Columbia wants the best and the brightest students. To keep up with top-ranked schools, it needs the richest too.

As COVID-19 continues to spread, the unemployment rate sits at nearly 15 percent, and experts doubt there will be a quick comeback from the pandemic-triggered recession. For many hoping to get back on their feet, pursuing a college degree will be a priority, and history shows that the times during which the economy is the poorest are associated with higher college enrollment rates.

A Spectator analysis of Harvard University’s Opportunity Insights data revealed that Columbia is better than 98 percent of colleges at sending students from the bottom 20 percent of the income distribution to the top 20 percent. In theory, Columbia is one of the strongest agents of social mobility in the country.

Even in 2008, amid the Great Recession, University President Lee Bollinger joined a host of elite institutions in replacing loans for incoming and current undergraduate students on financial aid with grants. “We are both proud of that diversity and determined to maintain it by expanding aid to the extent our resources allow,” Bollinger said in a statement to The New York Times in 2008.

Across the board, low-income populations have made up the biggest influx of undergraduates in the last 20 years. But despite the flurry of public commitments to inclusivity, the more selective a school is, the less likely it is to have significantly increased its low-income dependent student population.

At Columbia, the median income of students on financial aid has stagnated over the last decade, even after the University has increased its financial aid spending overall. Today, the number of Columbia College students on financial aid is 10 percent less than it was 30 years ago. Half of all students in Columbia College and the School of Engineering and Applied Science pay the full sticker price of tuition and hail from families that land in the top 8.5 percent of the U.S. income distribution.

These numbers reveal that underneath the University’s promotional materials and public resolve, Columbia’s commitment to undergraduate financial aid faces a great tension—one between the cost of its expansion and research programs that rank Columbia among the world’s top universities and the price of tuition that makes these programs possible.

Compared to peer institutions, Columbia experiences lighter returns on its investments and must depend on tuition dollars to make up almost a quarter of its central operating budget. The University has long pointed to its “smaller” endowment—valued at $11 billion in comparison to the massive, $40 billion endowments of institutions like Harvard—as part of the need to rely on other sources of revenue.

Though an $11 billion endowment is far from “small” in the context of all U.S colleges, its impact is felt most sharply as the University takes on investments like the billion-dollar Manhattanville expansion to remain competitive with those with endowments four times larger. The perennially cash-strapped Faculty of Arts and Sciences—the umbrella governing structure for Columbia College, School of General Studies, the School of Professional Studies, the School of the Arts, and the Graduate School of Arts and Sciences—has especially felt the cost of expansion at a time when rising tenured salary, renovated buildings, and financial aid is already weighing heavy.

To stay afloat, the unit developed a solution to pay for “Ivy League”-worthy resources: increase undergraduate tuition by 50 percent within the last 15 years and up enrollment by 30 percent in masters programs and the School of Professional Studies, where nearly all students pay full tuition.

Meanwhile, spending by Arts and Sciences on financial aid for Columbia College has more than doubled in the last 12 years. While Ivy League peers face similar pressures, schools like Princeton University and Yale University have rallied alumni and big-name donors around the cost of undergraduate education—as much as 80 percent of their undergraduate financial aid is funded through donor gifts. But at Columbia, pressures to create research opportunities and provide student amenities draw the focus of fundraising efforts, while donor gifts cover a quarter of rising financial aid costs.

In this way, Columbia has become increasingly dependent on its ability to attract students who can pay the record-high tuition fees. Tuition dollars from the pool of students who can financially contribute have come to serve as the bedrock for Columbia’s high ranking among Ivy League schools—both contributing to the cost of competitive research programs and sustaining the University’s commitment to the accessibility of those initiatives.

Tuition, endowment budget breakdown

Columbia’s dependence on tuition becomes especially clear during times of recession: After the Great Recession, the University admitted 50 more students to Columbia College, generating an extra $1 million in revenue that year.

The management of the multi-million-dollar operating budgets of Ivy League universities is dependent upon their abilities to generate revenue from diverse sources, including student tuition, fundraising and donations, medical centers, government support, and returns on endowments.

Tuition dollars from the pool of students who can financially contribute fund the cost of competitive research programs and add to the pot of available financial aid. In 2019, 24 percent of the University’s operating budget came from student tuition, whereas tuition contributes 9 and 6 percent of Yale’s and Princeton’s operating budgets, respectively. While traditionally, endowments are supposed to be the gift that keeps on giving, Columbia’s investments only yield 13 percent of the operating budget.

Meanwhile, endowment returns have funded about a third of Harvard’s and Yale’s budgets and half of Princeton’s budget. None of these three universities depend more on tuition than they do on their endowments. But Columbia’s endowment is both smaller and recently less profitable than those of other Ivy League institutions. Columbia’s endowment-per-student breakdown paints an even clearer picture. This ratio is under $400,000 per student, a figure nowhere near those of the three universities, which have the highest ratios of endowment-per-student from over $1.5 million to over $3 million.

