Endowment grows 6.7 percent, likely placing NU within new endowment tax threshold


Newly-published figures by the Northwestern Investment Office indicate the University’s endowment has reached the threshold for a new endowment tax enacted Dec. 22 as part of the Tax Cuts and Jobs Act. University officials are still uncertain, however, what impact the tax will have on NU.

The Office published on its website that the endowment had grown to roughly $10.5 billion at the end of August 2017, completing the fiscal year with a 6.7 percent growth rate — up from last year’s $9.8 billion value.

The new figure suggests NU could join other private colleges — those with more than 500 students and assets with a market value of at least $500,000 per full-time equivalent student — in paying the 1.4% excise tax on annual net investment income.

The University currently reports 20,500 full-time equivalent students, meaning its assets have an estimated value of $510,000 per student. This figure could qualify NU for the tax beginning as early as next year.

Jonathan Yates, director of media relations for NU, told The Daily last week it wasn’t clear if the University would be immediately subject to the tax. The previously-reported figure of $9.8 billion would have placed the endowment’s value at roughly $480,000 per student — just under the tax threshold.

Al Cubbage, vice president for University relations, echoed Yates’s uncertainty in a Friday email to The Daily. Despite the new figure, he said, it’s still unclear to the University whether it will begin paying the tax this upcoming year.

With an endowment that has grown more than 10 times its size since 1991, however, it looks like Northwestern will eventually face the tax.

“We anticipate that the University would be (subject to the tax) in subsequent years, assuming the endowment continues to grow,” Cubbage said. “When that occurs, we’ll pay the tax. But we don’t know precisely what the impact may be.”

Critics have said that impact may include a decrease in financial aid for low-income students and fewer donations, as some may prefer money meant to fund the University not go to the federal government.

Cubbage declined to comment further, saying some answers to questions were unavailable due to office closures for the winter recess.

Whether NU pays the levy for the 2018 tax year, he said, will depend on how the federal government defines three key terms: the base year, the endowment and the number of students.

The reported figure of 20,500 NU students is based on the commonly used metric of full-time equivalent students, which calculates the number of average full-time students by taking into account the course load of part-time students.

Though it’s likely the federal government will continue to use this measure, the language remains vague and the Internal Revenue Service has not yet released clarifying information about the new law.

The law defines the number of students of an institution as the “daily average number of full-time students.” The metric would take into account part-time students “on a full-time student equivalent basis.”

What assets will be considered part of the endowment is also unclear.

The law calculates the value of endowment at the end of the tax year using the “aggregate fair market value of the assets,” excluding those “that are used directly in carrying out the institution’s exempt purpose.”

The IRS said in a statement it is withholding guidelines for the new tax law until January.

Email: alanperez2020@u.northwestern.edu
Twitter: @_perezalan_

The post Endowment grows 6.7 percent, likely placing NU within new endowment tax threshold appeared first on The Daily Northwestern.

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December 31, 2017 at 06:47PM

Endowment grows 6.7 percent, likely placing NU within new endowment tax threshold

SIUC students walk out, say tax plan ‘destroys’ higher education


Graduate students at Southern Illinois University Carbondale joined hundreds of others from across the country in a walkout on Wednesday to protest a tax plan by House Republicans.

“This destroys the idea of a graduate employee income that could potentially support graduate students through their education, and it destroys the idea that working people can go and get a graduate-level education and can participate in innovative and scientific communities,” one of the SUIC organizers Sam Smucker told the Southern Illinoisan.

The bill would classify graduate students’ tuition waivers as taxable income. Graduate students often get tuition waivers and a stipend for their work teaching and as research assistants.

Nearly 145,000 graduate students received tax exemption waivers in 2011 and 2012, according to the American Council on Education.

“The graduate tuition waiver is not income. This is not a salary. I don’t see that money. … Nobody else, anywhere, pays $25,000 just to park at their job,” said Andy Harper, a doctoral student.

More importantly, Harper told The Southern Illinoisan, graduate students teach classes that professors are unwilling to teach.

“Our prolific, highly published, kickass, academically influential faculty are not going to hang around to teach 101 or 102, nor should they, because the world progresses and our nation progresses when they are doing the work in their fields, not covering basic composition,” Harper said.

