News Scrapbook 1986-1988
New York, NY Times (Cir. D. 1,001,694) (Cir. S. 1,584,259)
Investing Gains Favor·as Way to P.ay -for College
dren to attend a school that might be , inappropriate for them or force admis- t sions officers to bend academic or ethi- cal standards. · Last year Gov. Jiimes J. Blanchard ' of Michigan proposed a version of the plan that would address this problem. Under the new Michigan Eduational Trust, approved in December, parents pay money into a trust and receive cer- tificates that can be redeemed al any 1 of the state's 44 public colleges and u111- versities. The investment can also be 1 applied to private colleges or out-of- 1 state institutions, although without the guarantee that it will cover full tuition. , The Michigan plan is now on hold pending a ruling from the Internal Revenue Service on whether the price of the cerllf1cales and the,r value when redeemed will be taxable. A ruling is expected in late summer, which will be closely watched by other states and schools. An Approach to hill the Risk s To avoid quesllons about the viability ii of prepayment plans, some political and educational leaders have called fo1 ~, programs that would build up savings s· but not guai-antee that the resultmg nest egg would cover any set percent- ii age of tmuon. This approach. would ti shift the risk from the state or insutu- le tion to the individual family. Such reasoning has led to a prolilcra- ll uon of proposals for savings plans, " some of which would carry the mcen- 51 tive of tax deductions. Gov. John Ash- e· croft of Missouri is promoting a_ plan to w allow families to set up "Family Sav- c ings Accounts" in hanks and other n fmanc1al msututions. The Regents' q plan in New York would be similar ex- I, cept that the money would be contnb- ute-d 10 a state-run trust fund. The Legislature m llhno1s has also v approved a plan for education sa:vmgs F bonds. Under this scheme, a poruon of h state general obhgat1on bonds 11,1ould be Iv set aside for purchase by families as a c vehicle for saving for college. Income from the bonds would be exempt from Federal ·and state taxes. Some have r proposed selling up such a proii.am on a national basis. 1, '/ "The mam thing people need is an easy, systematic way of saving," said Troy Murray of Cambridge Associates, a higher education consullmg concern m Boston.
and have the effect of penalizing rather quesne. Canisius College in Buffalo, than encouraging savings. . N.Y., for example, has signed up 22 "The basic principle is : Confiscate families. Some experts have quesJioned the else they have to contribute," Mr. financial viability of the prepayment Leonard said: "From the,point of view plans and fear that faulty economic as- of the family, the besl thing to do is buy I sumptions will. force sta_le govern- a Mercedes the day before you fill out ments to subs1d1z.e the tun1on guaran- the burden of educ~t1on from the next tributions that would allow them to de- generation of students through loans to duct money that had been set aside for the next generation~ of gov~rnors educa11on. through state subsidies," sa_id Aims McGuinness Jr. of the Educauon Com- i mission, an organization that monitors The concept of generating increased I state educational activities. family savings as a way to finance col- John D. Finnerty, f::Xecutive vice- lege first anracted national attention president of CSB Holding~ Inc., a fman- two years ago when Duquesne Univer- cial services concern in Princeton, sity began 11s prepayment plan. Under N.J., examined the Duquesne plan and the arrangement, parents pay several calculated what it would lake to gener- the family savings and then see what the form." tees. Mr. Leonard has been working on a new method lo calculate parents' con- "What you may be doing is shifting The Duquesne Payment Plan
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whether they assure coverage of room and boa rd as well as tuition. Meanwhile, at least a dozen colle~es are promoting their own prepaym~nt anangcments; Duquesne University In Pittsburgh has already signed up 582 families. In New York the Board of Re- gents has endorsed a plan, modeled on Jnd1v1dual Retirement Accounts, that would permit parents to shield up to $2,000 a year from state income taxes. A key argument for such plans is their implicit guarantee that, no mat- ter how fast tuitions rise, they can be redeemed for a college education. "You can see from the political re- sponse that they have struck a nerve," said Robert Schwartz, assistant for educalmn to Gov. Michael S. Dukakis of Massachusetts. "People see the cost of college soaring. and they are scared that 11 will turn out to be beyond !_heir reach." Nonetheless, persuading families to accept .such financial innovations mean reversing the economic psy- chology of the 1970.'s and early l980's. In those years high inflauon rates- made 1t diff1 ult, and even financially unwise, to save money for future use, and federally subsidized programs made inexpensive loans readily avail- able, even to middle- and upper m1ddle- mcome fa mihes. The climate has now changed. lnfla- uon has cased, and Congress, through cuts m loan and grant programs, has made 1t clear that from now on the Federal Government will concentrate its funds for higher education on disad- vantaged students. An Impediment 10 avings "The one likely new source of fund- mg for higher education is the savings that middle-class families are cur- rently not domg," said Herman Leon- ard, a public finance specialist al the John F. Kennedy School of Govern- ment at Harvard University. "The trick 1s to find mcenllves to make them put money aside for college." But one impediment to savings are the formulas used by the College Schol- arship Service to guide colleges in determining eligibility for scholarship aid and the amount a family would be expected to contribute toward tuition. Those formulas are based on the fami- ly's income, savmgs and other assets Striking a Nerve
