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Cooper Union Ends a Longtime Custom: The Free Degree

93 points by joe8756438 14y ago

bkanber 14y ago
It's a sad day for education. I'm a Cooper alum and have been following this fiasco for quite some time. Feel free to ask me any questions you may have and I'll do my best to answer them.
- brudgers 14y ago
  My grandfather was a first generation American. He was able to attend college by earning admission to The Cooper Union. Tuition would have kept him out.
- luke_s 14y ago
  So, its this really caused by them borrowing $170m to play the stock market? What were they thinking?! Also: What happened with the failed fundraising drive? I would have thought such an exclusive school would have had many well off graduates, who would be happy to help out their old school in its hour of need.
  - bkanber 14y ago
    Not quite. The media saying that the loan was for playing with the stock market is erroneous. The $175M loan was to build a new building in the east village. However, when the building was complete, some geniuses decided that the leftover money would be better spent in the stock market rather than using it towards paying back MetLife. They did calculations and saw that the gains from new investments would outpace losses from the additional interest. It was a hedge, basically. But then the recession hit, and naturally that investment failed, leaving Cooper both without gains from the investment AND with extra debt burden.
kingkawn 14y ago
This really feels like a smaller version of the American story. Corporate boards make large investment gambles, stock market tumbles, the regular people end up paying when it all goes south. Nobody on Cooper's board has been asked to step-down for the decisions that led to this crisis.
- bkanber 14y ago
  We alumni have actually asked basically the entire board and the Cooper president to step down. (Edit: though I don't believe we've made an official petition yet. I'm sure that'll happen soon.)
  - Crake 14y ago
    Good.
  - kingkawn 14y ago
    glad to hear it, they are so incomprehensibly bad it is hard to put into words. They took a beautiful thing and ruined it for what I do not see. A new building? Higher profit margins? A desire to keep-up with the aspirations of the other corporate boards they are on?
SoftwareMaven 14y ago
One of the biggest problems in higher ed shows its face here: increased administration costs[1]. It is ridiculous how bureaucracy has insinuated itself so thoroughly and, as a result, has driven so many costs up, especially during a time when people should be getting more productive thanks to technology. 1. http://www.bloomberg.com/news/2012-11-14/bureaucrats-paid-250-000-feed-outcry-over-college-costs.html http://www.bloomberg.com/news/2012-11-14/bureaucrats-paid-25...
- HarryHirsch 14y ago
  The chief problem besetting universities in the US is administrative bloat, administrative bloat and reduced NIH funding lines. The two problems besetting universities are bloat, reduced NIH funding, and a collapsed endowment due to the funding crisis. And reduced state funding. Amongst the problems besetting universities are bloat, reduced NIH funding, and a collapsed endowment due to the funding crisis, reduced state funding, and reduced alumni donations. Says Cardinal Ximenez. Pinning the very real problems facing colleges and universities on one cause, top-heavy administration, and then insisting that it can be remedied somehow through technology is simplistic.
  - SoftwareMaven 14y ago
    I did not say it was the only problem, nor do I believe it is. I do think it may be the most critical one, but that is just an opinion with only data from having worked in the higher ed vertical once upon a time. The reason I think it is most critical is two-fold. First, extra administration just pulls money away from the actual teaching in salaries. But worse, the costs grow exponentially, as administrators ensure people know the "value they bring" or grow their "fiefdoms". The actions wind up creating additional costs and drag throughout the organization. Universities have seen a near doubling of non-teaching staff[1][2]. These people do not bring much value to students, instead, they focus on the university. But it's the students that pay their salaries. Now, a bigger question is how to fix it. The reading I've done on it lays much of the blame on the easy availability of student loans: they've allowed universities to jack up tuition prices well beyond the consumer index. Universities kept the teaching ratio about the same[1], so students get roughly the same education, while employing many other professionals and administrators with the extra money they could pull out of the system. Because they can continue raising tuition, they have a way to keep their staff through spending cuts from their funding sources. To fix the administration problem, you have to fix the student loan problem. Unfortunately, it's a catch 22. 1. http://www.washingtonmonthly.com/magazine/septemberoctober_2011/features/administrators_ate_my_tuition031641.php http://www.washingtonmonthly.com/magazine/septemberoctober_2... 2. http://www.economist.com/news/united-states/21567373-american-universities-represent-declining-value-money-their-students-not-what-it http://www.economist.com/news/united-states/21567373-america...
