As Donor Dollars Continue to Flow Towards Scholarships, It's All Quiet on the Tuition Front

Frank Brunckhorst, a member of Carnegie Mellon University’s Board of Trustees, has given $10 million to support undergraduate student scholarships at his alma mater. This, of course, is good news for the many students who will benefit from the gift.

But before I take a closer look at the gift, I've instituted a new, self-imposed rule. Every time I write a post on a new scholarship gift, I will balance it with bad news surrounding the ever escalating student loan crisis. The reason is simple. There's a "whistling past the graveyard" effect permeating the higher ed philanthropy space nowadays. Very few donors are stepping up to address a real problem here: runaway tuition costs that burden students with a lifetime of debt.

This has been recurring theme in Inside Philanthropy's higher ed coverage, and it's a rather strange situation when you think about it. After all, the big engines of higher ed philanthropy are alumni. Many make their fortunes in the world of finance. They expect results. It must be disillusioning to give a huge gift only to see tuition continue to soar and costs skyrocket.

This theory has legs, as evidenced in my recent post on the newly expanded Fund for Academic Renewal. Courtesy of the American Council of Trustees and Alumni, the fund provides a vehicle for making "meaningful donations that will have a beneficial impact on U.S. colleges and universities." Fair enough. But that still doesn't address the tuition issue.

This isn't to say funders aren't concerned about the byproduct of escalating tuition, student debt. Many are. But to borrow then-President Obama's line of attack against Republicans, addressing student debt is like trying to get a car out of a ditch. The car's already in the ditch. How about avoiding the ditch in the first place?

In fact, it seems as if the one person as of late most committed to actually cutting tuition is Wisconsin Governor Scott Walker, a Republican.

Which brings me back to news out of Pittsburgh. Brunckhorst's gift will support the Frank Brunckhorst Presidential Scholarship Endowment, contributing to an initiative that provides some of the university’s top students with significant support while assisting CMU to attract the most talented scholars to its renowned academic programs. Attending CMU costs roughly $50,000 annually.

Brunckhorst graduated from Carnegie Mellon in 1987 with a B.S. in Business. He eventually served as chairman of Boar’s Head Provisions, the leading provider of exceptional delicatessen products. Brunckhorst now lives Sarasota, Florida, and still serves on the board.

Again, in some sort of higher ed vacuum—world where money is infinite and the laws of economics are magically suspended, it's easy to find no fault whatsoever in a gift earmarked for scholarships. But each gift is a subtle nod to all involved parties—administrators, politicians, student loan providers; everyone but the students themselves—that the gravy train will roll on. These gifts provide schools with zero incentive to cut tuition. Quite the opposite, in fact. As of late 2015, tuition has risen across the board, even though government reports suggest that there has been no inflation in the rest of the economy over the previous 12 months. 

And what about the bad news I promised at the beginning of this post? Don't worry, I didn't forget. I wanted to save it until the end for maximum effect. In a January Wall Street Journal piece entitled "Student Debt Payback Far Worse Than Believed," we learn that revised Education Department numbers show at more than 1,000 schools, at least half of students defaulted or failed to pay down debt within seven years.

Read the whole thing here.