This may come as a surprise to those who tend to hold diametric socio-political views than myself, but it’s pretty clear to me that the most fashionable young socialists that populate the college campus community are far closer to be anarchists than, say, someone like me. How can I say this? Well, a college campus is increasingly self-sufficient and separate from the community. Were it not, we would not have to see the efforts to improve “town-gown” relations like we do in so many places. Our campuses provide their own private security, have their own internal campus tribunals, have property that is exempt from taxation, conduct huge transactions that are exempt from taxation, are voluntary to enter and exit, are in hyper-aggressive competition with their peers, and more. Just think about the absolute disaster that is the “rape-culture” on campus. We are talking about horrific felonious behavior and we have a campus community that is wedded to the idea that these matters should be handled internally and not by the police. Call me a heretic, but I for one think it makes a hell of a lot more sense for any claims of rape to be brought immediately to the government authorities responsible for protecting and prosecuting us. But noooooo, not here on college campuses, these sons of anarchy need to handle rape allegations themselves (and no, I am not chiming in here about the rape culture – only to say that (1) I have never had the parent of a female student ask me anything about how safe their daughters were going to be here, and (2) if my son goes to college, I would be far more worried about him being prosecuted for something than I would my own daughter being assaulted while at college). We have our own alcohol policies on campus. Do you think that upon discovery of an underclassman with a beer or a bottle of booze that these kids are sent to the police? After all, underage drinking is clearly illegal? We have campus owned and operated private parking. When students park illegally do we refer them to the political authorities? Nope. And so it goes.
And given all of that, I would bet when surveyed that most students and administrators and parents find the college campus to be quite an orderly, safe, enjoyable and well-run place. And they are perhaps the most typical examples of anarchy we can get in a world where it’s hard to do anything outside the auspices of the state. Lest you disagree with that comment, please do go try to find a place in the United States and an institution within the United States that you can set up and be free from the direct control of existing state authorities. Certainly, owning your house free and clear doesn’t exempt you from property taxes and zoning restrictions and no matter what you do you are always going to have to be at the mercy of those – you cannot buy out your lifetime commitment to the state in that area or any other area. There’s too much to say here, but I wanted to point out another thing that made its way into my office yesterday.
Apparently the latest demand from the campus social justice victimization crowd is not only that the college “divest” from undesirable investments, but now the students themselves seem to want a say on how much financial aid is awarded, and I am pretty sure that by extension they have ideas as to who should be paying more and who paying less. I’m not at all interested in the issue itself, we’ve come to expect this kind of thing on a college campus, and no amount of talking about how a campus actually works would ever convince any of them of the potential folly of their ideas. It’s not about that for them anyway. In any case, their argument, as I am told (so I admit I may be wrong) is that the University has an endowment of over a BILLION dollars! A Billion!
They think this is large.
And they think this means that they should be required to “share” more of it with the undergraduates here.
Before we show you some fuzzy math that they seem to be doing, I’d like to offer up a solution. Just as this crowd of regularly outraged students seems to want to do with the “rich” and the “1%” I think that any large institution that has amassed such a fortune and which exerts such undue influence on their local and national political scenes ought to be diminished and neutralized. Think about how huge a role the U of R plays in local and state politics! It’s not fair to the regular citizens that they have billions of dollars and loads of famous scholars to wield influence while we meager middle classers have only a single vote with little income to sway outcomes into our favor. So where are the rallies demanding a huge wealth tax on the institution? After all, colleges definitely EVADE taxes and don’t do their duty at a clip that makes the tax inverters jealous! But no such calls are coming, I wonder why?
OK, onto the fuzzy math, and wholly ignoring that the U of R, in comparison to its peer institutions, is fantastically poor. According to the Chronicle, the U of R has an endowment of $1.7 billion. That sounds like a lot. But it’s not. Assume, for silliness sake, that the U of R just spends it down. If they spend $100 per year from that endowment, assuming no income growth, and stop adding to the endowment, that would last 20 years or so. How many students does the U of R enroll? Let’s assume we care only about undergraduates. According to the government (via IPEDS) we have about 6,600 full-time equivalent undergrads here. We could give a scholarship of about $15,000 per student for every student who attends over the next two decades, and then at the end, no one would get any aid from the endowment. Of course, this says nothing about how costs would grow over time here, as they surely will. Furthermore, I’d remind our math challenged outraged students that the total cost of attending at Rochester is WELL over $60,000 per student (I think it is closer to $80,000 per FTE here). Indeed, a good portion of the endowment payout to the students today comes in the form of a general subsidy that is available to all. Even that “outrageous” sticker price that is of concern to so many people is discounted from the “real” cost of college and it is discounted for every student.
Of course, we can’t really kill our endowment that way, so what colleges do is payout a portion of the endowment so that the payout is smoothed over good and bad return years (so, we pay out x% of the moving average of Y years of endowment value). I don’t know our rate here, but a 5% rate is quite high, richer schools would pay out less. So, if we pay out 5% of the endowment each year, then we pay out 85 million per year. Our university budget, sans the hospital, has to be about $1 billion per year. So this endowment payout, while seemingly huge, represents about 8% of the annual expenditures of the university. Not chump change, but also nothing to write home about. I am sure our students have done these calculations and understand the implications of them. I am sure of it.