2008: School Reform, Endowments Dominate Education Debate

Posted on December 30, 2008

PND - 2008: Year in Review - Public School Reform, University Endowments Dominate Education Debate

As in the past, education reform received significant attention and dollars from foundations and individual donors in 2008. But the conversation around reform was soon overwhelmed by the growing turmoil on Wall Street and a relatively new topic of debate: rising tuition fees and the size of university endowments.

Funded largely by the Bill & Melinda Gates and Eli and Edythe Broad foundations, the Ed in '08 campaign ramped up its efforts early in the year to make education a top priority with voters, launching a multimillion-dollar ad campaign and conducting research on the abysmal lack of progress made by public education in the United States over the past quarter-century. The scope and urgency of the challenge was underscored by a Pew-funded report released in January which found that public school achievement in most states ranked below average, and a report from America's Promise Alliance, released in April, which found that only half of all students served by the public school systems in the fifty largest U.S. cities graduate from high school.

"Our schools have been underperforming for twenty-five years. America is slipping farther and farther behind the rest of the world academically because we have been unable to enact meaningful reforms or substantially improve student learning," said Ed in '08 chairman Roy Romer. "We know that the American public supports education reform — the missing piece is leadership [at] national and local levels. Without vigorous national leadership, states and schools cannot significantly improve their antiquated education systems. Students in our nation's schools deserve a robust and world-class education that offers them a pathway towards the American dream."

For many Americans, the biggest obstacle on that path seemed to be the relentlessly rising cost of college tuition. Indeed, rising costs coupled with soaring endowments at many institutions of higher education — a record seventy-two colleges and universities registered endowments of $1 billion or more in 2007 — soon led lawmakers on Capitol Hill to put pressure on schools to spend more of their endowments. That charge was led by Sen. Charles Grassley (R-IA), ranking Republican on the Senate Finance Committee, who in January requested detailed information from the nation's wealthiest colleges and universities and suggested he might introduce legislation requiring colleges and universities, which are tax-exempt, to spend 5 percent of their endowments annually, as private foundations are required to. "Tuition has gone up, college presidents' salaries have gone up, and endowments continue to go up and up," Grassley told the New York Times. "We need to start seeing tuition relief for families go up just as fast."

The issue lost some of its urgency as spring turned to summer and the financial markets continued to sink. At a roundtable convened by Grassley and Rep. Peter Welch (D-VT) in September, college presidents expressed concerns that any such legislation would interfere with their ability to manage in tough economic times. Others defended recent tuition increases, citing the need to keep up with technological advances and arguing that many universities had already expanded their financial aid packages and waived fees for lower- and middle-income families.

By November the debate struck many as moot, as Harvard and Yale, two of the wealthiest universities in the country, reported that the value of their endowments had suffered double-digit declines in the four months since June 30 and many other colleges and universities faced similar losses. At the same time, the need to make college a reality for as many students as possible seemed more urgent than ever. "There is no greater door to opportunity in this country than access to a quality education," said Allan Golston, president of the U.S. program at the Bill & Melinda Gates Foundation, which in December announced $69 million in grants to organizations working to improve college enrollment and completion rates. "Today, Americans without a college education live close to the poverty line for a family of four. That is why we are making a long-term commitment to dramatically increase college completion — a goal that is both ambitious and necessary."

Gates Foundation Announces Expanded Education Grantmaking (11/13/08)

Foundations Award $20 Million to Parent-Focused College Readiness Program (11/11/08)

Public-Private Partnership Launches Education Research Center at Harvard (10/01/08)

University Leaders, Lawmakers Convene to Discuss Rising Tuition, Endowment Spending (9/10/08)

Broad Prize for Urban Education Doubles to $2 Million (9/08/08)

Universities Facing More Pressure to Use Endowment Funds (9/06/08)

Strong American Schools Launches $5 Million Public Education Ad Campaign (7/15/08)

Alumni Group Presses Harvard to Do More With Its Endowment (6/04/08)

U.S. School System Has Not Improved in Past Quarter-Century, Report Finds (4/29/08)

Broad Foundation Announces 2008 Finalists for Urban Education Prize (4/03/08)

America's Promise Alliance Launches Campaign to Combat Dropout Crisis (4/02/08)

Soaring University Endowments Widen Education Gap (2/05/08)

Senate Finance Committee Examines University Endowment Spending (1/28/08)

Broad Foundation Awards $23.3 Million for L.A. Charter Schools (1/22/08)

Public School Achievement Low, Teachers Underpaid in Most States, Report Finds (1/16/08)

Foundation-Funded Education Campaign Moves Forward (1/04/08)