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What happens when the 120M runs out? Are they putting the alumni permanently on the hook to pay for future incoming students who need financial assistance? Th
by at-fates-hands 9y ago
What happens when the 120M runs out?
Are they putting the alumni permanently on the hook to pay for future incoming students who need financial assistance?
The article doesn't address this issue.
- mac01021 9y agoI think the purpose of the 120M is to create an endowment from which ~5% can be taken to provide financial aid every year. If their investments perform as hoped, it should last quite some time.
- junkscience2017 9y agosix million dollars a year, of which some is gobbled up by fees. Brown has 6500 undergrads...at their current full tuition just the incoming class exceeds that
- chimeracoder 9y ago> Brown has 6500 undergrads...at their current full tuition just the incoming class exceeds that Well, then they should be able to afford this easily with the size of the fund, because they're not going to be covering 100% of the tuition for 100% of the students. They're just (aiming to) eliminate the portion that would be covered by loans.
- readhn 9y agoWhat happens when bull market eventually runs out of steam? No more free tuition?
- skuhn 9y agoYes. University endowments are all tied up in investments. This is necessary in order to grow the endowments and make them "permanent", since you need to replace what you spend with the interest you accumulate. However, it also introduces risk from unwise or unlucky investments. If there is a substantial market correction, and the investments of Brown's endowment are substantially impacted, programs like this will be scaled back or eliminated. Brown will probably be unable to spend the money raised for this purpose on anything else though.
- readhn 9y agoSo in a theoretical case of a major recession this fund that exists to help pay for education wouldn't be available - at the time when it would be most needed for families. This is upside down.