tokenadult 14y ago
What is the level of alumni donation like at Cooper Union? I would think a free education in architecture or engineering (I can't say the same about a free education in art) ought to have some real economic value, and allow some alumni to pay it forward to keep alma mater financially sound. http://www.collegeresults.org/search1b.aspx?institutionid=190372 http://www.collegeresults.org/search1b.aspx?institutionid=19...
- brudgers 14y ago
  Apparently, you are unfamiliar with the economics of architectural practice. Six figure salaries are for senior licensed staff. The typical age these days for completing licensure requirements is about 33 based on the few states which have made such data available...and new graduates, well New York City has a long tradition of unpaid internships ( graduates are interns in the licensure process). In the heady days of the boom, an intern from a top school at a big firm might make 60k - for 70 hours a week and holding a degree which takes at least five years to complete. To put it in perspective, Frank Gehry was unknown until his mid-forties, and only came to the national spotlight for work he did on his own house. How many programmers do you know who are still running a company in their 80's? Edit: Mathew Arnold did the study which extracted the age at which licensure is achieved. It is presented here: http://www.di.net/blog/tag/ncarb/ http://www.di.net/blog/tag/ncarb/ Matt is a Cooper Union Alum. I played a minor role in the data collection phase - I egged him on.
  - mturmon 14y ago
    All that. And, if you're at a small firm, you're often chasing small commissions with cheapskate clients who use all kinds of methods to stiff and delay payments. It's tough to build a good portfolio that way. (Like lots of design work in that regard.) Add in the cyclical nature of the construction trade, and it's a rough business.
- bane 14y ago
  Architecture is currently oversupplied with architects. The salaries are not that great, especially for starting (it runs under $50k and more likely in the low 40s). sources http://www.ehow.com/info_8019468_average-starting-architect-salary.html http://www.ehow.com/info_8019468_average-starting-architect-... http://stats.bls.gov/oes/current/oes171011.htm http://stats.bls.gov/oes/current/oes171011.htm (a few architecture boards I frequent, for the cool pictures, are full of endless complaining about the lack of jobs and the poor pay for starting architects) http://www.jobshadow.com/interview-with-a-general-architectfirm-owner/ http://www.jobshadow.com/interview-with-a-general-architectf... Starting salary right now is probably $32,000 to $33,000. Then, licensed architects, usually licensed architects are making around $50,000. It varies between all of their capabilities .
HarryHirsch 14y ago
According to Cooper Union’s president, Jamshed Bharucha, it currently operates at a $12 million annual deficit. The number reflects several factors: ... most significantly, $10 million a year in payments on a $175 million loan the school took out a few years ago, in part so that it could invest money in the stock market. And this, ladies and gentlemen, is why meaningful bank regulation is long overdue. The signs of the present crisis were there to see for anyone with eyes in 2005: in that year my ex-landlady, who was from Bushwick, one of the poorest parts in New York, bought five rental properties with no-money-down loans. Let's have this again: Bank of America found nowhere better to invest than in this clueless lady that perceptibly could not run her rental empire successfully, and they loaned her the funds anyway.
- eru 14y ago
  And the problem is not so much that the bank made a mistake, but that those mistakes affect the rest of the world so much. If a normal company makes a bunch of mistakes, they go bankrupt, and competition takes over.
  - MaysonL 14y ago
    The problem was that, for the guy making the loan, and his superiors all the way up, this was not a mistake, but rather the whole foundation of their bonuses. The loan was almost certainly at a higher than normal interest rate, and thus when bundled with other such loans, could be sold at a substantally higher price, thus generating higher profits. This, even though everyone making these loans knew (or should have known) that there was no way they were going to be repaid. The trouble was that the bank regulators, unlike those in the 80's during the savings and loan crisis, let this go on unchecked, and have not prosecuted anyone for the massive frauds that took place. Note, of course, that the profits booked for such loans, were temporary and delusional. The bonuses paid, however, were real, and permanent - never clawed back.
    - speeder 14y ago