And increasing the role of the endowment in the budget at will is not so simple. Universities want their endowments to grow or stay intact, and Sandy Baum, a higher education finance expert and senior fellow at the Urban Institute, said endowments could be a safety net to help make up massive losses related to unexpected crises as long as the institution does not spend money it can not eventually recover.

“How much you should take [from the endowment] to help you get through the crisis is the question. If you take too much, then if the crisis lasts for a long time, or if there’s another crisis a few years later, you’re not going to be able to continue to [run the university as you have been], so you want to balance it out,” Baum said.

Small budgets grapple with strain of expansion

With an endowment that is only a fraction of those of its competitors, Columbia has nevertheless taken on projects that stretch its budgets, which reinforces the role played by the stable source of revenue from full-paying students.

Part of the force behind skyrocketing tuition has been the University’s devotion to large-scale projects meant to make Columbia more competitive among leading universities.

Like other universities, Columbia has made risky financial decisions to fund capital projects, according to a 2016 report from the Roosevelt Institute. Projects currently in the works total at $1.7 billion, and in 2018, the University issued over $300 million in bonds, with nearly half going toward financing construction and renovation projects.

Taking on debts to fund projects does not threaten Columbia’s survival, but it does create more bills to pay and possibly indicates that there will be more tuition hikes in the future, said Clare McCann, a higher education policy expert at New America and previous policy analyst for the U.S. Department of Education.

“Those bills are still going to come due, and schools are still going to have to pay for all the amenities that they are operating and all the amenities that they’re continuing to build, and that’s just going to place additional financial pressure on the institution. … Increasing tuition is certainly possible, at least in the long run,” McCann said.

Arts and Sciences has long been divided over its stake in projects like these. The schools within the unit depend on their prestige to attract a cash flow of tuition and donations but must also fund student resources—in the form of research programs and global travel experiences—in order to maintain that prestige in national rankings.

Notably, the Arts and Sciences budget also takes on part of the burden of paying for large-scale projects like the expansion into Manhattanville, which requires a level of spending that is almost exclusive to the wealthiest, most selective private colleges.

Schools experience the cost of expansion via the “common cost tax” paid to the University’s central administration, which rises each year. Numbers-wise, in 2016, Arts and Sciences paid 15 percent of the unit’s total budget for that year toward the tax, and though all schools pay the tax, not all are equally affected.

Arts and Sciences gets back some of these funds via specific initiatives like the faculty diversity initiative. But Robert Jervis, a political science professor, said the major expansion designed to level Columbia against both top-ranked and much wealthier schools—including Harvard, Princeton, and Yale—incites a net loss that ultimately hurts Arts and Sciences’ already shaky budget.

“We are competing for students, for faculty with institutions that have per capita endowments two, three times what we have. … It’s clear why we have not constant but perennial budget problems—because we’re trying to do more things with less money,” Jervis said.

Rather than following the college spending trend and investing in recreational facilities, schools in Arts and Sciences are stretching their bank accounts just to pay for essential University operations like courses and keeping buildings functional.

By increasing undergraduate tuition by 50 percent and enrollment in masters programs and the School of Professional Studies by 30 percent over the last 15 years, Arts and Sciences has attempted to make up for budgetary deficits to fund these basic needs.

According to Amy Hungerford, executive vice president of Arts and Sciences and dean of the Faculty of Arts and Sciences, embarking on large-scale projects and setting a global vision were key markers of advancement in a liberal arts education during the early 2000s. But, Hungerford said, decisions that create more access among less affluent students are different than those reinforcing prestige.

“If we don't have [a competitive] stature in the world, A&S will have a hard time recruiting the best students and the best faculty to our campus. It has to be accompanied by focusing on these social justice issues of access,” Hungerford said. “It’s the infrastructure of access that has to be built and maintained powerfully outside of these other projects.”

With skyrocketing tuition costs, Columbia College’s need-blind, no-loan financial aid stands to be one of the most costly budget items for the Arts and Sciences. In the last 12 years, spending on financial aid has increased from less than $60 million to $121 million for Columbia College students.

In the absence of intentional financial planning, however, expanding recruitment and access does not fit into the budget. Jason England, a former admissions officer at Wesleyan University and assistant professor at Carnegie Mellon University, pointed out that many of the same liberal universities that promote inclusivity and progressivism are ultimately forced to abandon those visions when they do not fall in line with harsh financial realities.

“There is this really bizarre dichotomy at universities. … You have this university with these incredible professors who are teaching you accurate history, subversive ideology, progressive politics, but you have the administrative side of the university that’s run sort of like a cold corporation, like a soulless corporation,” England said.

As need rises, fundraising for financial aid lags

In this period of uncertainty, the University declined to comment on whether students can expect tuition hikes for the next school year, but it maintains its commitment to a need-blind, no-loan policy.

“We are committed to dedicating the resources necessary to ensure that Columbia remains accessible to all students,” a University spokesperson said in a statement to Spectator. “The mix of funding streams supporting financial aid may change over time, but our commitment to financial aid, student access, and diversity is unwavering.”

