Low alumni giving negatively impacts our endowment. The university’s $1.3 billion endowment, which includes alumni giving, commercial properties, and financial investments, is far smaller than universities it considers its peers. In 2012, poor market conditions decreased the endowment by $25 million. Alumni giving specifically dropped by 14 percent last year, an important statistic as the university fundraises for the $275 million Science and Engineering Hall and a $400 million strategic plan. These challenges have forced GW to disproportionately rely on tuition increases to fuel additional university spending increases.
1) High student debt: GW students graduate with higher than average debt burdens. The average GW student’s debt burden is $33,398, which is higher than the average at other American private universities, where students graduate with an $27,650 of debt on average. Especially in a tough job market, former students may find themselves with little left to give back.
2) Frustration with tuition increases: The University’s sticker price has increased 3% every year for the past six years, and students may feel that they have already given enough money to the school.
3) Perceptions that university spending priorities are misplaced: Many recent graduates feel that there is not enough financial transparency and engagement with students about the future of finances at GW. Frustration is possible, especially when funds for large construction projects could be best spent elsewhere.
Why is this a problem? Because in order to avoid future tuition increases, boost our financial aid pool, and invest in important academic programs, we need to grow our endowment. All stakeholders--university officials, current students, and alumni--agree that this is a major issue.
Our school’s financing system does have its benefits. GW is one of the few schools in the country that guarantees fixed tuition and the same amount of merit aid for five years. This policy was established in 2004 by the Board of Trustees, in response to national backlash to the pricey cost of a GW education.
While fixed tuition is an important way to give students and parents financial confidence, continued tuition increases have not stopped. GW is a tuition dependent school. 62% of revenue came from tuition in the University’s last fiscal year, and among all of GW’s 14 peer schools, GW’s percentage of tuition dependence is a stark second-highest. This high-tuition, high-discount model is unsustainable, as eventually the price will reach a threshold that will keep students from attending. Our endowment matters.
Clearly lackluster alumni giving presents a problem that needs to be tackled. Although GW is an excellent institution of higher learning, high debt burdens, inflating costs, and widespread sentiment that school spending choices are not often in student best interests, might cause many to put off donating back to their alma mater. To achieve the “season of giving” that our institution needs, university leaders should understand that current and future alumni may be holding back for important reasons.
Current GW students, weigh in with your opinions on this issue:
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