The last time Cooper Union charged tuition to a full-time student was in 1902. Around then, Andrew Carnegie gave the college a gift that would allow it to meet the wish of its founder to make education as “free as air and water,” as Peter Cooper had put it. Students here—in the college’s well-known programs in the arts, engineering, and architecture—are selected based on talent and promise, not on what they can pay. At a time when tuition at some colleges has reached stratospheric amounts, Cooper Union’s cherished and lofty educational ethic is quite unusual in academe.
And it is also endangered.
On Halloween night here in the East Village, Cooper Union’s students gathered to hear Jamshed Bharucha, who has been president for merely four months, lay out some staggering facts about the institution’s finances: For years, the Cooper Union for the Advancement of Science and Art has been burning through the unrestricted part of its endowment to cover shortfalls in its budget, and his administration predicts that the cushion will be gone in two to three years.
He implored students and faculty to come up with ideas for bringing income to Cooper Union, and he broached a topic that some consider unthinkable: the possibility of beginning to charge some students tuition.
The institution has been in tight financial spots before, but has found ways to sell off or lease some of its properties, reinvest the money, and keep going. But in an interview with The Chronicle in his office in the college’s iconic Foundation Building, Mr. Bharucha stressed that the situation has become desperate.
“There are no more supercharged market returns, no more assets to sell, and taking on more debt is the only option,” he said, and that last option is unthinkable.
Mr. Bharucha is appointing a committee of students, faculty members, alumni, and others to come up with a financial solution with lasting effects. “I believe this is our last, best chance to develop a sustainable financial model. We owe it to generations of students in the future to have access to a Cooper Union education.”
Not Keeping Up
An unusual financial model supports that unusual education. Cooper Union owns the land under the Chrysler Building, and its name is on the deed to the building—assets that provide the biggest chunk of the college’s revenues. In the 2011 fiscal year, Cooper Union collected $7-million from Tishman Speyer Properties, which negotiated a lease with the college for the building. In a highly unusual arrangement laid out in the college’s charter, Cooper Union also gets the city’s real-estate taxes on the property, some $18-million this year. In recent years, the college has also set up deals to collect smaller amounts from properties it owns near the Foundation Building, on the site of an old academic building of the college and a parking lot but now leased to developers.
Altogether, real-estate earnings make up 46 percent of the college’s revenues. It also gets money from the usual sources: student housing and fees, fund raising, and investment income, which together provide another 25 percent of the college’s revenues.
The problem is that the college’s expenses have long outstripped those revenues. Last year, the deficit was roughly $16.5-million in a $60-million budget, or about 27 percent.
“That is huge. Huge,” Mr. Bharucha stressed. And it has been that way—off and on, but mostly on—for many years.
A statement released last week by Cooper Union’s Board of Trustees indicated that revenue had fallen short of expenditures every year since 2001, with a growing gap between the two over the last few years. The statement also recounted the college’s recent fund-raising woes: Its $250-million capital campaign, which ended in June, raised only $197-million.
The statement also details a $175-million loan acquired by the college in 2006; debt service demanded $10.2-million, or 17 percent, of the college’s expenses in 2011. Those debt payments retired bonds for a residence hall, supported renovations to the Foundation Building, and went to investments. The payments also provided cash flow for the construction of 41 Cooper Square, a building designed by the star architect Thom Mayne, which opened in 2009. The $166-million building is a spectacular landmark. (Tourists can be seen on the street taking pictures of it.) While Cooper Union needed a new academic building, some now wonder if this one was too extravagant for a college on the edge.
‘Builds, and Basks’
Talk of the college’s straits seemed to take people here by surprise, in part because as recently as last year the college generated good press about its financial health. An article in The New York Times in 2010 announced the retirement of then-President George Campbell Jr. and credited him with stabilizing the finances at Cooper. A 2009 article in The Wall Street Journal, which featured Mr. Campbell, said that “as many endowments suffer, no-tuition Cooper Union builds, and basks.” Through conservative investment and savvy real-estate negotiations, the Journal said, Cooper was “quietly skirting the crunch in higher education.”
Some folks here now believe they were misled. After a morning meeting about the crisis in early November, Yuri Masnyj, a Cooper alumnus and an adjunct art instructor, stood outside the Foundation Building, waiting to talk to a reporter from WNYC, the local public-radio station. “The problem has been a mischaracterization of our finances and an opacity of the previous administration,” he said, adding that someone should be accountable.
Richard J. Stock, a professor of chemical engineering and president of the faculty union, said that faculty members want more details about how the college has spent its money in the recent past—the first step in fixing the problem. “My concern is that even if we are successful in raising more revenue, it would be a shame to see it go swirling down the same drainhole,” he said.
Asked why the Board of Trustees had not sounded alarm about Cooper’s financial situation earlier, Mark Epstein, its chairman, said that had been the responsibility of the president, and that previous administrations had not wanted to air it. “Jamshed believes in more openness,” he said. “He made a compelling argument that the entire Cooper community should be aware so that we can get help from the entire Cooper community.”
