For generations, most big gifts to universities have gone to erect buildings, seed research centers, or boost athletic programs, burnishing the resources of higher education institutions. But now students — and their tuition burdens — are winning some love, too.
Over the past few years, a spate of multimillion-dollar donations has gone directly to students — specifically those from low- and middle-income homes in the form of a tuition-free or low-cost education. Since 2018, for example, Home Depot co-founder Ken Langone and his wife, Elaine, have given $300 million to New York University’s medical schools, guaranteeing a tuition-free education for health-care workers.
Dartmouth College received a similar gift in March — $150 million from Dartmouth alum and former Time Warner Cable CEO Glenn Britt and his wife, Barbara, for financial aid for students from middle-income families. In January, businesswoman Ronda Stryker and her husband, William Johnston, chair of Greenleaf Trust, gave $75 million to Spelman College for endowed scholarships. And in March, Ruth Gottesman donated $1 billion for tuition-free education at the Bronx’s Albert Einstein College of Medicine, where she had been a professor.
The largest of these tuition-related gifts is the $1.8 billion that financial-data pioneer Michael Bloomberg, via Bloomberg Philanthropies, gave to his alma mater, Johns Hopkins, in 2018 — the largest gift ever to a U.S. academic institution — solely for financial aid for academically qualified low- and middle-income students admitted to the university.
These donations come amid rising student loan debt — $1.727 trillion spread among 43.2 million borrowers — as well as rising tuition and living costs. Experts predict the total cost of attendance at some private universities and colleges could surpass $100,000 a year before the end of the decade. Next fall, the estimated annual cost to attend Tufts University will be nearly $96,000 and Wellesley College will charge $92,000.
While most donors regard free or reduced tuition as a way of increasing diversity on university campuses and accelerating socioeconomic mobility, there’s an emerging debate about the best way of achieving those goals. Donors have tended to direct money toward the ultra-selective elite institutions they attended decades ago. But there’s growing interest in supporting less famous colleges with higher admissions rates, where a wider cross-section of students can thrive.
“America is at its best when we reward people based on the quality of their work, not the size of their pocketbook, Bloomberg wrote in a New York Times op-ed announcing his donation. “Denying students entry to a college based on their ability to pay undermines equal opportunity.”
Previous to Bloomberg’s $1.8 billion gift, the norm for a big higher education donation was around $100 million, said William Foster, a managing partner at the Bridgespan Group, a philanthropy consultancy.
“I do think it’s a trend,” said Foster regarding tuition-related donations. “But you’re not going to see a hundred $1 billion gifts next year. That’s not going to happen.”
A ‘Transformed’ Student Body
Bloomberg, a former New York City mayor and co-founder of the financial information and media company Bloomberg LP, has a net worth of roughly $106 billion, according to Forbes. His Bloomberg Family Foundation, one of the main engines behind Bloomberg Philanthropies, held $11.5 billion in assets in 2022.
Bloomberg has a long history of giving to his alma mater. He donated about $1.5 billion to Johns Hopkins to support the construction of a cancer treatment center and a children’s center and for undergraduate financial aid, among other things. The $1.8 billion gift is explicitly designed to ensure Johns Hopkins — one of the top research universities in the world — becomes permanently need-blind and provides financial assistance to low- and middle-income undergraduate students in the form of grants rather than loans for decades to come.
Johns Hopkins and Bloomberg Philanthropies report that in the five years since the gift was made there has been a spike in socioeconomic diversity, along with higher academic performance. Among the incoming Johns Hopkins undergraduate class of roughly 1,300 students, the percentage of first-generation students jumped from 11.8 percent in 2018 to 19.4 percent in 2023. Separately, data show the percentage of students considered first-generation and/or limited-income (meaning they have little to no family contribution for tuition and have limited access to other funding) as surged from more than 20 percent to nearly 30 percent during that same period. Further, the percentage of students qualifying for federal Pell Grants increased by more than 6 percent in the past five years. At Johns Hopkins, 80 percent of all Pell-eligible students come from families earning less than $90,000 a year.
Johns Hopkins administrators report that, thanks to the Bloomberg gift, the university has been able to provide an average grant award of $60,000 to qualifying members of the 2023-24 freshman class compared with the $44,886 awards it provided in 2018. Other grants and scholarships, such as federal Pell Grants, are often used to cover remaining costs for students.
“The magic of our program is that we are not only need-blind in admissions but we meet 100 percent of a family’s demonstrated need — meaning, we are looking at their financial circumstances and determining what they’re able to pay, what we think they’re reasonably able to pay, and they only pay that,” John Hopkins Vice Provost David Phillips said. “We fill the rest with financial aid.”
Phillips added that the $1.8 billion gift has “transformed what we’re able to do, and it’s transformed our student body.”