      I believe that if actually bank were left to run unchecked, specially having no help from government, more of them would fail... Yes, it would be quite painful in short term, but long term that sort of crap would stop. The regulation that exist right now, and that people keep trying to expand, has the end result that ties the government too tighly with banks, and bailouts and other help from government become a necessity.
D_Alex 14y ago
>...it currently operates at a $12 million annual deficit. The number reflects several factors ... most significantly, $10 million a year in payments on a $175 million loan the school took out a few years ago, in part so that it could invest money in the stock market. In case you were wondering what is the real cause of this event, 85% of the problem is due to an ill advised stock market gamble. Which brings me to my hobby horse; why are stockbrokers, financial advisors and investment bankers able to collect such huge pay? Y'all should stop feeding these leeches.
- bradleyjg 14y ago
  I hope the entire board that approved the gambling scheme has been removed. If not the state attorney general, who is responsible for supervising non-profit boards, should open an investigation.
  - MichaelApproved 14y ago
    Why not kick out the board and open an investigation?
  - rdouble 14y ago
    I'm not sure what precedent there would be for either of those actions. All of the major universities "gamble" with their endowments in the various markets. There's the corny adage that Harvard is a hedge fund with a university attached.
    - bradleyjg 14y ago
      It's one thing to gamble with an endowment, that can be couched as investment, and another to borrow money to gamble with and endanger the operational budget of the non-profit you are overseeing. That may well violate the fiduciary duty of prudence under the New York Prudent Management of Institutional Funds Act.
      - rdouble 14y ago
danielamitay 14y ago
I understand the financial mistakes (underperforming investments). I understand the building mistakes (extravagance, over-spending). What I don't understand is this policy that will (in my opinion) destroy The Cooper Union's core asset: the student body. Having attended, I whole-heartedly believe that nearly all of Cooper Union's value-add is in being surrounded by incredibly intelligent peers. Peers who are now less likely to apply or attend. Me: Spent two years at Cooper, currently graduating from NYU.
- Crake 14y ago
  Why did you transfer? Just curious.
  - danielamitay 14y ago
    Basically, I derive a significant amount of esteem and happiness from making things that people use. It was this that lead myself and those around me to believe I should pursue Engineering. Unfortunately, I derived very little to no esteem from what I felt was merely "book learning" at Cooper. The school system I grew up in was extremely liberal and forward-thinking, so Cooper Union felt extremely rigid to me (although I acknowledge the possibility that all Engineering programs are like this). I simply couldn't survive four years like that. Ultimately, I studied Economics at NYU, so I moved away from Engineering to allow myself to pursue development on my own. There are other reasons why I moved to Economics, but thats the gist of it.
    - bkanber 14y ago
      I'm a Cooper grad -- the first two years are book learning, the second two were hands on. I built lots of fun stuff; interactive art projects with the art school, lots of robots, and even a race car for my senior thesis.
      - Crake 14y ago
        Race cars sound quite exciting.
brianbreslin 14y ago
I had never heard of cooper union before, but am curious, did they have a huge endowment to fund the school for so long? The article states they own land under the chrysler building, and the founder endowed them with the buildings and land 100+ years ago. However for ongoing expenses (staff, upkeep, etc), how were they funding this prior?
- rdouble 14y ago
  They just have one building, small staff and student body, and don't have to pay taxes. The main expense is salaries.
  - brianbreslin 14y ago
    Yeah but with no tuition how do they even pay that?
    - rdouble 14y ago
      They have (had?) a $600 million dollar endowment. I also looked it up on wikipedia, and it looks like the endowment also owns the land underneath the Chrysler Building. A substantial portion of the annual budget, which supports the full-tuition scholarships in addition to the school's costs, is generated through donations from alumni in both the public and the private sector. In addition, real estate has become a very important asset to the College and has drastically increased its endowment to over $600 million.[43] The land under the Chrysler Building is owned by the endowment,[44] and as of 2009, Cooper Union received $7 million per year from this parcel. Further, under a very unusual arrangement, New York City real-estate taxes assessed against the Chrysler lease, held by Tishman Speyer, are paid to Cooper Union, not the city. This arrangement would be voided if Cooper Union sold the real estate. In 2006, Tishman Speyer signed a deal with the school to pay rent that will escalate to $32.5 million in 2018, $41 million in 2028 and $55 million in 2038. Cooper Union investment committee member John Michaelson acknowledged to the Wall Street Journal that Tishman Speyer "would not have signed a generous agreement like that had it been approached in 2009."
