College Offers Students a No-Cost, No-Student-Loan Education With Funds From Its $1.1 Billion Endowment

Student Loan Girl — Tue, 22 Jul 2008 22:39:00 GMT

Berea College is drawing the attention of lawmakers for its no-frills approach to education and its free tuition policy.

The private Kentucky college — founded 150 years ago to educate freed slaves and “poor white mountaineers” — accepts only applicants from low-income families and charges no tuition, according to an article in The New York Times (“With No Frills or Tuition, a College Draws Notice,” July 21, 2008).

Every Berea student is awarded a four-year tuition scholarship and the school doesn't offer student loans.

School Spends Endowment on Students, Not on High-End Amenities

Despite its $1.1 billion endowment Berea, unlike other colleges with large endowments, has no football team, coed dorms, hot tubs, or rock climbing walls. Students eat food from the college’s own farm, make the furniture used to furnish the school, and are required to work 10 hours a week in an on-campus job.

Although Berea keeps costs down with its streamlined approach to higher education, without tuition revenue to supplement its funding, Berea relies on endowment income to cover 80 percent of its $43 million education and general budget, and about two-thirds of its $55 million operating budget.

“You can literally come to Berea with nothing but what you can carry, and graduate debt free,” says Joseph Bagnoli, the school’s associate provost for enrollment management. “We call it the best education money can’t buy.”

A Push to Use Endowments for the Public Good

News of Berea’s unusual approach to higher education is spurring debates about whether the nation’s wealthiest universities are doing enough for the general public to warrant their tax-exempt status, or if they’re simply hoarding money to serve an elite few, writes New York Times reporter Tamar Lewin.

In January, the Senate Finance Committee requested detailed endowment and spending data from the 136 colleges and universities with endowments of at least $500 million, with an eye toward possibly forcing them to spend at least 5 percent of their assets each year, as foundations are required to do.

Dozens of wealthy colleges have since increased their financial aid to low- and middle-income students, in some cases, replacing loans with grants. More than three-quarters of the students at Berea already receive Pell Grants.

“You see some of these selective liberal arts colleges building new physical education facilities with these huge sheets of glass and these coffee and juice bars, and charging students $40,000 a year, and you have to ask, does this contribute to the public good, or is it just a way for the college to keep up with the Jones?” says Berea’s president Larry Shinn.

He adds, “We are a tax-exempt institution, so I think the public has a right to demand that out educational mission be at the heart of our expenditures.”

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Malls and Retail Stores a No-Go for Depressed Shoppers

Student Loan Girl — Sat, 16 Feb 2008 06:33:00 GMT

Signs of depression:

Loss of appetite
Loss of interest in daily activities
Loss of energy
Hopelessness
Self-loathing

Recommendations for treatment:

Don’t go shopping.

Primed for Sadness, People Spend More

A recent research experiment shows that people who exhibit signs of depression tend to be more willing to cough up the dough, according to a TIME Magazine article by Barbara Kiviat (“Depressed? Don’t Go to the Mall,” Feb. 8, 2008).

Researchers from Carnegie Mellon University, Harvard, Stanford, and the University of Pittsburgh split up their experiment participants into two groups: one that watched a sad video clip involving the death of a boy’s mentor and one that watched an emotionally-neutral video clip about the Great Barrier Reef.

The two groups were then asked how much of the $10 they were getting paid for the experiment they would be willing to pay for a water bottle. Participants in the sad video group were willing to spend about four times more than those in the Great Barrier Reef video group ($2 on average, compared to 50 cents).

Researchers say the results from their experiment indicate that people who are unhappy tend to overcompensate by buying new things.

“Feeling blue causes people to have a devalued sense of self, so spending more money on a new object — which people may identify, in a way, as an extension of themselves — starts to undo that deflation,” Kiviat writes.

This “emotional hunger,” as the researchers call it, may also contribute to other acquisitive behaviors, like looking for a new relationship or trading big on the stock market.

Shift Gears and Step Outside Yourself

The study’s findings, the researchers say, hinge on self-focus: When researchers looked at how much the participants were dwelling on themselves, they found that those who were sad but not self-focused didn’t spend as much.

Cynthia Cryder, a Carnegie Mellon doctoral candidate and co-author of the study, says that spending is a common way for people to try to breathe value into their lives, but that there are alternatives for cheering yourself up besides doling out cash.

“If you’re sad, maybe you should seek out something other than shopping. A new book to read, a new friendship. Something that’s novel and attractive to fill the need you’re seeking to fill,” Cryder told TIME.

Or, she added, break the cycle of self-focus by shifting your mindset outward and thinking about other people.

“You could try to think about others by rehearsing a series of sentences that involve others as the subject,” she said.

Or try calling a friend, Kiviat offers, “and instead of suggesting a trip to the mall, ask how her day is.”

5 Ways to Get Happy Without Spending

Next time you come down with a case of the blues, instead of throwing the credit cards in your wallet and speeding off to the mall, try some of these activities instead, that cost nothing and feel great.

Go for a walk. Sometimes just getting some fresh air and experiencing a natural environment can boost your mood. And exercise produces endorphins, which serve as natural uppers. Plan your route to go through your neighborhood or a nearby park to reduce your chances of coming across a spending opportunity.

Volunteer. As Cryder points out, shifting your thoughts from yourself to someone else can do wonders for your mood and self-esteem. Instead of buying another pair of shoes you don’t need, more downloads for your iPod, or the latest Xbox game, donate your time to someone really in need.

Get rid of clutter. Sifting through old belongings you’ve outgrown or no longer need can help you appreciate all the things you have in your life. You might even discover items you forgot you had, turning a tedious task into a home shopping spree.

Trade with friends. Gather up a group of friends and swap your give-away clothing, CDs, or anything else. You’re killing three birds with one stone: socializing, shopping, and saving.

Plant a garden. Taking responsibility for something living can feel extremely rewarding and uplifting. Gardening not only provides you with a daily activity to keep your hands — and mind — busy, but it’s good for you. The American Horticultural Therapy Association says gardens have healing capabilities, improving health and well-being.

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Student Loan Blog : spending

College Offers Students a No-Cost, No-Student-Loan Education With Funds From Its $1.1 Billion Endowment

Malls and Retail Stores a No-Go for Depressed Shoppers