Berea College, where students pay no tuition but work, is an example in debate over endowments

Berea College, at the edge of the hilly Cumberland Plateau in Kentucky, says it offers "the best education money can’t buy" because it charges no tuition and accepts only students from low-income households. "Actually, what buys that education is Berea’s $1.1 billion endowment, which puts the college among the nation’s wealthiest," writes Tamar Lewin of The New York Times. "But unlike most well-endowed colleges, Berea has no football team, coed dorms, hot tubs or climbing walls. Instead, it has a no-frills budget, with food from the college farm, handmade furniture from the college crafts workshops, and 10-hour-a-week campus jobs for every student." (Encarta map)

Lewin and the Times offer her story as a contribution to "the growing debate over whether the wealthiest universities are doing enough for the public good to warrant their tax exemption, or simply hoarding money to serve an elite few. As many elite universities scramble to recruit more low-income students, Berea’s no-tuition model has attracted increasing attention." Congress may require large college endowments to spend at least 5 percent of their assets each year, as foundations must.

Berea President Larry Shinn opposes the idea "but wants colleges pushed to do more for needy students," Lewin reports, quoting him: “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 Joneses? We are a tax-exempt institution, so I think the public has a right to demand that our educational mission be at the heart of all of our expenditures.”

Our favorite parts of the story are those about Berea: "This year, the college accepted only 22 percent of its applicants. Among those accepted, 85 percent attended Berea, a yield higher than Harvard’s. Berea can be a haven for the lower-income students at high schools where expensive clothes and fancy homes demarcate the social territory," Lewin writes. "With its hilly campus, Georgian president’s mansion and old brick buildings, Berea looks much like any elite New England college. But its operating budget is less than half that of Amherst [College], which has a $1.7 billion endowment and about 100 more students. Faculty pay is much lower, and the student-faculty ratio higher. With no rich parents and no legacy admission slots, fund-raising is far more difficult at Berea." (Read more)