kkwok 14y ago
When your expenses are greater than your revenue, increasing your risk exposure is not a real solution...
cinquemb 14y ago
Hardly the first university to step up to the chopping block faced with growing expenses y/y. FRBNY website has some nice chart porn for those looking for more insight into the student loan debt bubble thats in full upswing :D
loucal 14y ago
from free to 40 grand a year...
- ics 14y ago
  To be fair, every semester we were given a bill for the total cost with tuition "discounted", so it usually looked something like: Subtotal: $37,000 Amount Due: $1400 (student fee) I thought they were just making passive hints until the new president came in and had to tell us all the bad news...
SeoxyS 14y ago
The part that I find the most repulsive about this – aside from the fact that the school got itself into debt by borrowing money to gamble it, and then lost it – is that its board of trustees went from a visionary model of free tuition, and against the advice of the professionals it hired to analyse the decision, opted, on purpose, for a sliding scale. Schooling in america is not fucked up because it charges tuition; that's fine. It's fucked up because it charges tuition so unequally. Often, half the student body does not pay a dime, while the other half gets itself in massive debt because of bureaucratic technicalities. In my case, I paid full $50k/yr tuition, by myself, because not being a US citizen made me ineligible for all scholarships, whereas many of my peers got a free ride even though their families were much wealthier than mine. All around me, and throughout the academic culture of the united states, I see this. Students struggle to battle for the few scholarships schools offer subsidized by the financial hardships of other students. We'd all be much better off if we abolished all scholarships and dropped tuition to a price much more reasonable for everybody. School ought to cost 5-10k a year, not 50. And everybody should pay it, or take out a loan for it, because at that price, it's a no-brainer.
- argonaut 14y ago
  To be fair, I've examined the way college admissions works in the US, and by and large those who get financial aid actually need it, and those who are charged full freight tend to actually be able to pay full freight. Secondly, in the case of private institutions, they are private institutions and are largely free to spend their endowment as they wish. Most thus choose not to give financial aid to internationals, but some do give aid.
  - deleted 14y ago
    [deleted]
  - Crake 14y ago
    Well, and then you have people like me who had to wait 6 years to become eligible for enough aid to even pay tuition, much less pay for food or rent. (I applied for about 40 scholarships when I was 18, so it's not like I didn't try or anything.) I wasn't out to study Chicano Lit or whatever, either; I'm an EE+physics major. Meanwhile, many of my friends who studied liberal arts with thousands of dollars of financial assistance from the state and federal government continue to work the same level of job they held in high school.
noonespecial 14y ago
Note to self: If I ever find myself a billionaire industrialist and I want to start a tuition free school, bake into the rules for operation that any administration that decides to charge a tuition anyway becomes immediately fired along with all administrative positions at that time. If they really feel its best for the institution, let them prove it with unemployment.
- bkanber 14y ago
  Well, that's exactly what Peter Cooper did. Education being "as free as air and water" is even in Cooper Union's charter. With that being said, that's exactly what I would do too.
ianb 14y ago
This article has a less forgiving take on the finances: http://blogs.reuters.com/felix-salmon/2012/04/25/why-cooper-union-cant-be-trusted/ http://blogs.reuters.com/felix-salmon/2012/04/25/why-cooper-... And this fairly extensive piece goes into it as well: http://nplusonemag.com/save-cooper-union http://nplusonemag.com/save-cooper-union It seems like administration and trustees have been treating Cooper Union with the standard expansionary approach that is the norm for universities – spending money to make money, extravagant capital projects, overpaying and overstaffing administration. Disappointing. There are few institutions left for those that value frugality.
scotty79 14y ago
They borrowed money to gamble with it on the stock market? And now they are going to drain their userbase to cover for their gambling debts and their overblown salaries? That's not an institution I'd like to attend to.
- bkanber 14y ago
  Not quite. They borrowed money to build a building, but used the leftover cash to invest in the stock market. They calculated that capital gains would outpace the additional debt interest. But then the recession hit, and they basically lost that money.
petercooper 14y ago
Oh, my poor institution! :-(

