Major universities across the country maintain large endowments that not only provide financial stability, but also allow those schools to provide scholarships to worthy students in need. Should states do the same?
That’s the debate right now in Oregon, which this fall could become the first state to set up an ongoing investment trust fund for higher education. The Opportunity Initiative, a proposal on the November ballot, could change the way Oregon funds college grants. The initiative would authorize the state to issue bonds for the purpose of starting up the investment fund, which would be used solely to pay for state scholarships.
Having a dedicated fund, says State Treasurer Ted Wheeler, would take grants for higher education and vocational training out of direct competition with K-12 funding -- or any other kind of funding, for that matter. “There are always more pressing immediate financial needs,” says Wheeler, who came up with the idea for the fund and is also contemplating a gubernatorial run in 2018. “So it’s really easy to put off investments that won’t show results for another 20 years.”
Under the proposal, if as much as $100 million in general obligation bonds are issued to help start the endowment, they would be paid back through the state’s general fund (not from the endowment’s earnings).
Steve Buckstein, the founder of the Cascade Policy Institute, a conservative think tank, argues that Oregon taxpayers should not be saddled with debt because colleges are making the cost of higher education unaffordable for many people. There’s no proof, he says, that the state will benefit economically if more of its residents have a college degree.
But Wheeler says that the Opportunity Initiative’s grants and scholarships would have a workforce development tie-in. They would be focused on students in need who are pursuing degrees in science, engineering and technology, as well as individuals seeking vocational training or other workforce development programs. The fund would also offer these needy students stability, as currently they have to reapply for their grant each school year.
“Only one of every five students who qualify based on need actually get a grant,” Wheeler says. “And if they don’t get the grant the next year, that student either has to drop out [of school] or reduce their credit hours to afford it. This will allow students to focus on graduating on time and putting their degree to work.”