WE Blog

Just as long as they keep their hands out of the till. No under the table deals with brokerage firms to sweeten the wallets of the board members.

Question–why would a university be “investing” tuition?

If they don’t need to spend tuition, why are they charging it?

ken, IIRC, KU’s endowment value is slightly over 1 billion. The problem with your suggestion is that much of the endowment at KU as well as at other institutions is that there are “strings” on much of the donated funds, that is, the gifts were given for specific purposes, and therefore are not available for use for any purpose other than that designated by the donors. While there are “unrestricted” funds, my review of the latest report from KU Endowment Association reveals many scholarship, etc. funds. Should more gifts be given for unrestricted purposes or for infrastructure? Perhaps; but donors usually like their names linked to something visible, and repairs to a roof, e.g., isn’t one of those things.

Capn, I think tuition is “invested” short term, much like insurance companies invest premiums. The tuition is charged and paid “up front”, then used over the school year to meet various expenses, salaries being one example. It makes sense to invest the tuition payments received at the beginning of a semester, then drawing out the funds as needed during the semester. BTW, this is what confuses me about the proposal. Endowment funds are long term investments; why would expertise in long term investments necessarily translate into better abilities to invest for short term needs?

No, just be consistent Capn.

If corporate profits are bad, then those who believe this should NOT be investing in profitable corporations.

It would be hypocritical to earn outrageous returns on stocks or corporate bonds, and then turn around and complain about these same corporations being greedy.

And the same ones who do not want to allow private investments for Social Security funds in 401k type accounts in stocks and bonds, are the same ones here who want University returns invested where? Stocks and bonds.

Steven, the increase in in-state tuition at the Regents schools has been remarkable. I can attest to the increase in tuition, etc., at private institutions over the same period. Not doubled, but healthy increases nonetheless.

One factor that is reflected in the tuition increase is the drop in the level of state funding as a percentage of total costs during the same period. I posted a statement from the KU Chancellor within the past two weeks on a thread here reflecting that the funding from the state was 24% in FY 2005. When I was an undergrad, I recall that state funding was around 30% of the cost.

Just who’s money is the university investing?

Would that be the hard earned money I spent, to send my child to college?

But wait! I thought the universities were crying they needed MORE FREE MONEY!! from the state?

But they have all this UNused tuition money just sitting in the bank?

Sounds like we should be able to REDUCE state funding to the Universities, since they are RICH ENOUGH to invest it (after stealing it from the taxpayer s).

Or how about reducing the tuition which has increased a whopping 125% over the last five years?

Apparently, our universities are flush with cash.

Tom Paine, university athletic departments which are separate corporations from the universities make millions off athletics. These millions are spent on athletic scholarships, coaches salaries and benefits, but do not inure to the general benefit of the institution. To change that, these programs will need to be brought “back in” to the schools, by abolition of the separate corporations running the athletic departments. In Kansas, this will require a statutory change by the legislature.

Tom Paine, I’ll see if I can answer your questions. First, as to Friends and Newman, I suspect there are no separate athletic departments/corporations for those schools. This seems to be a phenomenon limited to NCAA Division I schools. As to law vs. NCAA regulation, I am told that this idea (separate corporations operating the athletic departments) originated in the 1950s. I don’t know which university started the trend, but I do know that over time, all or nearly all D-I schools went along. I know that the Kansas legislature passed bills in the 1950s or early 1960s that authorized the separate corporations for each of the “big three” schools.

On your royalty question. I recall that recently, all the “big three” athletic departments gained control (if control wasn’t already there) of all royalties earned from sales of logoed tshirts, etc. As an alum of KU, I’m most aware of the situation there. I believe it was last summer that the KUAA acquired the rights to the “Jayhawk” logo which up to that point was owned by the Kansas Union Corporation (another corporation separate from the University) that had held the copyright, etc., since 1946 or so. This cemented all royalties going to the KUAA. It is my understanding with reference to the KSU Power Cat that this was designed by Bill Snyder, and assigned to the athletic corporation at KSU some years back. I’m not as clear as to WSU and the WuShock, but IIRC, the rights to that symbol are held by the WSU corporation that runs the athletic department.

In the case of KU, the royalty income went to help offset the expenses of operating the Memorial Union at KU. I’m informed that the Union corporation gets some pittance now as the result of the agreement with KUAA, but all in all, the money generated stays with the athletic department.

As I’ve posted before, the evidence of the separation was made clear last basketball season, when KUAA (the athletic department corporation) presented a check for $1 million to KU Med Center for cancer research. If the athletic department was, in fact, a part of the University, any funds transfer such as this would have occurred by a bookkeeping entry. However, given the separate nature of the athletic department and university, to transfer the funds, it was necessary to “write a check”, which was done to much publicity, the presentation occurring at half-time of a men’s basketball game.