Choosing St. John's Liberal Education Students Value and Affordability

Myths About Attending College: Part III

In Part I and Part II of this series, we looked at the first six of nine myths about private colleges debunked by the National Association of Independent Colleges and Universities (NAICU). Let’s finish now with the last three, after which I will say a few words about how these myths are harming prospective students, their parents, and higher education itself.

Myth 7: Private colleges have billion-dollar endowments that insulate them from economic reality

This is largely untrue. While a few of the best-known independent colleges and universities do have massive endowments, the vast majority do not. In 2013, the last year for which comprehensive figures exist, only forty-seven of the nation’s 1,600 private institutions had endowments worth a billion dollars or more. That is a mere three per cent.[1] For many of the rest, their endowment investments have not been returning enough to keep up with increasing expenses.[2]

And in recent years most private colleges have had to spend more out of endowment income than used to be considered prudent.[3] Why? Because of our unique commitment to making college available to all who really desire it: we have greatly increased grants subsidizing tuition and other costs in order to lower the out-of-pocket expenses to the vast majority of families that have been hit hard by the great recession.

For most colleges, their endowments hardly insulate them from economic realities. They merely provide the basis for prudent financial planning, and they must be managed conservatively to protect their principal, so that the endowments can support the next generation of college-bound students.

Myth 8: Private institutions are unresponsive to the needs of a changing society

Untrue. A simple glance at the websites of just about any private college will demonstrate that a vital concern is, and has been, the development of technologically sophisticated and flexible learning models. Independent institutions offer a wide variety of programs for adult students, and well as programs tailored for groups of young people who do not traditionally attend four-year colleges: for instance, many private colleges have standing transfer agreements with community colleges.

As I already mentioned, private colleges have a long-standing commitment to try to provide access for everyone who wants a college education. They responded to the recent economic downturn by rapidly expanding academic support and financial aid programs to help students from all backgrounds continue to complete a college degree. You can see information about these initiatives from hundreds of colleges at the Building Blocks to 2020 website.

Here at St. John’s College, on both of our two campuses in Santa Fe, New Mexico and Annapolis, Maryland, we know that the great recession has made it much more difficult for many families to afford the cost of a liberal education. For that reason, we nearly doubled our budget for financial assistance from $11.4 million to 21.9 million since 2008. And we have held tuition increases to a modest average rate of 3.7% over the same period. The result is that the average net cost of attending St. John’s has decreased even in unadjusted dollars, and still more so in dollars adjusted for inflation.

In order to do this, we had to rely on generous donors, who greatly increased their annual gifts as well as their gifts to our endowment, because they share our continuing commitment to providing our education to all who can benefit from it—whatever the financial constraints.

Myth 9: Private institutions are neither transparent in their finances nor accountable for their performance

Also untrue. As far as financial transparency is concerned, private institutions are highly regulated. They are nonprofit entities, and so they must abide by specific and detailed IRS rules relating to transparency in governance and finances. The public has access to much of this information online at the University and College Accountability Network.

As far as accountability for performance is concerned, the U. S. Department of Education requires every college that participates in federal student aid programs to be accredited by an approved agency. Accreditation, which occurs at ten-year intervals with secondary checks at the five-year mark, involves intensive examinations of both financial soundness and academic quality. The public can also see critical aspects of this information from more than 800 institutions at the UCAN website mentioned above.

This brings us to the end of the nine myths about college identified by NAICU.

Much could be said about how the persistence of these myths in the public mind is resulting in harmful consequences, both to individuals, and to higher education. Let me point out just two of these consequences.

First, these myths harm individuals by making both prospective students and their parents believe that college is beyond the reach of average people. This harms individuals who abandon the dream of a college education—which, as we have seen, holds both financial and personal rewards for those who receive it.

Second, these myths harm higher education by removing bright, talented, and vibrant young people from the ranks of college students. Higher education suffers immeasurably from the loss of even one such student; for in a community of learning, the learning of one can immeasurably enhance the learning of all.

Here at St. John’s, we are doing our best not to lose a single student to financial concerns. We continue to do everything we can to make our education affordable to all who have the desire and the ability to take part in our community of learning.

 

[1] National Association of College and University Business Officers and Commonfund Institute, “2013 NACUBO- Commonfund Study of Endowments,” January 2014.

[2] National Association of College and University Business Officers and Commonfund Institute, “2013 NACUBO- Commonfund Study of Endowments,” January 2014.

[3] National Association of College and University Business Officers and Commonfund Institute, “2013 NACUBO- Commonfund Study of Endowments,” January 2014.
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