Wake Forest stepping up

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gtyellowjacket

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If you're a North Carolina resident and your family makes less than $200,000, you can go to Wake Forest tuition free. If your family makes less than $100,000, they will also cover your living expenses.

That's massive. They could keep growing their endowment and paying fees to financial advisor cronies like many other schools but they are spending that money on kids. Good for them. I hope other schools with these massive endowments just sitting around getting bigger year after year decide to emulate.

www.wral.com

Wake Forest University to offer tuition-free education for some NC students starting next year

The move is part of the university's"North Carolina Gateway to Wake Forest University" initiative. Officials said it aims to increase access to higher education and alleviate financial burdens for local families.
www.wral.com www.wral.com
 
This stuff is getting real-in a good way The Carolina Covenant (Is that right CFord?), Duke has some thing going like Wake-at least for tuition
 
I have a daughter who's a sophomore in college and a son who's a senior in high school. My wife and I are just a bit above the threshold but I'm fully in support of this and happy that colleges are making these kinds of moves. The less of a barrier income is to higher education, the better for the country as a whole.
 
gtyellowjacket said:
If you're a North Carolina resident and your family makes less than $200,000, you can go to Wake Forest tuition free. If your family makes less than $100,000, they will also cover your living expenses.

That's massive. They could keep growing their endowment and paying fees to financial advisor cronies like many other schools but they are spending that money on kids. Good for them. I hope other schools with these massive endowments just sitting around getting bigger year after year decide to emulate.

www.wral.com

Wake Forest University to offer tuition-free education for some NC students starting next year

The move is part of the university's"North Carolina Gateway to Wake Forest University" initiative. Officials said it aims to increase access to higher education and alleviate financial burdens for local families.
www.wral.com www.wral.com
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Did they win the lottery?
 
1moretimeagain said:
Did they win the lottery?
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They have a $1.1 billion dollar endowment for their academic mission. Assuming a 7% annual return, that's $77 million that they can use to further that academic mission. That money can go to professor salaries, supporting grad students and many other things including tuition assistance. Some of that money is earmarked and can't be used for whatever but some of it is up to the administration.

So instead of putting that interest into growing the endowment or bringing on a few more research assistants, or funding a few more professors, they made the commitment to completely fund poorer NC students. Good for them.

Also note that although UNC is a much larger school, they also have an endowment that is five times larger. I hope moves like this will encourage UNC administrators to reallocate more of their earnings towards tuition assistance for less privileged North Carolina residents. Their current cut off is families making $80,000 per year so 40% of this new Wake Forest policy.
 
gtyellowjacket said:
They have a $1.1 billion dollar endowment for their academic mission. Assuming a 7% annual return, that's $77 million that they can use to further that academic mission. That money can go to professor salaries, supporting grad students and many other things including tuition assistance. Some of that money is earmarked and can't be used for whatever but some of it is up to the administration.

So instead of putting that interest into growing the endowment or bringing on a few more research assistants, or funding a few more professors, they made the commitment to completely fund poorer NC students. Good for them.

Also note that although UNC is a much larger school, they also have an endowment that is five times larger. I hope moves like this will encourage UNC administrators to reallocate more of their earnings towards tuition assistance for less privileged North Carolina residents. Their current cut off is families making $80,000 per year so 40% of this new Wake Forest policy.
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Thanks a ton for sharing the link in the OP! That is a really neat thing Wake Forest is doing.

So not to be a “well actually” guy on this, but that’s not exactly how university endowments work. I can definitely understand why it seems like that’s how they would work, and it is definitely a very widespread common misconception. It’s one that I had before I started working in the wealth management/financial planning/investment management space.

University endowments should be thought of like giant mutual funds, comprised of many, many much smaller individual funds. Each of those smaller individual funds are endowments in end of themselves, which have very specific and legally binding gift agreement language between the university and the original donor that endowed fund can only be used explicitly for the purpose outline did the gift agreement – nothing more, nothing less, and nothing different.

So for example, let’s say that Wake Forest has a $1 billion endowment overall. And for the sake of using easy numbers for conversation, let’s say that the $1 billion endowment that Wake Forest has is comprised of, say, 10,000 individual endowments of $100,000 each. Let’s say that of those 10,000 individual endowments, 9,000 of them are what is known as “restricted” dollars, meaning that they are attached to legally binding gift agreements that have very specific purpose language in them- i.e, they can only be used to support this particular scholarship, or that particular professorship, or this particular research project, or that particular departmental expendable fund. That being true, that means that $900 million of the overall $1 billion endowment for Wake Forest University, is already spoken for and cannot be used for any other purpose.

