With its current reserve funding of $1.2 billion, a debate is raging over whether the UW should spend some of that to lower tuition or invest it to make more money in the long term. In 1990, the state of Washington provided about 80 percent of the funding per UW student and students covered the remaining 20 percent. In 2011, it provided about 30 percent while students covered 70 percent.
Earlier this year, the Washington State Legislature approved a constitutional amendment allowing the UW and WSU to invest those reserve funds in private companies and stocks. All amendments need to be approved by voters, so it will be on the ballot this fall as Senate Joint Resolution 8223. Currently, those funds can only be invested in securities sold by the government.
These reserves are publicly acquired funds that the universities have set aside for future bills they know will come due. This includes money for research, insurance reserves, and housing and food revenues. As such, only about 10 percent of the funds will be investable at first.
According to an “invest in higher education” campaign run by proponents of the bill, it would raise over $10 million annually without costing the taxpayers or students anything. Allowing the universities to diversify would reduce risk and allow them to find lucrative investment opportunities.
Students had mixed opinions when they were asked whether they supported the bill.
“As a student paying full tuition, I would like to see at least a portion of it spent to lower tuition,” sophomore Malia Prescott said.
Opponents think that the investable portion of the reserves should be used to lower tuition and reduce financial pressure on students and their families. They also claim that stock investments are too risky in our current economy.
Opponents of the bill also claim there is a possibility of conflicts of interest in the future if university-researched products go on the market. In the current bill, the reserve fund investments would be handled by the Washington State Investment Board, which proponents of the bill claim would keep investments fair. In the future, though, bills could shift control to the universities.
Several other students echoed Prescott’s sentiments, but some thought the university might be better off long-term investing the money.
“Tuition is really high, but I’d be okay with them being able to invest some of it,” senior David Butler said.
With the UW’s current student population of 42,428, estimated investment earnings would come to about $250 per person at first. Whether the money would directly lower tuition, add to the operating fund, or be dispersed elsewhere has not been stated.
Reach reporter Andrew Rodgers at news@dailyuw.com. Twitter: @AndrewRodgersAU
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