Higher education is fundamentally broken. Over the past four decades, the cost of a college education has increased by over nine hundred percent, while wage inflation has increased by only two hundred and sixty. It is becoming increasingly difficult for families to pay for college, and as a result, students are often forced to take out loans for their education, resulting in almost two trillion dollars worth of student debt nationwide.
Hope College aims to change that. When Hope President Matthew Scogin was sworn into office in 2019, he brought with him a dream of tuition-free higher education. In his eyes, the current model for financing education doesn’t align with Hope’s Christian roots. College, he says, shouldn’t be a transactional commodity. Instead, a college education should be a gift, one funded through the generosity of others.
“Why can’t we fund a Christian education in the same way a church is funded?” asks Scogin. “Nobody pays an entrance fee to go to church. Nobody takes out a loan [to] go to church. A church is funded through gifts.”
Backing up this dream is a revolutionary new business model: Hope Forward. The Hope Forward model will work by using alumni donations, rather than the contributions of current students, to fund Hope College.
Hope College’s Chief Financial Officer Tom Bylsma explains how the college is funded in terms of a pie chart. Each year, almost seventy five percent of Hope’s income comes from tuition and room and board. These are referred to as student/family payments as they are covered by the students themselves.
Another major part of Hope’s operating budget, sitting at around fifteen percent, is its yearly endowment draw. An endowment is a pool of money that is invested and managed according to the will of its donors. Hope alumni give money to a fund, which is then grown through careful investment. Any extra money at the end of the year is withdrawn from this account. This withdrawal is used to lower student tuition by covering some of Hope’s operating expenses.
Beyond the endowment, Hope’s revenue stream is also made up of annual contributions by Hope alumni, as well as other sources such as government grants.
In order to reach the goal of zero tuition for students, the entire percentage of tuition funded by student/family payments must disappear. However, the costs cannot simply vanish. Scogin stresses that making college cheaper is not an option. Quality education is not something that can be done cheaply.
“We have to somehow replace [tuition] revenues with something else,” says Bylsma, “and that something else is through the generosity of donors, and eventually through the generosity of you.”
Currently, the philanthropy portion of Hope’s revenue accounts for only around fifteen million dollars worth of expenses. It’s going to need to be a lot larger in order to cover tuition. Fortunately, there are a few smaller goals that can be accomplished first.
“First, we would love to meet the full need for all of our hopeful students,” says Tom Bylsma.
As Bylsma explains, almost all students have some level of financial need. Most families cannot pay for a Hope education on their own, so the college steps in and provides assistance when possible, using the FAFSA form to calibrate each individual’s aid. Unfortunately, there simply are not enough resources for everyone. As a result, the college only covers partial needs, and students are forced to take out loans to cover the rest.
The Hope endowment currently sits at around three hundred million dollars. If it were four hundred million, its yearly draw would be around five million dollars. This would be enough to cover full need for all students.
However, meaningful need according to FAFSA still has a debt component to it. The next goal for Hope Forward would be eliminating loans altogether by covering anything that a student could not pay out of pocket. To do so, the endowment will have to grow by another one hundred and fifty million dollars.
The final step, of course, is to create a system in which the draw from the endowment is large enough to cover all student tuition. Student/family payments would disappear, replaced entirely by philanthropy.
This is, as Bylsma puts it, a “god-sized goal,” requiring the endowment to grow by over one billion dollars.
The staggering size of the goal is not the only challenge facing Hope Forward. Thirty years ago, over fifty percent of Hope Alumni donated to the college in some way. Now, the number is down to just over ten percent. The revenue we receive from alumni donations has fallen from almost three million dollars to just one point nine. In a situation where alumni should be acting as a solution, their inaction seems to only deepen the problem.
Part of the reason for this lack of generosity is the enormous financial burden of student loans, says Scogin. Older alumni who have been donating typically stay in their habits and continue to contribute to the college. However, new alumnus are less likely to donate while still paying off student loans, hurting the numbers.
“[Philanthropy] is a tough sell when so many are struggling just to pay the… tuition that they have,” says Bylsma.
Fortunately, both Bylsma and Scogin are confident that this trend can be turned around. For starters, Hope Forward solves its own issue, removing student loan debt and making people more willing to donate to the cause. Over time, the program will improve itself.
More than that, however, Scogin is confident in the values of generosity and community instilled in current Hope students. He hopes that the experience and culture of our school today will make future alumni more willing to donate, even in small portions.
“It’s not so much the dollar amount as much as the pattern of giving,” says Scogin. “Can we fund an education not through paying bills… but through generosity? That’s the culture shift that we’re really after.”
(Photo credit: Hope College website)