Dollars and Sense
Will Cornell's Finances Sink the Big Red?
Something is happening in the Ivy League that already seems to be changing things for all the athletic teams.
After years of relative parity when it came to financial aid packages for athletes and everyone else, some Ivy schools are now proving to be "more equal than others" when it comes to how much money they're offering potential students and potential student athletes.
According to this article in the Cornell Daily Sun, the Big Red are bearing the brunt of this new paradigm with Columbia somewhere in the middle, and of course Harvard, Yale and Princeton at the top. (With Cornell's men's and women's basketball teams both on top of the league right now, this seems a little alarmist... but overall I think it's a good argument).
The elephant in the room is the spectacular new tuition procedures Harvard and Yale have already adopted that max out yearly tuition at 10% of a student's parents' annual income. The schools with huge endowments are the only ones who can offer this, and just about all the Ivies have a pile of cash. But with Cornell's semi-state school status, it's endowment is not as large as it could be.
Columbia's endowment is impressive by any standard, but the costs of operating in New York City may keep it from offering that 10% income-based tuition plan. Or would it? I'm in favor of the Manhattanville expansion 100%, but not all the new buildings and other expansions you've seen in the past at Columbia and other schools have really been necessary. And when you realize that so many new projects at major schools are directly the result of private donations, the need to use the endowment to start reducing tuition becomes more obvious.
Here's my rant: Instead of lauding these schools for finally lowering tuition to a reasonable rate we should be screaming at the top of our lungs about how all of this is about 30 to 35 years overdue! Universities should not be allowed to sit on billions and billions of tax free dollars while they charge huge tuitions to people who basically end up borrowing the money from the taxpayers to pay those tuitions.
As a Columbia alum whose parents and grandparents sacrificed tremendously to send me to college at what is now less than half the annual costs faced by today's students, I am very grateful. But unless Columbia and the other schools can match the 10% plan, the Ivy League will disintegrate both as an athletic and an academic conference. The schools that cannot make tuition more affordable will become the 21st century versions of Bennington, Swarthmore, and all those other schools that basically cater to the rich and have basically dropped competitive athletics.
COLUMBIA'S ENDOWMENT IS CURRENTLY MORE THAN $6 BILLION!
I figure that even if all 4,000 or so students in Columbia College are paying full tuition, (which of course they are not), we're talking about $120 million per year coming into the school that would be cut back significantly if Columbia adopted the "10% solution" like Harvard and Yale.
But let's say Columbia set aside 10% of the endowment, ($600 million), and let's say that money is put in an interest bearing savings account, (if such things exist for that amount of money), with just a 4% annual interest return on that money. That's $24 million right there. To make up the addition $96 million, I know I would be happy to pledge at least $1,000 a year in additional donations to Columbia in return for the reduced tuition promise to current and future students.
But again, Columbia College is SURELY not taking in the full-freight tuition from all its students. Instead of that $120 million, it's probably more like $80 million in undergraduate tuition revenue. And just to have more fun with math, let's say the average family income of current Columbia students is $150k. That would mean that even under the "10% solution," the school would be taking in roughly $60 million in tuition revenue anyway!
So, take that $20 million "loss" from going to the 10% solutions and, subtract the $24 millon from endowment interest, and now you're talking about a $4 million annual surplus!
And what about the kind of money that could come back in spades from happier and more successful alumni?
The money is there, it's time to use it to make a real difference.
The fact that it would help athletics is just the icing on the cake.
Jeff Orleans is on the Clock (CREDIT: IvyLeagueSports.com)
New Leadership on the Way
Ivy League Executive Director Jeff Orleans has announced he's leaving office in less than 18 months. Now is the time to campaign hard for a replacement who will make the following issues a priority:
1) Creating some kind of league-wide rules on financial aid for athletes in order to make sure the richer schools don't extend the lead they already have in sports.
2) Sending the Ivy football champion to the FCS playoffs and establishing an 11th regular season game.
3) Postseason conference tournament for basketball.
4) Relaxation of some of the most restrictive rules governing practice times and other schedules. (Not an elimination, but Spring practice could be extended a week and summer training camps should also be longer for football).
Commenters can feel free to add their major platform issues as well.
But all of us should make sure the true fans of Ivy sports get our voices heard about who we want in the leadership position. This is not a joke, die hard Ivy sports fans are some of the best donors and devoted alumni in the country. People who do not care whether competitive Ivy sports live or die should not be allowed one iota of influence in this decision-making process.
Here's my sketch of who would make an ideal candidate:
1) A former Ivy basketball or football player who has made a nice fortune in his/her post athletic career and thus would not be cowed by the "powers that be."
2) A former Ivy athletic director with keen knowledge of what the students, fans, and administrators need to succeed.
3) A former U.S. Senator or state Governor who knows that "rules" mean squat if they p*ss off your top donors.