
How Berea College Makes Tuition Free with its Endowment - danso
https://www.theatlantic.com/education/archive/2018/10/how-berea-college-makes-tuition-free-with-its-endowment/572644/?single_page=true
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bacon_waffle
Berea is great - both the college itself, and the community around it.

There's a local community high school with ties to the college; students there
who are keen can attend classes at the college, for both high school and
college credit. It seems like a great way for kids to "test drive" college in
general, and more smoothly transition to independence.

And, the community high school looks straight out of The Jetsons:
[http://marrillia.com/wp-content/uploads/2017/03/berea-
commun...](http://marrillia.com/wp-content/uploads/2017/03/berea-community-
school-1.jpg)

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ratliffchrisb
Yeah, my wife and I went to the spoonbread festival a few weeks ago it was a
lot of fun.

The college does a lot of cool things in the area. A lot of the classes in the
area for crafts and such are nice.

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gregw2
Beware friendly Berea-- of the temptation to change your tuition free-stance,
even a little bit. It's a slippery slope.

Rice University was founded in 1912 with an endowment and grants and the
stipulation in its very charter saying "no tuition", but then the
administrators moved to change the charter (to eliminate the racist "white"
requirement) and as part of that also, guess what, moved to start charging
(1965) rather than depending on the endowment.

The tuition has grown steadily since, from 0 to a third the price of
comparable private schools in the 90s (and comparable price to public
universities) to now be a pretty full-freight $50k/year.

This, combined with the steadily increasing tuition across all universities --
(inflation eased in 1982 but colleges kept increasing rates discovering the
market would allow them to charge more) -- has cynically angered me for some
time.

Unlike a business, the tax-sheltered endowments fuel a bit more cynicism than
just a raw price increase. There was a joke at Princeton back in the 90s that
if the board of directors ever allowed the university to spend down the
endowment, they could fund ever-increasing tuition for all students for the
next thousand years. Is perpetuity truly needed/healthy?

An education is supposed to free a person, not put them in bondage/slavery.

An endowment should free and empower the students (and thus our civilization)
as they start their lives, not the administrators and faculty and institution.

Beware, you educators and administrators who put chains on your students to
feather your nest and attempt to increase your prestige!

Beware you administrators who create unnecessary buildings with dozens of
spaces empty 90% of the time all to woo professors or create your own mini-
legacy. And then claim the university is meeting glowing "sustainability" and
energy efficiency objectives! (You may get to stay in your office but the
degree of walking for students ever-increases and now shuttles are needed!)

Beware you ranking agencies who weight how much a university spends per
student as a factor in how good the university is!

Beware you congresspeople who make it easier for universities to charge more
by creating huge student loan programs that allow students to go into great
debt and subtly mis-direct their ambitions and outcomes towards those which
allow them to service their debt!

OK, rant out. Thanks for passing along the article. There has been some
progress at the above named institutions to provide tuition for lower-income
families. I don't consider it adequate to address all my points.

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ChrisLomont
> There was a joke at Princeton back in the 90s that if the board of directors
> ever allowed the university to spend down the endowment, they could fund
> ever-increasing tuition for all students for the next thousand years.

Back of envelope: Princeton endowment ~22B. Enrollment ~8200. Current tuition
~$45K/yr. 22 * 10^9/(8200 * 45000) = 59.6.

So in ~60 years, without even adding in inflation or the "ever-increasing
tuition" or allowing more students as population increases, they'd empty the
endowment.

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nshelly
Princeton's current 2018 size is $25.9B. In 2001 it was $8.4B, so a annual
growth rate of over 6% per year.

