‘Unique history,’ focused financial management keep Berea College tuition-free after 125 years

Thanks to careful planning and an unyielding sense of purpose, Kentucky’s Berea College has not charged students tuition since 1892 and provides every student with an on-campus job—a model both inspirational and difficult to reproduce at other colleges and universities, The Atlantic reports.

Founded in 1855 by abolitionist John Fee as the South’s first integrated college for men and women, Berea College has been tuition-free since 1892. It enrolls a diverse student body that is 90 percent low-income, with nearly two-thirds of students coming from Appalachia. The college ensures that every student has a paying job—a practice that dates back to the school’s founding—which helps students pay for living expenses. As a result, almost half of Berea students have no debt, and average debt for the remaining students is less than $7,000.

Berea’s unique model was made possible by a 1920 decision by the college’s board of directors to allocate all unrestricted bequests to the endowment, which today is worth $1.2 billion and spins off income that covers 75 percent of Berea’s operating costs.

‘Not the kind of institution that holds the world of finance in disdain’

Relying on endowment income rather than tuition makes Berea unusually dependent on the performance of the stock market for its survival. Market downturns forced college leaders to consider charging tuition at a few points in the school’s history—including during the Vietnam War, after the September 11th attacks, and during the 2008-9 financial crisis—but “every time they decided against it,” according to The Atlantic.

The contingency plan for a major market-induced crisis aims to sustain the tuition-free commitment: first, the college would cease all but critical renovations, then eliminate discretionary spending, then freeze hiring and salaries. According to the chief financial officer, charging even a small amount of tuition would change the school’s identity, making it “just like any other college.”

Why can’t more schools go tuition-free?

There are significant obstacles preventing other schools—even those with very large endowments—from going completely tuition-free, The Atlantic reports. Berea “has been building this model for more than a century,” which has allowed it to establish contingency plans and some financial cushion; a school attempting to convert to this approach without decades of financial planning could be destroyed by a recession. Meanwhile, most institutions that have built traditional endowments can’t simply convert them to tuition support because of legal agreements with donors governing how their donations will be used.

But The Atlantic notes that a few schools are emulating aspects of Berea’s approach. Princeton, Brown, and Cornell universities have gone tuition-free for low-income students. And Paul Quinn College, an HBCU in Dallas, turned around its fortunes by becoming the nation’s first urban work-college, employing its students on campus in an effort to reduce debt and integrate learning and professional experience.

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