93 points by joe8756438 14y ago

It's a sad day for education. I'm a Cooper alum and have been following this fiasco for quite some time. Feel free to ask me any questions you may have and I'll do my best to answer them.

brudgers 14y ago
My grandfather was a first generation American. He was able to attend college by earning admission to The Cooper Union. Tuition would have kept him out.
luke_s 14y ago
So, its this really caused by them borrowing $170m to play the stock market? What were they thinking?! Also: What happened with the failed fundraising drive? I would have thought such an exclusive school would have had many well off graduates, who would be happy to help out their old school in its hour of need.
- bkanber 14y ago
  Not quite. The media saying that the loan was for playing with the stock market is erroneous. The $175M loan was to build a new building in the east village. However, when the building was complete, some geniuses decided that the leftover money would be better spent in the stock market rather than using it towards paying back MetLife. They did calculations and saw that the gains from new investments would outpace losses from the additional interest. It was a hedge, basically. But then the recession hit, and naturally that investment failed, leaving Cooper both without gains from the investment AND with extra debt burden.

kingkawn 14y ago

This really feels like a smaller version of the American story. Corporate boards make large investment gambles, stock market tumbles, the regular people end up paying when it all goes south. Nobody on Cooper's board has been asked to step-down for the decisions that led to this crisis.

bkanber 14y ago
We alumni have actually asked basically the entire board and the Cooper president to step down. (Edit: though I don't believe we've made an official petition yet. I'm sure that'll happen soon.)
- Crake 14y ago
  Good.
- kingkawn 14y ago
  glad to hear it, they are so incomprehensibly bad it is hard to put into words. They took a beautiful thing and ruined it for what I do not see. A new building? Higher profit margins? A desire to keep-up with the aspirations of the other corporate boards they are on?

SoftwareMaven 14y ago

One of the biggest problems in higher ed shows its face here: increased administration costs[1]. It is ridiculous how bureaucracy has insinuated itself so thoroughly and, as a result, has driven so many costs up, especially during a time when people should be getting more productive thanks to technology. 1. http://www.bloomberg.com/news/2012-11-14/bureaucrats-paid-250-000-feed-outcry-over-college-costs.html http://www.bloomberg.com/news/2012-11-14/bureaucrats-paid-25...

HarryHirsch 14y ago
The chief problem besetting universities in the US is administrative bloat, administrative bloat and reduced NIH funding lines. The two problems besetting universities are bloat, reduced NIH funding, and a collapsed endowment due to the funding crisis. And reduced state funding. Amongst the problems besetting universities are bloat, reduced NIH funding, and a collapsed endowment due to the funding crisis, reduced state funding, and reduced alumni donations. Says Cardinal Ximenez. Pinning the very real problems facing colleges and universities on one cause, top-heavy administration, and then insisting that it can be remedied somehow through technology is simplistic.
- SoftwareMaven 14y ago
  I did not say it was the only problem, nor do I believe it is. I do think it may be the most critical one, but that is just an opinion with only data from having worked in the higher ed vertical once upon a time. The reason I think it is most critical is two-fold. First, extra administration just pulls money away from the actual teaching in salaries. But worse, the costs grow exponentially, as administrators ensure people know the "value they bring" or grow their "fiefdoms". The actions wind up creating additional costs and drag throughout the organization. Universities have seen a near doubling of non-teaching staff[1][2]. These people do not bring much value to students, instead, they focus on the university. But it's the students that pay their salaries. Now, a bigger question is how to fix it. The reading I've done on it lays much of the blame on the easy availability of student loans: they've allowed universities to jack up tuition prices well beyond the consumer index. Universities kept the teaching ratio about the same[1], so students get roughly the same education, while employing many other professionals and administrators with the extra money they could pull out of the system. Because they can continue raising tuition, they have a way to keep their staff through spending cuts from their funding sources. To fix the administration problem, you have to fix the student loan problem. Unfortunately, it's a catch 22. 1. http://www.washingtonmonthly.com/magazine/septemberoctober_2011/features/administrators_ate_my_tuition031641.php http://www.washingtonmonthly.com/magazine/septemberoctober_2... 2. http://www.economist.com/news/united-states/21567373-american-universities-represent-declining-value-money-their-students-not-what-it http://www.economist.com/news/united-states/21567373-america...

