January 12th, 2010


Money and education

The Pembroke College Foundation of North America in support of a small college at Oxford University gets 100 of my charitable contributions to higher education. In part, this is because I consider Pembroke to have been the best education that I received from the five institutions of learning that hound me for money every year. (St. John's School comes in very slightly behind at second, and Pomona College and the University of Texas School of Public Health tie for close third. Fifth, of course, is the University of Houston Law Center. This is not a slam on UH, which has a fine law school. It's a slam on law school. I fucking hated law school.)

I read this article about Oxford and Cambridge with interest.
LONDON – Oxford, Cambridge and other British universities said Tuesday that the government's plan to cut hundreds of millions of pounds (dollars) from their funding would put their world-class reputations in jeopardy.

Unlike most elite institutions in the United States, Britain's top schools rely almost exclusively on taxpayers keeping them going.

But strapped for cash, the government has slashed its higher education budget by 600 million pounds (nearly $1 billion) over the next three years — a figure British media say comes to a 12 percent reduction when combined with other cuts.

British universities have little chance of raising big funds on their own: Student fees by law are capped at about 4,000 pounds a year, and endowments generally are no more than modest.

The Russell Group, representing 20 leading research universities, said the cuts would have "a devastating effect, not only on students and staff, but also on Britain's international competitiveness, economy and ability to recover from recession."

"It has taken more than 800 years to create one of the world's greatest education systems, and it looks like it will take just six months to bring it to its knees," according to an editorial by the group's Chairman Michael Arthur and Director Wendy Piatt, published in The Guardian newspaper.
This is the other reason that Pembroke gets the bulk of my financial attention. While this article makes it seem like this is a shock to higher education in the UK, I'm not surprised in the slightest. My college in Oxford was one of the poorest for decades, and for whatever reason, philanthropy to educational institutions doesn't exist in the same way in the UK as it does here. Roy Disney, for example, was a distinguished alum of Pomona College, and he was active with the school until he recently died. I am confident that Pomona will see a hunk of his fortune land in its coffers after probate. I'm not as confident when a wealthy British alum of Pembroke kicks the bucket. (Mu uncle, though, says that Pembroke is the major beneficiary of his will. He has no children, and he visits the college at least every other year.)

The money crunch at these British institutions has been around for awhile, as far as I can remember. My dad also went to Pembroke (as did my uncle). It wasn't until the 1980s, when Sir Roger Bannister was the Master at Pembroke, that the College started hounding Americans for money. And I think it worked. The above foundation was founded, in order to make the taxes easier to bear. And I think that the College started turning around financially when they realized that Americans are more than happy to give to causes that done them right. By the time I got to Pembroke, most of the colleges were looking for ways of making extra cash off of foreigners. For example, I and the other half dozen foreign students at Pembroke paid full freight. Nowadays, I think there are 30 or so students from US institutions at Pembroke, paying tuition. Every school has seminars and retreats and summer programmes on their facilities when term isn't in session. Additionally, there have increasingly been partnerships with corporations and other institutions.

But the bulk of the money to run the Universities comes from the government. Tuition is nearly paid for in full, and rents are highly subsidized. In a financial environment where robust endowments were hit hard by the stock market crash last year, where charitable giving has been decimated, a government cut could be devastating. It's not unprecedented, though.

30 years ago or so, US public institutions subsidized education at a much higher rate than they do now. It used to be that the state of Texas kicked in two or three dollars for every dollar of tuition that a student paid at UT or Texas A&M. I think it's now something like seventy cents. (There's an interesting graph out there on higher education spending in this country vs. prison spending.) Two things started happening: 1) Students got used to paying a little bit more for public education, and 2) the private loan market opened up to cover the cost of tuition.

I don't know if that's going to fly in the UK. Frankly, the lack of endowments and philanthropy is more troubling than the lack of tuition. And while the institutions in the UK have done what they could to get support from the sources most likely to give (there's a reason that the business school in Oxford founded in the mid 90s is named after a Syrian businessman instead of a Brit). I think that the Brits are going to have to get used to the idea of giving back to their educational institutions if they want to keep them world-class.