Sure, Raise That Tuition. But You'll Pay Later When Asking for Money

I’ve written here and here on this site about how much university gift solicitation calls may frustrate young alumni given the current economic landscape. How endemic is this frustration? Should universities be concerned?

A 2007 American Student Assistance poll asked roughly 4,000 former college students about their giving habits. About half of those polled graduated from a single, mid-sized, unnamed university in the Midwest. Discussing their findings, the authors write, “[S]tudent debt has profound repercussions on borrowers’ mindsets and behavior, including their propensity toward alumni giving.” Students with “higher loan amounts were less likely to contribute to their alma mater than those with lower loan amounts,” they found. 

The Journal of Public Economics published a 2011 paper which monitored the behaviors of 9,000 former students of another “Anon U." This study likewise found “suggestive evidence that debt reduces students’ donations to Anon U in the years after they graduate."

A 2012 study in Economics of Education Review looked at giving habits of former students over a 15-year period following their graduation at another university. The findings corroborate those in the Journal of Public Economics. “The mere act of taking out a student loan,” the scholars of the 2012 paper observed, “decreases the probability that the alumnus contributes to the university.”

But these three studies mostly concentrate on individual schools. How well does the observation generalize?

Higher education research firm Eduventures polled 60,000 university graduates nationwide in 2013. According their survey, 54 percent of former students interviewed who did not borrow money to attend school said they currently donate to their alma maters. Nearly 20 percent fewer non-indebted students reported that they had not given money to their alma maters within the past 5 years. Though Eduventures presents their data in a peculiar way, it seems like their survey corroborates the findings mentioned above.

Suppose student debt does, indeed, stifle alumni giving. Again, why should universities and their development offices care? Well, alumni giving represents a sizable part of the 21st century university cashflow. Alumni giving has also grown more quickly than foundation giving to higher education over the past year. Alumni giving at its current pace could outstep foundation giving in the near future.

Discussions of student debt most often focus on how it restricts higher education access, but it also "impacts universities long after those students graduate," according to a webinar that accompanies the Eduventures survey. Universities that got carried away hiking tuition will suffer at their own swords as their graduates answer calls from the collection agency and skip those from the university gift solicitor. This is yet another sad irony of the cost shift in higher education off the state and onto students and families.