time unless the rate of giving by Cornell alumni picks up significantly.  On the other hand, it's wonderful that Cornell has reached the point they have reached, to be able to announce their new policies.  And I think it's wonderful that rather than renewing their commitment to needs-blind admissions every X years as they used to, Rawlings and the Board of Trustees renewed it permanently several years back and then raised $200 million in student aid endowment to help back that decision.

So leaving aside whether "Cornell spends money on things other Ivies don't" is a reason that Cornell's tuition is uniquely burdened or just happens to be a technically, factually correct statement, I don't think it has as much of an impact as you think it does.  And I know that Cornell's choice in the matter isn't quite as broad as you think it is.[/quote]Except I was specifically arguing the possibilities of Cornell making changes without touching its endowment.  Yes, I know that aspects are earmarked.  It's the same way for a large portion of Harvard's I'm sure.  The discussion came about because of the prospect that Harvard could free up a portion of its endowment, but that Cornell could not.  Maybe Harvard can't actually do this, and maybe Cornell's reasons have more to do with where the money's committed and not with the size.  I can certainly believe these.  But the only reason the endowment came up was because somebody proposed Harvard could do something with it that Cornell couldn't.  I replied that if that were true, Cornell could compete by doing something else that had nothing to do with Cornell's endowment.  All the specifics of Cornell's endowment weren't germane.  The idea was that at least some of Cornell's tuition money goes toward expenses that Cornell could decide to cut, and that if it cut them it could lower tuition.  It wasn't the beginning of a campaign to necessarily cut all those expenses that I don't happen to like (metaezra), it was simply stating a technically, factually correct statement.  

If what you're saying is that specific earmarks of Cornell's endowment cover every aspect of campus so that Cornell is unable to make a choice about scrimping and saving in any particular area, then you're right, Beeeej.  I thought Cornell had more room to maneuver than that.

[DeltaOne81]

[quote Jacob 03]Except I was specifically arguing the possibilities of Cornell making changes without touching its endowment...
If what you're saying is that specific earmarks of Cornell's endowment cover every aspect of campus so that Cornell is unable to make a choice about scrimping and saving in any particular area, then you're right, Beeeej.  I thought Cornell had more room to maneuver than that.[/quote]

I think this was the possibility Beeeej was raising, although I don't know if any of us have the stats to know for sure. But if Cornell spends $X on campus beautification, and that's because $X of interest from the endowment are specifically earmarked for that, then they don't have much option. Or, if even .9*$X of that are earmarked, then there's not nearly as much room to maneuver as a casual look at a list of expenditures may imply.

I wouldn't be surprised if a decent number of the larger donors remember Ithaca's/Cornell's beauty and want to contribute to that specifically. Not that I'd be incredibly surprised if it wasn't the case either.

I dunno if this information is publicly available, but even if it is, I don't know if any of us have the interest in picking through it line by line either

[Beeeej]

[quote Jacob 03]Except I was specifically arguing the possibilities of Cornell making changes without touching its endowment.  Yes, I know that aspects are earmarked.  It's the same way for a large portion of Harvard's I'm sure.  The discussion came about because of the prospect that Harvard could free up a portion of its endowment, but that Cornell could not.  Maybe Harvard can't actually do this, and maybe Cornell's reasons have more to do with where the money's committed and not with the size.  I can certainly believe these.  But the only reason the endowment came up was because somebody proposed Harvard could do something with it that Cornell couldn't.  I replied that if that were true, Cornell could compete by doing something else that had nothing to do with Cornell's endowment.  All the specifics of Cornell's endowment weren't germane.  The idea was that at least some of Cornell's tuition money goes toward expenses that Cornell could decide to cut, and that if it cut them it could lower tuition.  It wasn't the beginning of a campaign to necessarily cut all those expenses that I don't happen to like (metaezra), it was simply stating a technically, factually correct statement.  

If what you're saying is that specific earmarks of Cornell's endowment cover every aspect of campus so that Cornell is unable to make a choice about scrimping and saving in any particular area, then you're right, Beeeej.  I thought Cornell had more room to maneuver than that.[/quote]

I'm really not sure I follow the first half of the above post; but rather than try to read the whole thread again to see if I can figure it out, I'll address what I think you're saying later.

Is it possible Cornell could choose different priorities with its current use funding and thus lower tuition, keep tuition hikes lower, and/or provide more grants than loans?  Yes, probably.  But even if they did, I don't know how much of an impact it would have.  How much do you cut from where?  Just as a math-off-the-top-of-my-head figure, including grad students, I'm guessing that tuition at this point is a $600 million budget item.

So now the question is, how much is groundskeeping's annual budget likely to be - and how much of that can you cut before the campus attracts fewer people (including parents, prospective students, top faculty, and alumni and their money)?  $500,000?  $1 million?  Is it worth it to cut $1 million in groundskeeping in order to make tuition $50 cheaper for 20,000 students?  Would it affect Cornell's ability to recruit in all sectors?

Obviously groundskeeping isn't the only option, but it's the one I'm picking on because it's the one I think you emphasized.  But what other budgets would you cut?

I'm not saying the idea is pointless, but there are an awful lot of realities and difficult decisions that go into these budgets.  I certainly don't think the people making those decisions are infallible, but I would hesitate before suggesting that they don't try to do everything reasonably possible to keep tuition costs as low as they can given the university's other responsibilities and priorities.

I've hesitated to do it in the past because it used to be my job (though it's been almost eight years since I left), but I'll echo Jim Hyla's sentiments.  You and I have the power to make Cornell's priority-setting easier right now, every single day.