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November 30, 2017 at 11:52AM

SIUC students walk out, say tax plan ‘destroys’ higher education

IL Comptroller visits SIU to speak on budget


IL Comptroller visits SIU to speak on budget

(Source: KFVS)
(Source: KFVS)


The Illinois Comptroller visited Southern Illinois University to talk with students about some of what she’s been able to accomplish regarding the Illinois state Budget.

Susana Mendoza said she’s had a busy fiscal year. Not only has she been using proceeds from the recent General Obligation bond sale to pay down a huge portion of the state’s unpaid bills, she was also able to override Bruce Rauner’s veto of the Debt Transparency act.

“For me I feel grateful having this relief after having worked very hard to convince the governor to finally to finally do it but we are here,” Mendoza said. “Its one step in the right direction, debt transparency another step in the right direction. there are many more steps in the right direction but I’d be happy to lead the way.”

Mendoza has been the Illinnois Comptroller since last year.

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November 14, 2017 at 10:52PM

IL Comptroller visits SIU to speak on budget

NIU cuts out-of-state tuition to lift enrollment


NIU’s Holmes Student Center rises above the center of campus. (Photo by Jack McCarthy / Chronicle Media)

With enrollment down by more than 7,000 students in the past decade, Northern Illinois University is looking to recruit out-of-state for a boost.

The NIU Board of Trustees last week approved a new domestic rate structure for tuition that will set out-of-state tuition for domestic students at the equivalent of the in-state tuition rate, effectively making NIU more affordable to U.S. students from outside Illinois.

The change will apply to domestic students enrolled as NIU undergraduates or through the NIU Graduate School. It will take effect beginning with the fall 2018 semester.

Freshman enrollment this fall was up for the first time in six years, but NIU still reported an enrollment of 18,042 in September, the eighth straight  year of declines. The university had a enrollment of of 25,242 in 2007. 

Currently, full-time domestic undergraduates from outside of Illinois are assessed roughly double the in-state tuition rate, with the exception of students from six Midwestern states who pay a premium of 40 percent above the in-state rate. Similarly, out-of-state full-time domestic students enrolled through the Graduate School are assessed higher tuition rates than their Illinois peers.

Board Chair Wheeler Coleman hailed the change as an exciting moment for the university.

“We believe that moving to this new structure is better for all of our students, as well as the university and our state,” he said.

Sol Jensen, NIU vice president for Enrollment Management, Marketing and Communications, said the change will enhance enrollment by making NIU a much more attractive option for students from around the country.

“When you look at other universities in the greater Chicago area—public and private—this immediately makes us a far more affordable and accessible alternative,” Jensen said. “We offer outstanding programs in high-demand fields in a traditional university setting that sits on the doorstep of Chicago. Students get to enjoy the lifestyle of a large, rural Midwestern university, while still having the opportunity to experience internships, employment and the cultural life of one of the world’s great cities. We believe it is a combination that students from other states will find very attractive.”

Jensen also noted that Illinois has led the nation in population decline in recent years and is among the largest net exporters of college freshmen to other states. Ultimately, the change should help strengthen the state’s workforce by attracting talented individuals who are then more likely to live and work in the region, he said.

While the prospect of attracting more out-of-state students is exciting, Freeman said the new tuition-rate structure in no way signals a change in the university’s traditional mission.

“We will continue to focus the majority of our recruitment efforts on expanding enrollment of students from our home state—that won’t change,” she said. “This will not reduce opportunities for students from Illinois to enroll at NIU, and will only enrich the experience they receive by making our campus more geographically diverse.”

While the Board of Trustees today approved the new tuition structure, actual tuition rates for FY19 will be proposed in December.


NIU cuts out-of-state tuition to lift enrollment–

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October 23, 2017 at 12:37PM

NIU cuts out-of-state tuition to lift enrollment

MAP Grant funding available to Lake Land College students


The recently passed Illinois state budget means Lake Land College students who qualified for financial aid from the state will receive it for the 2017-2018 school year.

This form of financial aid is called the MAP grant and it does not have to be repaid. To help students who are making higher education decisions for fall 2017, the college is applying MAP grants to accounts for students who qualify.

Students can check their MAP grant status by logging into their Laker Hub account and selecting �Financial Aid� under the IRIS menu on the left and then �Award Letter.� While in the Laker Hub, students can register for New Student Orientation or call 217-234-5301.