A key part of maintaining this commitment requires dedicated fundraising efforts, especially given that federal aid cannot amount to much against the cost of Columbia’s tuition. The Federal Pell Grant covers only a small fraction of Columbia’s tuition, so University grants cover the rest. For those whose parental incomes are slightly beyond the federal aid cut-off, the University often covers the bulk of the parent contribution for these families too.

At Columbia College and the School of Engineering and Applied Science, 17 percent of students are Pell Grant recipients, a percentage comparable to that of other Ivy League schools. However, percentages of Pell Grant recipients overreport “low-income” students on college campuses. Pell Grant recipients come from families making up to $60,000 a year, whereas the U.S. poverty line sits much lower at around $25,000 a year for a family of four.

High tuition has made the need for financial aid so expansive that many families earning up to $200,000 a year receive a graduated level of loan-free grants in order to send their child to Columbia. In a 2013 Arts and Sciences faculty meeting, a number of professors expressed concerns over the University’s record-high undergraduate tuition and the high family incomes of students who qualify for aid.

“The question is, ‘What do you want the financial aid program to achieve?” Dean of Columbia College James Valentini said in response to questions, according to the meeting minutes. “Columbia could give all of its aid money to families with annual incomes of $60K or less. But that would be a different institution.”

But while tuition has gone up, fundraising for tuition assistance has fallen behind. The amount of undergraduate financial aid covered by donor gifts has shrunk from a third to a quarter since 2013. Other institutions—Princeton, Harvard, and Yale included—fundraise specifically to support robust financial aid policies.

In 2015, Columbia College launched Core to Commencement, the first-ever Columbia-College-focused fundraiser, which was intended to strengthen the quality of instruction and school identity. The campaign has raised more for financial aid than other campaign priorities, which include wellness and funded experiences. But, Hungerford said, the college has yet to excite alumni donors through a campaign that centers around financial aid, which ultimately preserves the college’s reputation as a school that skews to serve the rich.

“I think it remains a question about whether we have targeted financial aid to the degree to which our aspirations for a socioeconomically diverse student body that would suggest is necessary,” Hungerford said.

Because of its budgetary constraints, Arts and Sciences uses fundraising as a necessity to break even, meaning that serious boosts in financial aid and diversity recruitment are beyond what the unit’s finances can afford.

“When we get a big gift, which we have not—not in the Arts and Sciences—for a long time, but when we land one, faculty say ‘Oh, that means things will get better,’ and usually no, what it means is ‘Oh my God, they won’t get worse,”’ Jervis said.

Thirteen years ago, Columbia received one of the largest donations in history, the $400-million gift from billionaire alumnus John Kluge, who pledged it specifically for financial aid. Even a donation of this size—$200 million of which goes directly to aid for Columbia College undergraduates—can only assist a limited number of students and does not supplement the fundraising efforts diverted to expansion in the long-term.

Instead, on top of raising its cost of attendance, Columbia has also turned to accepting students who can cover the full cost of tuition. One such group is the rising population of international students, who receive less financial aid than Columbia College and SEAS students in general. For reference, Columbia serves the highest percentage of international undergraduate students in the Ivy League.

Within the last 10 years, the University has committed to meeting the full financial need of its admitted international students—meaning need is taken into consideration when deciding if a student will be admitted, but financial aid is ultimately granted if the student is. But the numbers show that a spike in international student enrollment after 2016 coincides with an increase in tuition revenue larger than the group’s demand for financial aid.

As Columbia’s commitment to financial aid grapples with its need to generate revenue, one undergraduate school that has never experienced the benefit of the University’s commitment to both student access and affordability is the School of General Studies, the undergraduate school serving returning or non-traditional students. General Studies students do not receive full-need financial aid, though almost 40 percent of the class receives Pell Grants.

At the same time, General Studies is a major source of revenue for Arts and Sciences. With little financial aid, Columbia collects tuition from full-paying students and from student veterans’ grants subsidized by the federal government—nearly a fifth of General Studies students are veterans. According to 2019 data, General Studies contributed $97 million in tuition revenue to Arts and Sciences.

Jervis suggested that General Studies’ larger low-income population indicates that many General Studies students have more to gain from a Columbia degree than their comparatively wealthier Columbia College and SEAS peers. But, he said, increasing financial aid for General Studies students is not in the budget without reliable fundraising and donations.

“At GS, a lot of these people have had it much harder, they have many fewer options, so [a Columbia degree] really, I think, changes people’s lives more than students in the College,” Jervis said. “We’ve never been able to tap a Kluge-like GS alum [for financial aid donations] and without that, it’s always going to be an uphill battle.”

Deputy news editor Sofia Partida can be contacted at sofia.partida@columbiaspectator.com. Follow Spectator on Twitter at @ColumbiaSpec.

Jessica Li is a Graphics deputy editor. She can be contacted at jessica.li@columbiaspectator.com. Follow her on Twitter at @heyjessicali.

Mike Fu is a Graphics reporter. He can be contacted at mike.fu@columbiaspectator.com.