Chapter 1:
The Code Broke!
Cooper Union is a private college in NYC. It is located at Cooper Square on the border of the East Village. It is my alma mater, and I was lucky to receive a 4-year, full tuition scholarship. As a matter of fact, all my classmates, and all students, received the same full scholarship.
Well, it turns out that Cooper is the only free college in the country. If you google it you’ll surely get a list of 14 free higher ed options, but each one with a catch — they are either not open to all students (location, gender), are not ranked, or have other strings attached.
And the beautiful thing about Cooper is its tradition — a tradition of free tuition for over 100 years, in Engineering, Architecture, and the Arts. Alas, in 2014 this legacy, this code, broke; the college announced, out of the blue, that it is going to charge tuition effective immediately.
So what really happened here??
Well, to understand what happened, and why the Attorney General and the court decided what they decided, we need to go back in time and find who was Peter Cooper.
Chapter 2:
The Legacy of Peter Cooper
Who was Peter Cooper?
An inventor, engineer, self-made billionaire, and most compassionate person and philanthropist. Peter Cooper was born in 1791 in New York, and grew up in poverty. He even had to quit school in order to help his family make a living. Nevertheless, those circumstances did not slow down his drive, tenacity, and genius, and at the age of 13 he already invented a mechanical clothes-washing machine. He was a truly self-taught student and budding businessman; while working long hours during the day, he managed to borrow books and continued to study on his own at night.
His first commercial success was a glue factory, and then, thanks to his technical genius and foresight, he made incredible fortune from numerous inventions and investments, including:
- Iron and steel
- Railroads
- The first steam-engine locomotive — “Tom Thumb”
- Telecommunication
- And of course Jell-O !
Nearing sixty, Peter Cooper was one of the richest and most celebrated men in the United States. His passion was philanthropy in its most literal sense; he wanted to share his good fortune by helping others to develop their gifts and talents, and to improve society as a whole. The vehicle he chose was The Cooper Union for the Advancement of Science and Art, which he founded in 1859.
Chapter 3:
The History of Cooper Union
From the start, Cooper Union was a unique institution, dedicated to Peter Cooper’s proposition that education is the key not only to personal prosperity but to civic virtue and harmony. His goal — and this is a key point as we jump back to 2014 — was to provide free education for all, drive innovation, and instill a sense of social justice.
The school started as adult continuing education, open to women, minorities, people of color, and immigrants. Some of the famous people that passed through Cooper include Thomas Edison (chemistry classes), future supreme court justices, and Bob Kane, the creator of Batman.
Gradually, the institution evolved to a full-time degree programs in Engineering, Art, and Architecture. For over 100 years it maintained the spirit and vision of its founder, Peter Cooper, providing free education and promoting his values. That is, until 2014.
So what happened in 2014? We need to peek under the hood, and inspect the school endowment and finances which were tightly concealed by the board of trustees.
Turns out that Peter Cooper children’s gave the school a gift — the land under the Chrysler building.
It accounted for 80% of the endowment, and by leasing this land, the school got most of its income. With the financial and real estate crisis of 2008, prices plummeted and the school suffered a serious blow in its operational income. Coupled with bad management decisions, Cooper found itself all of a sudden on the brink of bankruptcy.
Looking at history, the Cooper Union endured 2 world wars, the great depression, multiple stock market crashes, and financial crises. The simplest rule of asset management, one familiar to even novice investors, is diversification. Yet Cooper Union’s endowment is highly unusual in that it’s concentrated in a single asset — the land under the Chrysler Building.
So let’s reiterate the grave circumstances:
- 80% of the endowment invested in one asset type — real estate
- The rest 20% were astonishingly invested in hedge funds
- This ill advised combo led to a serious depletion of Copper’s endowment.
If it’s hard to believe, just run a simple python / SQL query to verify:
>>> type (endowment)
Class (real estate)
>>> count (real_estate_assets)
1
>>> type (NOT real_estate)
Class (hedge funds)
>>> “””SELECT Common_Sense from BOARD_OF_TRUSTEES”””
NULL
***
And now, very unexpectedly, was brought to its knees and decided to start charging tuition. Usually universities can leverage it with 3 tools, none of which was available to Cooper:
- raise tuition
- cut scholarships
- dark secret — admitting higher % of wealthy students
Guess what happened next? An upheaval. The Cooper community revolted against the president and board of trustees. Angry students, alums, parents, and professors protested and took the case to court, and legal battles ensued. There were even various occupations of the administrative building and a sit-in at the president’s office.
Chapter 4:
So now what??
First off, the president (of whom I am totally not fond of) resigned. And after legal battles and long negotiations, the school and The Committee to Save Cooper Union arrived at the following agreement:
- Current students will be paying 50% tuition (~ $20k).
- Cooper announces 10-year plan to reinstate full-tuition scholarship.
Thank You!
References:
Wikipedia contributors. (2019, July 27). Cooper Union. In Wikipedia, The Free Encyclopedia. Retrieved 23:53, July 30, 2019, from https://en.wikipedia.org/w/index.php?title=Cooper_Union&oldid=908169808
Wikipedia contributors. (2019, July 11). Peter Cooper. In Wikipedia, The Free Encyclopedia. Retrieved 23:54, July 30, 2019, from https://en.wikipedia.org/w/index.php?title=Peter_Cooper&oldid=905768417
The New York Times, “Cooper Union Announces Plan to Reinstate Free Tuition,” March 15, 2018, https://www.nytimes.com/2018/03/15/nyregion/cooper-union-free-tuition.html
The New York Times, “How Cooper Union’s Endowment Failed in Its Mission,” May 10, 2013, https://www.nytimes.com/2013/05/11/business/how-cooper-unions-endowment-failed-in-its-mission.html?module=inline