Johns Hopkins had been working toward this admissions pivot for more than a decade. In 2014, the university ended its practice of using legacy status as a factor in admissions, to provide equal opportunities for applicants no matter their family’s alumni status.
In line with other colleges and universities, Johns Hopkins’s tuition has risen briskly. Undergraduate tuition and fees increased from $43,390 for the 2012-13 academic year to $62,840 for the 2023-24 year.
Phillips believes philanthropy is able to “step into the breach” to reduce tuition for low- and middle-income students as the cost of higher education rises.
While the rising “sticker price” of college attendance is what tends to catch people’s attention, the net price a student will pay to attend a post-secondary institution after receiving financial aid hasn’t increased by as much, said Sarah Reber, an economics studies fellow at the Brookings Institution. But there are still “serious affordability problems,” especially for lower-income students, said Reber, whose research focuses on college access, education finance policy, and school desegregation.
“There is financial aid, so that big $100,000 number isn’t that relevant,” she said. “But it is also important to say that many, many times the financial aid is not enough to make it affordable for students who are low-income,” especially to offset the cost of living expenses.
The Meritocracy Wars
As tuition support gains favor, private, prestigious institutions are the most frequent beneficiaries, which troubles some higher education advocates. When Bloomberg’s donation was announced in 2018, some pointed to the hurdles some low- and middle-income students face applying to and getting into Johns Hopkins and similar universities.
Sara Goldrick-Rab, then a Temple University professor studying higher education and sociology, told the Chronicle of Higher Education that she felt “sick to my stomach” and “deeply disappointed, yet totally unsurprised,” that Bloomberg chose Johns Hopkins as the recipient of money to help historically disadvantaged students gain a better foothold in higher education. She questioned why he hadn’t donated to the University of Maryland-Baltimore or a public system like the City University of New York. Goldrick-Rab is currently an educational consultant and adjunct professor at the Community College of Philadelphia.
By contrast, so-called promise programs offer tuition support at a wide range of institutions. For instance, Kalamazoo Promise in Michigan is a scholarship program funded by an anonymous group of donors that covers 100 percent of tuition and fees for graduates of the city’s public schools to attend a range of colleges or universities in the state.
Kalamazoo Promise has awarded more than $200 million to over 8,100 students since it started in 2005. The program has partnered with the nonprofit W.E. Upjohn Institute for Employment Research to analyze data on its scholarship recipients. The most recent data shows that Promise students used the scholarships to attend state-supported community colleges and universities in Michigan as well as 15 private colleges that are part of the Michigan Colleges Alliance.
More on Higher Ed Philanthropy
Recent decades have seen the emergence of scholarship programs supported by donors, such as Warren Buffett and the Bill & Melinda Gates Foundation, that target high-achieving, low-income students, noted Michelle Miller-Adams, a senior researcher at the Upjohn Institute, which has been tracking the national trend toward tuition-free education. “That’s a worthy endeavor,” she said. But when you give money to institutions such as Johns Hopkins or Einstein, you’re already screening out a lot of lower-income, lower academic-achieving students because they won’t get into those schools, she said.
By contrast, many of the state-level scholarship programs are trying to broaden the pipeline of who attains a post-secondary education, not just bring down the financial barriers, Miller-Adams said.
Bloomberg has indicated he shares that goal.
“If we want America to remain the world’s greatest meritocracy, a place where the American dream isn’t defined by class or color, then educational institutions must lead the way,” he wrote in an April 3 LinkedIn post in support of the D.C.-based nonprofit the American Talent Initiative, which has received $33 million from Bloomberg Philanthropies. ATI is a coalition of 140 colleges and universities whose mission is to expand higher education access for low- and moderate-income students.
Bloomberg Philanthropies also donated $20 million to Princeton University in 2021 to boost support for first-generation and low-income students and has poured nearly $90 million into its CollegePoint program, which provides free virtual college counseling and financial aid tips for low-income, first-generation students, said Rachel Nagler, a spokesperson for Bloomberg Philanthropies. Michael Bloomberg also has invested $355 million in career and technical education since 2016, she added.
In January, Bloomberg Philanthropies announced a $250 million initiative to create new high schools focused on preparing students for high-demand health-care jobs.
No one knows whether large tuition-related gifts will continue to rise with the cost of higher education or other factors.
But Foster of the Bridgespan Group notes that wealth has increased “enormously” over the past five years and the holders of that wealth, particularly those giving tuition-related donations to universities, seem to want their gift to achieve “something specific and enduring.”
Reporting for this article was underwritten by a Lilly Endowment grant to enhance public understanding of philanthropy. The Chronicle is solely responsible for the content. See more about the Chronicle, the grant, how our foundation-supported journalism works, and our gift-acceptance policy.