So Princeton would have to spend 1.6% of their endowment every year to offer
free tuition to their students. Assuming their rate of return on the endowment
(including alumni contributions) can grow faster than the cost of tuition
growth, they can provide free tuition for their students indefinitely.

~~~
ChrisLomont
Princeton tuition was 26K in 2001. It is now 45K. That's 3% growth in tuition,
cutting into your estimate.

The current growth is already being spent to fund the university to the tune
of ~4-6% [1].

So, if you take that source away, tuition would likely have to pick up the
slack.

Care to rerun your numbers adding this all in?

[1] [https://www.princeton.edu/news/2013/10/18/princeton-
endowmen...](https://www.princeton.edu/news/2013/10/18/princeton-endowment-
earns-117-percent-return-10-year-average-grows)

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Stronico
My grandfather went there in the late 20s-early 30s, graduating with degrees
in economics and woodworking IIRC. As I recall he described education there as
very much a group effort - working together was a bonding and binding
experience.

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sunnya97
The Cooper Union in NYC used to do something similar for over a century until
they were forced to stop in 2014 due to a combination of many financial
factors, including the financial crisis of 2008.

You can read the entire story of it here:
[https://en.wikipedia.org//wiki/Cooper_Union_financial_crisis...](https://en.wikipedia.org//wiki/Cooper_Union_financial_crisis_and_tuition_protests)

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RickJWagner
Sounds like a great thing.

There's another college, located pretty closely, that also offers no tuition.
(It's College of the Ozarks, in Missouri.)

I wish there were more schools like these.

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olingern
Berea Computer Science alumn here. Ask me anything.

I grew up in Appalachia (pronounced "app-uh-lai-cha" by us), and have to say
Berea was a godsend. I was lucky to start as desktop support and move on to a
network engineer later. The labor program is probably the only reason why I
became a somewhat competent programmer out of college, since I was writing
"production" code before having my first real full time job. You can read more
about the labor program here[1]

The college is very particular about your time there, since it's free and all,
so your first year you're not allowed to have a car on campus, enter the
opposite sex's dorm rooms, and (in some cases) you're tasked with a job that
you may or may not like. Some of this may or may not have changed in the past
10 years. Most people hear this and think, "that's crazy," as I did at the
time, but as I've grown older -- I've grown to appreciate it.

Another interesting thing is how forward thinking the community is in the town
of Berea. Kentucky isn't the friendliest for being a moderate or liberal, but
(I would say) Berea is probably the friendliest community I've ever been apart
of. It's a place where you can having engaging discussions and make friends at
local establishments (BC&T[2] being my favorite).

With regards to the article, the endowment, and replicating the model -- it
would be hard. The college runs itself efficiently while maintaining a high
quality of education and student services. Replicating this model elsewhere
would mean cutting many staff, removing the luxuries that many people enjoy
and most likely lowering salaries. Lower salaries work in Berea because the
cost of living is so low; however, that's not the case in many areas and no
one is going to volunteer themselves for a salary cut.

The labor program has a lot of infrastructure around it (payroll, staff,
processing incoming students) that would be hard to replicate. I think
existing universities would have to run a program within or alongside their
work-study programs and grow it overtime.

1 - [https://www.berea.edu/labor-program-office/a-guide-to-the-
la...](https://www.berea.edu/labor-program-office/a-guide-to-the-labor-
program/)

2 -
[https://www.tripadvisor.com/Restaurant_Review-g39187-d222579...](https://www.tripadvisor.com/Restaurant_Review-g39187-d2225795-Reviews-
Berea_Coffee_Tea-Berea_Kentucky.html) ( Seems that they don't have a website )

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chrisseaton
> I grew up in Appalachia (pronounced "app-uh-lai-cha" by us)

Isn’t that the usual pronunciation of it? How else do people pronounce it?

~~~
thrower123
App-ah-lay-shia, as I've always heard it up on the far northern end.

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DenisM
Does anyone see the student debt as a positive thing? Curious.

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jimbokun
Bankers.

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anonymousDan
Or you could, you know, get the _government_ to pay for it, through _taxes_.

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jeffbax
The last thing US education needs is further tuition inflation because now the
government going to pay for everyone's $60k/year liberal arts degree.

I think there's a place for government-funded higher-ed, but it has to be for
schools that can keep costs under control (most likely state and community
schools) as opposed to what seems to be a cry for unlimited education spending
everywhere that will only accelerate ballooning costs.

We should commend the private efforts like Berea does. That is a much better
model than putting the cost burden on everyone.

~~~
tareqak
I think we can commend private efforts like Berea, but also hold the
government accountable in its spending. Tax collection and government spending
are two different things: mismanagement of tax revenue only related to tax
collection in that the latter allows for the former in that there becomes
something to mismanage. If we want to stop collection because of
mismanagement, then the government shouldn't have bailed out the banks in
2008. If you don't want to pay for someone else's liberal arts degrees, then
you petition ask the government to only sponsor scholarships and grants for
careers that are in demand / the state or nation as a whole lacks.

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jimbokun
The wealthy today are continually looking for ways to destroy civilization and
actively leave behind a worse legacy for humanity. At least in the US.

Pour billions into educational endowments, then on top of that charge students
enough to make them indentured slaves for decades.

Pour money into hospitals, then manipulate the politics around the health
insurance industry to ensure people are financially ruined when they get sick.

Where are the Carnegies, leaving behind libraries free to all, or parks open
to everyone? Carnegie was an ass to his employees when he was building his
fortune, but at least then he saw some obligation to leave something behind to
improve society.

The powerful and wealthy today, as a whole, seem to have lost all interest in
moving society forward.

