Roughly 9 percent of the $511 billion spent in 2011 in the United States on higher education went to financing interest payments or to corporate profits, according to a new analysis from the Center for Culture, Organizations and Politics at the University of California at Berkeley. The American Federation of Teachers (AFT) commissioned the report, which found that $45 billion in higher education spending that year was for interest on individual student loan debt or on colleges' borrowing, or went to profits made by for-profit college companies.
The bulk of the $45 billion figure is attributable to student and institutional borrowing. Operating profits among for-profit colleges were roughly $4 billion in 2011, according to the report, and less than $1 billion in 2012 -- due to plunging enrollments in the sector. The student debt figure cited in the report refers to interest payments on both private and federal loans. The bulk of institutional borrowing was to fund "amenities" and construction projects, according to the study, such as for football stadiums.
For-profits got plenty of attention at a Wednesday AFT event to unveil the report. Rep. Mark Takano, a California Democrat, was there. He urged tighter regulation of the sector.
"This is an insane way to educate low-income students," said Takano. "We need strong gainful emploment rules."
Stanford University, which has the fourth-largest endowment of any American college, will stop directly investing in coal mining companies. The university announced its limited divestment plan Tuesday citing decades-old investment principles that tell Stanford’s trustees to make as much money as they can but also give trustees the option to avoid investing in companies that “create substantial social injury.” The burning of coal is considered a major contributor to global climate change.
Stanford’s trustees and an advisory panel concluded “coal is consistent with this policy given the current availability of alternatives to coal that have less harmful environmental impacts,” the university said.
Other universities, such as Harvard University, have resisted pressure to divest from fossil fuel stocks, citing their obligation to make money and what little effect their investment decisions might have. Stanford’s endowment of $18.6 billion in the 2013 budget year is just over half of Harvard’s. It’s not clear how much Stanford has invested in coal companies currently.
“Moving away from coal in the investment context is a small, but constructive, step while work continues, at Stanford and elsewhere, to develop broadly viable sustainable energy solutions for the future,” Stanford President John Hennessy said in a statement.
Stanford did not prevent itself from investing in other fossil fuel stocks, including oil and natural gas. The burning of both gas contributes, to varying degrees, in the greenhouse gas effect. Oil and natural gas stocks have risen substantially over the past several years at the same time coal stocks have plummeted. Stanford said the new policy applies to investments it manages directly but that it would also encourage its external money managers to divest from coal too.
Nearly three weeks after its planned merger with another institution fell through, Virginia Intermont College's president announced her resignation Monday. E. Clorisa Phillips said she was resigning for personal reasons. The college said last month that its merger with Webber International University had collapsed, and in accepting Phillips's resignation, Virginia Intermont's board said it was working with an interim president and "restructuring agent" to devise a solution for "some or all of the college."
The University of Notre Dame on Friday announced a $75 million gift -- the largest ever to the university -- from John W. Jordan, an alumnus and trustee. The money will be used for "the creation of a world-class research program in an area of science and technology that is new to Notre Dame and that has the potential to create innovative intellectual property that has important commercial potential."
The University of Scranton announced Wednesday that the institution is making "difficult" cuts of $4 million, due to rising costs and a smaller than expected freshman class for the current academic year, The Times-Tribune reported. The cuts involve some layoffs, but university officials declined to say how many.
South Carolina State University is running out of money, and lacks the funds to make payroll next month, The Times and Democrat reported. Officials said the university nearly was unable to make payroll this month, but was saved by a commission check from Sodexo, the dining services contractor, which nearly didn't get paid because the university owes Sodexo $2.3 million. The historically black university is appealing to the General Assembly for $13.6 million for current bills and those about to be faced by the institution.
Authorities arrested 18 students Wednesday who refused to leave the area of the president's office at the University of Texas at Austin, The Austin American-Statesman reported. The protest was over a "shared services" plan in which certain functions that have been performed at the departmental level will instead be centralized. The plan is expected to save a lot of money, and also to eliminate many jobs. The university released this summary of the plan and its rationale, noting that it has not been finalized.