May 3, 2007

N.Y. May Alter College Funding

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Assemblyman Peter M. Rivera (D-76) recently proposed phasing out The Aid to Certain Independent Colleges and Universities program to private institutions and redistributing the money to SUNY and CUNY programs.
The aid, commonly referred to as Bundy Aid, provides direct unrestricted financial support to over 100 New York State private colleges and universities.
According to the New York State Education Department Office of Higher Education, the purpose of the monetary aid program was to help preserve the strength of private and independent institutions of higher education. Over the years, however, the allocation of Bundy Aid to private institutions has caused much dispute in the state legislature.
According to Guillermo Martinez, legislative director to Mr. Rivera, private institutions such as Cornell experience great wealth while the SUNY and CUNY systems suffer.
Martinez indicates extremely poor graduation rates as the major problem faced by the SUNY and CUNY systems, which enroll 650,000 students.
“The U.S. now has the lowest college completion rates in the entire industrialized world,” said Martinez. “In terms of both economic and national security, this trend poses a great threat to our nation.”
Rivera’s proposal aims to refocus resources to where they are most needed and use Bundy Aid to increase college success rates in the SUNY and CUNY systems.
According to Martinez, SUNY and CUNY schools cannot rely on endowments or donations as private institutions can and the modest tuition that they charge is already considered high for many N.Y. state low-income families.
Martinez noted the huge endowments of Cornell, Columbia and NYU, which are $4 billion, $2 billion and nearly $6 billion, respectively. He also mentioned Cornell’s fundraising drive to raise $4 billion over 10 years.
Stephen P. Johnson, vice president of government and community relations, believes that fundraising is a crucial and commonplace method to raise money for not only Cornell, but many private institutions.
“The important public policy here is that the state has a balanced approach to subsidizing higher education: through the SUNY and CUNY budgets for the public sector and through Bundy Aid for private higher education,” said Johnson.
These subsidies are what help colleges and universities constrain tuition levels.
“The subsidies for SUNY and CUNY are of course higher and permit lower tuition rates, while the subsidies for private institutions are much more modest, but still important,” said Johnson.
According to Johnson, private not-for-profit colleges and universities are vital to New York State and should be supported.
“[These institutions] currently enroll 460,000 students, over 300,000 [of whom] reside in New York, said Johnson.
Without these private institutions, many of those New Yorkers would be more likely to apply to SUNY and CUNY to stay in New York thereby costing the State government much more to provide the necessary professors, facilities and services.
“More importantly, when looking at 4 year college performance in New York State, these private colleges grant 59 percent of the baccalaureate degrees, 74 percent of the master’s degrees, and 81 percent of the doctoral and first professional degrees,” said Johnson.

The Bundy Aid program is currently only funded at about 30 percent of the full authorized levels.
“The overall total for Bundy Aid at all the private institutions is $46.2 million on an overall New York State base budget of $121 billion,” said Johnson.
Cornell receives about $1.9 million in Bundy Aid from New York State for both the Ithaca campus and the Weill Cornell Medical College. According to Johnson, Cornell will experience additional cost pressure on the University budget if Bundy Aid is cut.
“Because this money is unrestricted it is used for general institutional support [and] helps Cornell reduce the unmet costs for instruction,” said Johnson. “Providing instruction in the approximately 4,000 courses taught at Cornell is expensive. There are few funding sources, outside of tuition, that can be used to fund these costs — Bundy Aid helps.”
Martinez recognizes that Cornell has a unique relationship with the state in the form of its three contract colleges, the College of Agriculture and Life Sciences, the School of Industrial and Labor Relations and the College of Human Ecology and assures that tuition rates in those colleges will not be affected.
“The contract colleges, because they are funded as state assistance through SUNY would not be affected. Cornell does not receive Bundy Aid for contract college students since their education is already subsidized through the SUNY budget,” said Johnson.
Perez’s proposed legislation would take effect in the State’s budget for the coming 2007-08 academic year.
“There will be a 20 percent decrease each year for the next five years, giving institutions plenty of time to compensate for the loss of the subsidy,” said Martinez.
While Martinez believes that Bundy Aid has grown into a monster that must be stopped, Johnson maintains an opposing stance.
“The current public policy behind Bundy Aid is important to the overall balance of support for higher education and to affording maximum opportunities … by all New Yorkers,” said Johnson.

Correction appended: “N.Y. May Alter College Funding” incorrectly states that Columbia University’s endowment is $2 billion and NYU’s is $6 billion. The sentence should read, “Martinez noted the huge endowments of Cornell, Columbia and NYU, which are about $4 billion, $6 billion and $2 billion, respectively.” The Sun regrets this error.