tokenadult 14y ago

What is the level of alumni donation like at Cooper Union? I would think a free education in architecture or engineering (I can't say the same about a free education in art) ought to have some real economic value, and allow some alumni to pay it forward to keep alma mater financially sound. http://www.collegeresults.org/search1b.aspx?institutionid=190372 http://www.collegeresults.org/search1b.aspx?institutionid=19...

brudgers 14y ago
Apparently, you are unfamiliar with the economics of architectural practice. Six figure salaries are for senior licensed staff. The typical age these days for completing licensure requirements is about 33 based on the few states which have made such data available...and new graduates, well New York City has a long tradition of unpaid internships ( graduates are interns in the licensure process). In the heady days of the boom, an intern from a top school at a big firm might make 60k - for 70 hours a week and holding a degree which takes at least five years to complete. To put it in perspective, Frank Gehry was unknown until his mid-forties, and only came to the national spotlight for work he did on his own house. How many programmers do you know who are still running a company in their 80's? Edit: Mathew Arnold did the study which extracted the age at which licensure is achieved. It is presented here: http://www.di.net/blog/tag/ncarb/ http://www.di.net/blog/tag/ncarb/ Matt is a Cooper Union Alum. I played a minor role in the data collection phase - I egged him on.
- mturmon 14y ago
  All that. And, if you're at a small firm, you're often chasing small commissions with cheapskate clients who use all kinds of methods to stiff and delay payments. It's tough to build a good portfolio that way. (Like lots of design work in that regard.) Add in the cyclical nature of the construction trade, and it's a rough business.
bane 14y ago
Architecture is currently oversupplied with architects. The salaries are not that great, especially for starting (it runs under $50k and more likely in the low 40s). sources http://www.ehow.com/info_8019468_average-starting-architect-salary.html http://www.ehow.com/info_8019468_average-starting-architect-... http://stats.bls.gov/oes/current/oes171011.htm http://stats.bls.gov/oes/current/oes171011.htm (a few architecture boards I frequent, for the cool pictures, are full of endless complaining about the lack of jobs and the poor pay for starting architects) http://www.jobshadow.com/interview-with-a-general-architectfirm-owner/ http://www.jobshadow.com/interview-with-a-general-architectf... Starting salary right now is probably $32,000 to $33,000. Then, licensed architects, usually licensed architects are making around $50,000. It varies between all of their capabilities .

HarryHirsch 14y ago

According to Cooper Union’s president, Jamshed Bharucha, it currently operates at a $12 million annual deficit. The number reflects several factors: ... most significantly, $10 million a year in payments on a $175 million loan the school took out a few years ago, in part so that it could invest money in the stock market. And this, ladies and gentlemen, is why meaningful bank regulation is long overdue. The signs of the present crisis were there to see for anyone with eyes in 2005: in that year my ex-landlady, who was from Bushwick, one of the poorest parts in New York, bought five rental properties with no-money-down loans. Let's have this again: Bank of America found nowhere better to invest than in this clueless lady that perceptibly could not run her rental empire successfully, and they loaned her the funds anyway.

eru 14y ago
And the problem is not so much that the bank made a mistake, but that those mistakes affect the rest of the world so much. If a normal company makes a bunch of mistakes, they go bankrupt, and competition takes over.
- MaysonL 14y ago
  The problem was that, for the guy making the loan, and his superiors all the way up, this was not a mistake, but rather the whole foundation of their bonuses. The loan was almost certainly at a higher than normal interest rate, and thus when bundled with other such loans, could be sold at a substantally higher price, thus generating higher profits. This, even though everyone making these loans knew (or should have known) that there was no way they were going to be repaid. The trouble was that the bank regulators, unlike those in the 80's during the savings and loan crisis, let this go on unchecked, and have not prosecuted anyone for the massive frauds that took place. Note, of course, that the profits booked for such loans, were temporary and delusional. The bonuses paid, however, were real, and permanent - never clawed back.
  - speeder 14y ago
    I believe that if actually bank were left to run unchecked, specially having no help from government, more of them would fail... Yes, it would be quite painful in short term, but long term that sort of crap would stop. The regulation that exist right now, and that people keep trying to expand, has the end result that ties the government too tighly with banks, and bailouts and other help from government become a necessity.