For many students, a MAP grant combined with a Pell grant, both of which do not have to be repaid, will cover all tuition and fees for Lake Land College for the year. Tuition and fees for one year are about $3,900, nearly a fourth of tuition and fees at the average state university.

Lake Land College assures students who qualify will receive the MAP grant financial aid for the fall 2017 semester, which starts Aug. 21. There is plenty of time for new students to get started! Visit lakelandcollege.edu and look for the �Enroll Now� button or call 217-234-5254.

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July 21, 2017 at 03:28AM

MAP Grant funding available to Lake Land College students

Illinois is so horrible that it’s dragging down national higher ed averages


* InsiderHigherEd

It’s impossible to examine state higher education finances in 2016 without separating the collapse in Illinois from a more nuanced picture across the rest of the country.

State and local support for higher education in Illinois plunged as the state’s lawmakers and governor were unable to reach a budget agreement and instead passed severely pared-down stopgap funding. Educational appropriations per full-time equivalent student in the state skidded 80 percent year over year, from $10,986 to $2,196. Enrollment in public institutions dropped by 11 percent, or 46,000 students.

That situation proved to be enough of an outlier that it weighed down several key markers in the 2016 State Higher Education Finance report from the State Higher Education Executive Officers association, which is being released today. The report annually offers an in-depth look at the breakdown of state and local funding, tuition revenue, enrollment, and degree completion across public higher education, a sector that enrolls roughly three-quarters of students in U.S. postsecondary education.

Include Illinois in the report’s key markers, and overall public support for higher education fell by 1.8 percent per full-time equivalent student in 2016, to $6,954, according to the report. Exclude Illinois, and overall support increased by 3.2 percent, to $7,116.

Mind boggling.

The full study is here.

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April 20, 2017 at 01:52AM

Illinois is so horrible that it’s dragging down national higher ed averages

ISU investment rating under review by Moody’s


NORMAL — Moody’s Investment Service is reviewing Illinois State University and five other schools for a possible credit rating downgrade, but university officials are confident ISU can retain its current rating.

Moody’s said the review was prompted by the state’s failure to enact a budget providing full operating funding to the university for the current fiscal year.

The review affects about $2.2 billion of public university debt, according to an announcement from Moody’s.

Greg Alt, retiring vice president for finance and planning at ISU, said Wednesday, “We feel confident we’ll hold the rating.”

Alt said Moody’s reviews universities regularly but, “It’s just a little more formal review this time.”

The rating affects both existing debt and future debt.

If ISU’s rating is downgraded, “the cost of borrowing money is higher,” said Alt.

The university is not doing any capital projects requiring new debt, he said, and funding is already in place for the planned Bone Student Center renovation.

However, Alt said, “we’re beginning work on refinancing the Cardinal Court project. We would like to proceed with that by fall.”

A downgrade would impact that but Alt emphasized, “We’d still be able to issue debt. … We’re still investment grade.”

ISU has a rating of Baa1 for Auxiliary Facilities System Revenue Bonds and Baa2 for Certificates of Participation.

The auxiliary facilities bonds received a higher rating because they involve restricted funds for residential and athletics facilities, Alt explained. The certificates are covered by general revenue, which is more affected by state funding.

Among the state’s public universities, only the University of Illinois has a higher rating from Moody’s than ISU.

The U of I is part of the review announced Monday, as are Eastern Illinois, Southern Illinois, Northern Illinois and Governors State universities.

Northeastern Illinois University’s Certificates of Participation were downgraded from Baa2 to B1 on Monday by Moody’s.

The review will include budgeted fiscal 2018 operations and assumptions and an assessment of near-term debt service commitments against pledged revenues and related reserves, according to Moody’s.

Some schools could see their ratings drop by more than one notch “depending on liquidity and ongoing ability to adjust to the prolonged lack of state operating funding,” Moody’s said.

Alt’s optimism about ISU’s rating relates to its steady enrollment and contingency plans the university has developed “even if state funding is delayed or reduced,” he said.

“We’re able to demonstrate how we’re managing the situation,” said Alt.

Follow Lenore Sobota on Twitter: @pg_sobota

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April 20, 2017 at 01:10AM

ISU investment rating under review by Moody’s