Using the Endowment Wisely

Last week the University announced that its endowment had topped $19 billion, outperforming almost all benchmark investment goals as a result of outstanding returns from venture capital investments. In celebration, the University intends to share the news with more than 1,000 overseers, fellows and other prominent alumni. The stunning news should, at the very least, prompt the University to spend more money. Harvard's endowment payout is typically lower than most other colleges and universities. These extraordinary investment returns, coupled with signs of a healthy national economy, supports a more generous endowment spending policy.

Furthermore, there are four areas to which the money should unequivocally be directed: an undergraduate student center, financial aid returns, the endowment of professorships and the improvement of undergraduate housing conditions.

A substantial portion of the University's newfound wealth should be directed toward student groups and, ultimately, toward the construction of a student center. Building space has long been a contentious issue on campus--from providing the faculty with office space to securing performance stages for student dramatic productions--but the University has the opportunity to construct a center for students that would foster community among undergraduates. Student groups are the spirit of undergraduate life on campus, and the University should commit itself to establishing a centrally-located community for our activities. Even if construction is not a viable option because of limited property space, the University could convert the Inn at Harvard--which will be in Harvard's hands in 13 years--into a student center.

Part of the $19 billion endowment should also come in the form of financial aid return to students. Graduates of the Class of 2000 who took student loans from the University are at an average debt of $14,487, and they could spend the next 10 years paying Harvard back. Even more daunting, this debt follows Harvard's 1998 financial aid increase that allowed many students to reduce their annual loan requirement by $2,000. Although Harvard boasts a low default rate, the prospect of paying back the University upon graduation is a daunting one. Again, the University is poised at a more than comfortable financial position to assist its students in paying off their monetary debts--and it should. By last June, the University had raised $225 million for financial aid during the Capital Campaign. Harvard should grant its students another reduced annual loan requirement within the next year.

As part of its efforts to constantly improve the quality of undergraduate education at Harvard, the University should allocate campaign money towards the endowment of professorships on campus. Money has already gone toward 28 new faculty positions and an increased number of teaching fellows in order to decrease the size of course section meetings. Last May, Rudenstine said goals for his last year at the helm included the endowment of more professorship on campus. We look forward to this goal's actualization with much anticipation.

Undergraduate housing is bursting at the seams, and House resources are spread too thin. Both students and House Masters have complained about the quality of undergraduate housing. In several houses, for example, rooming shortages have cause singles to be converted into one-room doubles. The University has claimed that a 13th undergraduate house is not a viable option. If this is the case, money should at least be allocated toward expanding the resources of existing Houses.

The University is celebrating, as it should, its successful investment returns. But while the spirits at University and Massachusetts Hall are still high, Harvard should pay heed to the significant needs and genuine desires of its undergraduates.