Mr. Epstein added that this was not the first time the board had discussed charging tuition. “It’s just that this is the first time the discussion has gone outside of the boardroom.”
Mr. Campbell, the former president who was reached by phone in New York, said that he gave the Cooper community annual reports about the college’s precarious financial situation. If people now feel they weren’t informed, he said, “they have some responsibility for that.” And he insists that he left Cooper in a better place than he found it in 2000, when the college had only enough money to last a few months.
Of the events now unfolding at Cooper, he had a reservation: “I think it is a mistake, frankly, that this conversation is being held publicly,” he said. “They haven’t made any decisions yet, and yet I am sure the phones and e-mails are bubbling over with comment.... It’s hard to make good, sound, data-based decisions when you have that kind of public discourse.”
He was sure, however, that the Cooper community would come up with ideas for income. “I don’t think that it is hopeless, and I don’t think that you have to resort to changing the mission and to start charging tuition.”
Daunting Task Ahead
Mr. Bharucha, who was the provost at Tufts University before coming to Cooper Union, said he did not know the full dimensions of the college’s crisis when he took the job. He has decided to make openness a central characteristic of his administration, a policy that has earned praise from many students and faculty members.
The job ahead is daunting, but Mr. Bharucha tossed out some possibilities: There is room for growth in fund raising—20 percent of the college’s 12,000 alumni gave last year—although that is not a sustainable solution year to year. There might also be room for growth in research grants, but it would take time to build up a steady stream of grant money, and there are always questions about whether that money actually helps the bottom line.
Cooper Union could take a shot at generating income through technology transfer, although that’s a gamble at best. Online and adult education holds possibilities; Cooper Union already charges tuition for certificate programs and one-off classes in various disciplines.
Or the task force and the Cooper Union community could come up with something entirely new. “It’s a huge opportunity to innovate at a time that all of higher education is at a watershed moment,” Mr. Bharucha said. “Not in 50 years has higher education been under such strain and stress and attack.”
For guidance and inspiration he has been looking back at the life and philosophy of the founder, Peter Cooper, a wildly progressive, innovative, and entrepreneurial man for his time. He made a fortune in ironworks and real estate, developed the first American steam locomotive, and laid the trans-Atlantic telegraph cable, yet had little formal education. In a New York divided at the time between wealthy and working class, he believed that education was a key to upward mobility. And his views were inclusive: Cooper Union was open to women from its beginnings in 1859—in fact, Cooper inspired the brewing magnate Matthew Vassar to establish a college for women. Cooper also supported the rights of African-Americans and Native Americans, and the “union” in the college’s name reflected his support for the North’s cause in the Civil War.
Asked if charging tuition to some students would defy Peter Cooper’s vision, Mr. Bharucha said: “It certainly goes against the culture of the institution for a little more than a century.”
Although Cooper dreamed of an education program as freely available as air and water, that wasn’t always the reality at the college, Mr. Bharucha said. Before the Carnegie gift, the wealthy (then referred to as the “amateur classes” in the college’s early documents) paid for their education, while the working classes enrolled free of charge.
Higher Education’s ‘Bulwark’
In the East Village, which is decked out in guerilla street art, one artist has made a statement that encapsulates a problem facing Cooper Union. A series of posters shows people wearing gas masks, but the air canisters are modeled on popular brands of bottled water: “Poland Spring Air,” “SmartAir,” “Eviair.” Something we once accepted as a birthright—air, water, or perhaps education—is now just another commodity.
People don’t seem to worry that Cooper Union—at least in structure and name—will disappear. But they do worry that if Cooper Union starts charging for its education, a fundamental principle at the college will be lost. For Mr. Masnyj, the full-tuition scholarships offered by the college represent something significant in academe: “It is a bulwark against the commercialization and commodification of higher education.”
Echoing many other students here, Olivia Ahn, who is in the architecture program, said the scholarships for all students at Cooper promote an egalitarianism that keeps students focused on their studies. While other colleges have had to attract students with frills like fancy recreation centers and climbing walls, she said, Cooper Union hasn’t been able to afford those things, and has never needed them anyway because its students are so serious about their work.
Elizabeth O’Donnell, an associate dean in the architecture school, said Cooper Union will turn to tuition only as a last resort. She thinks people in the Cooper community will come up with viable ideas to preserve the full-tuition scholarships.
She is concerned that people will wonder what the fuss at Cooper Union is all about. Some might think that a free college education is a luxury in a country that lately has become resentful of luxuries. But she says Cooper Union represents access to higher education at a time when even public education is becoming less affordable.
“I would certainly hope that anyone who is interested in education in America would get what’s at stake here,” she said. “We hope that people aren’t saying, ‘Oh, why don’t they just charge tuition.’ We hope people say, ‘Higher education needs that model to stay alive.’”