D_Alex 14y ago

>...it currently operates at a $12 million annual deficit. The number reflects several factors ... most significantly, $10 million a year in payments on a $175 million loan the school took out a few years ago, in part so that it could invest money in the stock market. In case you were wondering what is the real cause of this event, 85% of the problem is due to an ill advised stock market gamble. Which brings me to my hobby horse; why are stockbrokers, financial advisors and investment bankers able to collect such huge pay? Y'all should stop feeding these leeches.

bradleyjg 14y ago
I hope the entire board that approved the gambling scheme has been removed. If not the state attorney general, who is responsible for supervising non-profit boards, should open an investigation.
- MichaelApproved 14y ago
  Why not kick out the board and open an investigation?
- rdouble 14y ago
  I'm not sure what precedent there would be for either of those actions. All of the major universities "gamble" with their endowments in the various markets. There's the corny adage that Harvard is a hedge fund with a university attached.
  - bradleyjg 14y ago
    It's one thing to gamble with an endowment, that can be couched as investment, and another to borrow money to gamble with and endanger the operational budget of the non-profit you are overseeing. That may well violate the fiduciary duty of prudence under the New York Prudent Management of Institutional Funds Act.
    - rdouble 14y ago

danielamitay 14y ago

I understand the financial mistakes (underperforming investments). I understand the building mistakes (extravagance, over-spending). What I don't understand is this policy that will (in my opinion) destroy The Cooper Union's core asset: the student body. Having attended, I whole-heartedly believe that nearly all of Cooper Union's value-add is in being surrounded by incredibly intelligent peers. Peers who are now less likely to apply or attend. Me: Spent two years at Cooper, currently graduating from NYU.

Crake 14y ago
Why did you transfer? Just curious.
- danielamitay 14y ago
  Basically, I derive a significant amount of esteem and happiness from making things that people use. It was this that lead myself and those around me to believe I should pursue Engineering. Unfortunately, I derived very little to no esteem from what I felt was merely "book learning" at Cooper. The school system I grew up in was extremely liberal and forward-thinking, so Cooper Union felt extremely rigid to me (although I acknowledge the possibility that all Engineering programs are like this). I simply couldn't survive four years like that. Ultimately, I studied Economics at NYU, so I moved away from Engineering to allow myself to pursue development on my own. There are other reasons why I moved to Economics, but thats the gist of it.
  - bkanber 14y ago
    I'm a Cooper grad -- the first two years are book learning, the second two were hands on. I built lots of fun stuff; interactive art projects with the art school, lots of robots, and even a race car for my senior thesis.
    - Crake 14y ago
      Race cars sound quite exciting.

brianbreslin 14y ago

I had never heard of cooper union before, but am curious, did they have a huge endowment to fund the school for so long? The article states they own land under the chrysler building, and the founder endowed them with the buildings and land 100+ years ago. However for ongoing expenses (staff, upkeep, etc), how were they funding this prior?

rdouble 14y ago
They just have one building, small staff and student body, and don't have to pay taxes. The main expense is salaries.
- brianbreslin 14y ago
  Yeah but with no tuition how do they even pay that?
  - rdouble 14y ago
    They have (had?) a $600 million dollar endowment. I also looked it up on wikipedia, and it looks like the endowment also owns the land underneath the Chrysler Building. A substantial portion of the annual budget, which supports the full-tuition scholarships in addition to the school's costs, is generated through donations from alumni in both the public and the private sector. In addition, real estate has become a very important asset to the College and has drastically increased its endowment to over $600 million.[43] The land under the Chrysler Building is owned by the endowment,[44] and as of 2009, Cooper Union received $7 million per year from this parcel. Further, under a very unusual arrangement, New York City real-estate taxes assessed against the Chrysler lease, held by Tishman Speyer, are paid to Cooper Union, not the city. This arrangement would be voided if Cooper Union sold the real estate. In 2006, Tishman Speyer signed a deal with the school to pay rent that will escalate to $32.5 million in 2018, $41 million in 2028 and $55 million in 2038. Cooper Union investment committee member John Michaelson acknowledged to the Wall Street Journal that Tishman Speyer "would not have signed a generous agreement like that had it been approached in 2009."