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Spring Valley, CA (San Diego Co.) Spring Valley Bulletin (Cir. W. 2,708)
Investment Accounts Gain Favor as Way To Pay Colle Costs ·- ,-;:'"" By oWARD B. Fl An old-lash oned idea for nnanc1ng coll ge education 1s again winning con- verts: encouraging families to save and invest, rather than borrow, to pay 101 tuition. Spurred by fears that the debt bur- dens of cc>llc-gc students and their par- ent. are g umg out ol hand, lawmak- ers and •ducator have designed a varl~ty 01 pay-now, study-later plans, ca lhng them the ducuuonal cqu,va• lent or Christmas clubs and lnd1v1dual Retirement Accounts. But crtucs have challenged the fman- cl· I stab1hty ol sC>m C>f the plans, sug- gr ttng that th y a r<• based on unreal- 1 IIC ccone>rmc proJec11ons. Others fear that some plans are forcing parents to commit young children to educational blueprint~ that may pot meet th eir 11 •eds whc-n they reach college age. Payments to a Trust fund De spite such rcserva11ons, M1ch1gand , h~ve enacte and five other st,,tes ev- , 1· ns that permit parents to pay s P ,, d dollars into a state-run ~~!/!:~~heir children are Y~~gt~: return for tU1tt0n guarantees wS milar children reach college age. I bills ure awaitmg s1gnaturevs of the1a·gao:~ · II nd W st 1rgm crnors of I inois 38 other states re undl'r d1scuss10r\ 1n · . t ntlud1ng New Jersey and connecucu . The proposals vary on such point~:r- whal percenrnge of tu1t1on they g e to pay whether they apply lC ::~ tate-ru~ and priv,~<' colleges and on-tlnued on Page 9, Column 1
-JUL 1 6 1987
ate the tuition revenue for a four-year- old whose parents invested in the plan last year with the required contribution of $9,182. . He concluded that if all investors ac- tually enrolled, the Duquesne portfolio managers would have to achieve an average yearly investment return of more than I4 percent to cover the pro- jected tuition charges in the years 2000 <11> 2004. Such a rate, he said, is "an un- realistic objective." On the other hand, Mr. Finnerty said, if the portfolio managers achieved an average return of 9.5 perce_nt - the rate at which stocks have mcreased over the last two decades - financial stabihty would require that five stu- dents not cash in their options for every four who did. "Duquesne is doing heavy discounting of tuition for those who sign up," he ~aid. Limiting Choices of Students Lois Folmo, associate director of alumni relations at Duquesne, ac- l(nowledged that the university as- sumes "that not everyone will show up." She also noted that the economics of the plan is based on the relauvely modest costs of educating students who otherwise would not enroll. "It doesn't cost that much more to have 25 stu- dents in a b10logy class instead of 22," she said. . Others criticize the plans because they llrnlt students to a single mst1lu- tion selected by their parents long be- fore the young people are ready to en- roll in college. Critics say that this could lead to undue pressure for chil-
..Allen~ P. c, B ,R~• ' Haidinger Heads San D"ego Worl ~~!a!r,~dlf ~u~cll~o :;iant,1 Fe, head of New West v, nl ui->~, a business d velop- ment flzm, has been elected president of the San Diego Wo1'd A!f:lirs Council. He suc-
Some plans will finance 4 years of tuition. thousand dollars to the college now. The college invests the money and, when the student graduates from high school, it will provide four years of education at no additional cost to the family For example, parents of an infant would invest $8 630 while those with an 8-year-old wouid invest $16,470. Since the current annual tu1t1on is $6,825, ei- ther amount would constitute a consid- erable tuition discount over a four-year period. The university projects that an infant whose parents begin paying now would be guaranteed four years of tu1- t10n, a total charge of $102,604, when the child reaches 18 years of age. Examining the Numbers ·1ne plan hinges on the assumption that the rate of return that the univer- sity receives on the invested furuls will exceed tuiuon mcreases. Moreover, since the parents of students who do not eventually enroll are entitled to a refund only of the amount contributed, interest on these funds accrue to the in- stitution. • Al least a dozen other colleges have establish_ed plans similar to that at Du-
New York, NY Times (Cir. D. 1,001,694) (Cir. S. 1,584,259)
JUL 18 1987
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New York, NY Times (Cir. D. 1,001,694) (Cir. S. 1,584,259)
JUL 1 9 1987
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After Chernobyl and Bhopal, the Liberal Arts Seem More Relevant Fut~!F~~ngineers Getting More Hun1ap.ities Requirements By J ENNJFER A. KINGSON r · - BOSTON - I,, I I - ' M ANY engineering students have tradiuonally re- garded human111es courses as educational ,- e- 1 · ,. , v,-, I·~ , / ., · : I j -. 1,, - · / ,, ·M ' I •./ / . .,___ '! j' I ,, /':,",/ 7 ~r {7 Y- ~ ~-:-. 1-, •J r. ,•i!-:..;F . / I I ' -'.7 ;·, - t. i ' f< ,.· '' ·. ?-. schools are really concerned with the enlighteni ng aspects of Greek or with hangmg onto a captive clientele "It seems clear that industry is satisfied with engi~ neers with a four-year trammg," said Henry Bachman, president of the Institute of Electrical and Electron ics Engineers. The rest of the training, he said, can be done on the Job.