[Jacob 03]

[quote Beeeej]Is it possible Cornell could choose different priorities with its current use funding and thus lower tuition, keep tuition hikes lower, and/or provide more grants than loans?  Yes, probably.  But even if they did, I don't know how much of an impact it would have.  How much do you cut from where?  Just as a math-off-the-top-of-my-head figure, including grad students, I'm guessing that tuition at this point is a $600 million budget item.

So now the question is, how much is groundskeeping's annual budget likely to be - and how much of that can you cut before the campus attracts fewer people (including parents, prospective students, top faculty, and alumni and their money)?  $500,000?  $1 million?  Is it worth it to cut $1 million in groundskeeping in order to make tuition $50 cheaper for 20,000 students?  Would it affect Cornell's ability to recruit in all sectors?[/quote]Excellent and obvious questions, and all factors that go into Cornell's decision-making process, I'm sure.  Someone faced with the prospect of suddenly-cheaper competition from other schools would answer the questions a bit differently than current administrators, though, right? That was basically my point.

Obviously groundskeeping isn't the only option, but it's the one I'm picking on because it's the one I think you emphasized.  But what other budgets would you cut?

Perfectly fair, even though "groundskeeping" certainly makes it sound cheap.  I can think of lots, but they all involves the same type of "what do you prioritize?" decisions.  Someone smarter than me could think of even more, too.  I don't think there's a real limit.  I just think we're really committed to the ones we have through a combination of actual reasons and inertia.  And I certainly didn't mean to imply there'd be no far-reaching implications to any changes.

I'm not saying the idea is pointless, but there are an awful lot of realities and difficult decisions that go into these budgets.  I certainly don't think the people making those decisions are infallible, but I would hesitate before suggesting that they don't try to do everything reasonably possible to keep tuition costs as low as they can given the university's other responsibilities and priorities.

Well, I wasn't complaining about a bunch of accountants not doing their job, nor was I saying the decisions are no-brainers (well...maybe a couple).  I was stating that those making the decisions about priorities and dictating them could change some of their priorities.  In fact, I'd bet money they would, if faced with something as sweeping as the other Ivies all going tuition-free.

I've hesitated to do it in the past because it used to be my job (though it's been almost eight years since I left), but I'll echo Jim Hyla's sentiments.  You and I have the power to make Cornell's priority-setting easier right now, every single day.

Of course.  I would never imply otherwise.

[ugarte]

[quote Beeeej] You and I have the power to make Cornell's priority-setting easier right now, every single day.[/quote]
Oh great. So I can pay for a bunch of welfare queens to park their Cadillacs outside the Statler while they take Intro to Wines.

[KeithK]

[quote Beeeej]You and I have the power to make Cornell's priority-setting easier right now, every single day.[/quote]
I know my bank account isn't large enough to give me any measurable power.  Maybe I should go to law school? :-P

[ugarte]

[quote KeithK][quote Beeeej]You and I have the power to make Cornell's priority-setting easier right now, every single day.[/quote]
I know my bank account isn't large enough to give me any measurable power.  Maybe I should go to law school? :-P[/quote]
Maybe you weren't reading. You engineers have all of the blood money.

[Jim Hyla]

[quote ugarte][quote KeithK][quote Beeeej]You and I have the power to make Cornell's priority-setting easier right now, every single day.[/quote]
I know my bank account isn't large enough to give me any measurable power.  Maybe I should go to law school? :-P[/quote]
Maybe you weren't reading. You engineers have all of the blood money.[/quote]

And to return to being practical, the U is always looking for human power. You'd be surprised at the opportunities for volunteer work.

[Beeeej]

[quote ugarte][quote KeithK][quote Beeeej]You and I have the power to make Cornell's priority-setting easier right now, every single day.[/quote]
I know my bank account isn't large enough to give me any measurable power.  Maybe I should go to law school? :-P[/quote]
Maybe you weren't reading. You engineers have all of the blood money.[/quote]

In all seriousness, I think a large part of the problem is that people think they can't give enough to have an impact.  I don't know what you think of as "not large enough," and it's not my business, but for argument's sake let's say you're thinking $25 isn't a large enough gift to bother with.

There are (I think) about 160,000 Cornell alumni.  If 120,000 of them aren't giving anything, and (let's be conservative here) 20,000 of those aren't giving because they think $25/year wouldn't make a difference, that's half a million dollars Cornell's missing out on.  I don't think anybody would suggest half a million dollars a year wouldn't make a difference.

$500,000 of student aid endowment given in 2008 would produce $25,000 in grants in 2009, and the endowment would grow to $525,000 as well (conservatively estimating a 10% return with 5% payout and 5% hedge), producing $26,250 in grants in 2010.  But if everybody gave $25 again in 2009, you'd have a $1,025,000 endowment producing $51,250 in grants in 2010.  Play that out for a while, the numbers get pretty big.  That's a lot of help for students who otherwise might be burdened with loans and/or not be able to afford to attend Cornell.

Now imagine if 20,000 people aren't donating because they think $50 isn't enough to make a difference.

[KeithK]

[quote Beeeej]In all seriousness, I think a large part of the problem is that people think they can't give enough to have an impact.  I don't know what you think of as "not large enough," and it's not my business, but for argument's sake let's say you're thinking $25 isn't a large enough gift to bother with.[/quote]
The marginal impact of a $25 donation is insignificant.  But the aggregate impact of a large number of them is very significant.

It's very analogous to voting.  On the margin, the impact of an individual voter is insignificant.  It is vanishingly unlikely that the presidential race will be decided by my vote (rats!).  So it seems rational to not vote.

As with voting, the way to increase your power is to convince others to do what you are doing (donating to Cornell, hopefully).