kkwok 14y ago

When your expenses are greater than your revenue, increasing your risk exposure is not a real solution...

cinquemb 14y ago

Hardly the first university to step up to the chopping block faced with growing expenses y/y. FRBNY website has some nice chart porn for those looking for more insight into the student loan debt bubble thats in full upswing :D

loucal 14y ago

from free to 40 grand a year...

ics 14y ago
To be fair, every semester we were given a bill for the total cost with tuition "discounted", so it usually looked something like: Subtotal: $37,000 Amount Due: $1400 (student fee) I thought they were just making passive hints until the new president came in and had to tell us all the bad news...

SeoxyS 14y ago

The part that I find the most repulsive about this – aside from the fact that the school got itself into debt by borrowing money to gamble it, and then lost it – is that its board of trustees went from a visionary model of free tuition, and against the advice of the professionals it hired to analyse the decision, opted, on purpose, for a sliding scale. Schooling in america is not fucked up because it charges tuition; that's fine. It's fucked up because it charges tuition so unequally. Often, half the student body does not pay a dime, while the other half gets itself in massive debt because of bureaucratic technicalities. In my case, I paid full $50k/yr tuition, by myself, because not being a US citizen made me ineligible for all scholarships, whereas many of my peers got a free ride even though their families were much wealthier than mine. All around me, and throughout the academic culture of the united states, I see this. Students struggle to battle for the few scholarships schools offer subsidized by the financial hardships of other students. We'd all be much better off if we abolished all scholarships and dropped tuition to a price much more reasonable for everybody. School ought to cost 5-10k a year, not 50. And everybody should pay it, or take out a loan for it, because at that price, it's a no-brainer.

argonaut 14y ago
To be fair, I've examined the way college admissions works in the US, and by and large those who get financial aid actually need it, and those who are charged full freight tend to actually be able to pay full freight. Secondly, in the case of private institutions, they are private institutions and are largely free to spend their endowment as they wish. Most thus choose not to give financial aid to internationals, but some do give aid.
- deleted 14y ago
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- Crake 14y ago
  Well, and then you have people like me who had to wait 6 years to become eligible for enough aid to even pay tuition, much less pay for food or rent. (I applied for about 40 scholarships when I was 18, so it's not like I didn't try or anything.) I wasn't out to study Chicano Lit or whatever, either; I'm an EE+physics major. Meanwhile, many of my friends who studied liberal arts with thousands of dollars of financial assistance from the state and federal government continue to work the same level of job they held in high school.

noonespecial 14y ago

Note to self: If I ever find myself a billionaire industrialist and I want to start a tuition free school, bake into the rules for operation that any administration that decides to charge a tuition anyway becomes immediately fired along with all administrative positions at that time. If they really feel its best for the institution, let them prove it with unemployment.

bkanber 14y ago
Well, that's exactly what Peter Cooper did. Education being "as free as air and water" is even in Cooper Union's charter. With that being said, that's exactly what I would do too.

ianb 14y ago

This article has a less forgiving take on the finances: http://blogs.reuters.com/felix-salmon/2012/04/25/why-cooper-union-cant-be-trusted/ http://blogs.reuters.com/felix-salmon/2012/04/25/why-cooper-... And this fairly extensive piece goes into it as well: http://nplusonemag.com/save-cooper-union http://nplusonemag.com/save-cooper-union It seems like administration and trustees have been treating Cooper Union with the standard expansionary approach that is the norm for universities – spending money to make money, extravagant capital projects, overpaying and overstaffing administration. Disappointing. There are few institutions left for those that value frugality.

scotty79 14y ago

They borrowed money to gamble with it on the stock market? And now they are going to drain their userbase to cover for their gambling debts and their overblown salaries? That's not an institution I'd like to attend to.

bkanber 14y ago
Not quite. They borrowed money to build a building, but used the leftover cash to invest in the stock market. They calculated that capital gains would outpace the additional debt interest. But then the recession hit, and they basically lost that money.

petercooper 14y ago

Oh, my poor institution! :-(