Let’s say the remaining 1,000 smaller endowed funds within the overall university endowment are considered “unrestricted” meaning that the donors have given the university complete discretion on how they use the funding. That means that of the overall $1 billion Wake Forest University endowment, only 10% of it is actually unrestricted dollars that can be used for any purpose as deemed necessary by university leadership. The other 90% legally cannot be used for any other purpose other than what is outlined in the individual gift agreement is attached to the endowed funds.

All of this to say, it’s a lot more helpful to think of university endowment as mutual funds instead of as checking accounts or brokerage accounts or slush funds or whatever. It’s also why universities like Wake Forest, Duke, etc.- despite being extremely well resourced overall and despite having large endowments- still have to raise a lot of private philanthropic dollars year over year to fund their missions.

But absolutely great on Wake Forest to utilize some of their discretionary resources in this manner.
 
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NCK9 said:
Curious why they are limiting it to NC residents being a private school.
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Great question. I wondered that myself, because I’m pretty sure something like 75% of the student body at Wake is OOS. Though, granted, a very large percentage of those students come from wealthy families in the northeast.
 
mpaer said:
This stuff is getting real-in a good way The Carolina Covenant (Is that right CFord?), Duke has some thing going like Wake-at least for tuition
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Yessir! The Carolina Covenant functions similarly. Instead of there being a direct household income threshold for qualification, though, they use the federal poverty line as the threshold. I believe it has grown from 100% of the federal poverty line (which is what it was in 2009 when I enrolled as a Covenant scholar) to, I believe, 200% of the federal poverty line is the cutoff now. I would need to fact check myself on that, but I believe that’s the last that I heard in one of the recent newsletters they sent out to Covenant alumni.
 
gtyellowjacket said:
They have a $1.1 billion dollar endowment for their academic mission. Assuming a 7% annual return, that's $77 million that they can use to further that academic mission. That money can go to professor salaries, supporting grad students and many other things including tuition assistance. Some of that money is earmarked and can't be used for whatever but some of it is up to the administration.

So instead of putting that interest into growing the endowment or bringing on a few more research assistants, or funding a few more professors, they made the commitment to completely fund poorer NC students. Good for them.

Also note that although UNC is a much larger school, they also have an endowment that is five times larger. I hope moves like this will encourage UNC administrators to reallocate more of their earnings towards tuition assistance for less privileged North Carolina residents. Their current cut off is families making $80,000 per year so 40% of this new Wake Forest policy.
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UNC tuition is about 17% of Wake’s. Someone making $190k per year can afford UNC tuition, not so much with Wake.
 
One important thing to note, though, is that it sounds like this program at Wake Forest covers just tuition and fees for families qualifying below that household income threshold. Which is obviously fantastic! Tuition and fees are a huge bulk of the overall cost of attendance at a place like Wake Forest, which I believe at last check was something like $92,000 per year. The Carolina Covenant, by contrast, also helps to cover room and board, textbooks, and provides a laptop computer, so it is very much a “full cost of attendance” type coverage, whereas I imagine that Wake students who qualify for this new program will still have to take out some sort of loan for non-tuition related expenses.
 
CFordUNC said:
One important thing to note, though, is that it sounds like this program at Wake Forest covers just tuition and fees for families qualifying below that household income threshold. Which is obviously fantastic! Tuition and fees are a huge bulk of the overall cost of attendance at a place like Wake Forest, which I believe at last check was something like $92,000 per year. The Carolina Covenant, by contrast, also helps to cover room and board, textbooks, and provides a laptop computer, so it is very much a “full cost of attendance” type coverage, whereas I imagine that Wake students who qualify for this new program will still have to take out some sort of loan for non-tuition related expenses.
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This program does cover the full cost of attendance for families making less than 100,000 a year. It only covers tuition and fees for families making less than $200,000 a year.
 
gtyellowjacket said:
This program does cover the full cost of attendance for families making less than 100,000 a year. It only covers tuition and fees for families making less than $200,000 a year.
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Ahhh gotcha, that’s awesome. Thanks for the clarification. That’s really neat. Good on Wake!
 
NCK9 said:
Curious why they are limiting it to NC residents being a private school.
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It sounds more generous to pay full tuition for those with family incomes under $200k. They don’t have the funds to cover all of their admits who fit within that income band. They also likely have a larger applicant pool from NC and therefore, better data to model how many students they’ll need to support at that level.
 
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