fnlls. Rcc~ntly, however, in an effort to prepare students to better deal with the social and ethical 1mphca- tions of their chosen fields, schools such as the Massachusells Institute of Technology are increasing their emphasis on arts and social sciences. Educators at these lnstituuons say that their aim is to push students be- yo,1d the point of bemg merely "well- rounded." At technical colleges where knowledge of the humanities was onre treated as a luxury, profes- sors arc showing an increased awareness that moral issues, such as those arising from the Challenger ac- c1dcn1 and the disasters at Chernobyl and Bhopal, require students to think mor" deeply about the society in which they will operate. The number or undergraduates who take degrees in engineering more than doubled from 1975 to 1985 according to the Department of Education During the same period, the number of history degrees de- clined by 49 percent, and English and
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. Indeed, this new interest in the humanities comes at a time when an explosion of technical knowledge has prompted the organizations that accredit engineering schools to tighten their standards and compel their mem- bers to offer more vocational training. To help counter that pressure, the National Endowment for Humanities has_granted money in the last three years to almost 150 projects at schools that are sharpening their emphasis on liberal arts. The new interest in humanities may be a cyclical oc- c_urrence. ln the 1960's, liberal ans emerged as a reac- l10n_ to the career-oriented curriculums of the J950's. Wh1l_e academic courses in the l970's were judged on the merits of their "relevance," today's watchwords seem to be "coherence" and "integration." In fact, some professors see a new climate of respect between "hard_" science faculties and their counterparts 111 the h_umanitJes. At the Colorado School of Mines, an in- terd1sc1plmary -hon_ors program for engineers brought fa cu lty members m the sciences and humanities to- gether lo teach seminars in teams. "You can now see a metallurgist talking about Chinese literature" said Tl10mas Philipose, the program's principal tutor.' "One of the things we used to have to battle was the idea that engineers weren't good in humanities or should- n't rea,l,ly get themselves too concerned about political things, said William R. Grogan, dean of undergraduate studies at Worcester Polytechnic Institute. Engineers who graduate from broader programs come to see that the creative spirit they take pride in is shared by other disciplines. "Scientific theories are like Michelangelo's 'David,' " said Dr. Keyser, "They are both solutions to problems, and they have their own esthetic." While future engmeers may be learning more about humanities, at many liberal ans colleges students are al- lowed to graduate with minimal scientific and mathe- matical training. Dr. Gray of M.I.T. criticized colleges that lack strict science requirements. "We probably pro- vide an education that is more liberal," he said.
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literature degrees by 34 percent. But many educators say that corporations are becoming interested in broadly t'ducatcd employees rather than those who are well- verst'd in a technology that may soon be obsolete. Al a growing number or technical schools, courses that once we_re el c11ves have become requirements, produc- ing engineers who are conversant with medieval chiv- alry or compu_ter scientists who write Afncan percussion music - or, simply, better English sentences. The trend h s spread to such diverse institutions as the United States Naval Academy in Annapolis, Md., where humani-
ties requirements were enhanced three years ago, and the Callfornia Institute of Technology in Pasadena, where stud_ents now miisrspecialize in one of five human- 1st1c fields m addition to their technical work ":"'mong the engineers, there is a realization that the social and political implications of the technology are as Important as. the technology itself," said Samuel Jay Keyser, associate provost for educational policy and pro- grams at M.I.T., where the faculty voted in May to re- structure the curriculum and create a minor in the hu- manities, ans and social sciences.
It 1s not clear, however, just how schools can fit both types of courses into a four-year program that many agree 1s already far too brief. "We should recognize that, m four years, we cannot _educate an engmeering student to the level_ of a begmning professional," said Paul E. Gray, president of M,I.T, The school's curriculum changes may be a step tov:ard acknowledging that pro- fessiona l trainmg now reqmres graduate studies, he said. With so many potential graduate students being lured from academia by high-paying ·jobs, some members of professional engineering societies question whether
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