<rleton’s pool of financial aid may have sprung a leak. One of its largest funders is the Starr Foundation, and their ability to fund is suddenly rather uncertain.
Over the past fifteen years, the Starr Foundation has given $16 million to the College in support of Asian studies and scholars, making the foundation the largest giver in Carleton’s history. As Mark Gleason, Director of Corporate and Foundation Relations, stresses, “These are fabulously generous philanthropists.”
Unfortunately, as a result of the national financial collapse in late September, the availability of such aid may be drying up.
Starr was established in 1955 by Cornelius Vander Starr, the founder of insurance giant American International Group (AIG). Vander Starr was well-known for his humanitarian values and actions. He felt a particular attraction to Asia, having spent much of his early career in China before moving his company to New York.
According to a New York Times article on September 29 of this year, the Starr Foundation held 15.5 million shares of AIG in May. As AIG stock declined through 2006 and 2007,finally plummeting this September, Starr lost at least $1 billion in assets, roughly a third of its total value.
The Starr Foundation has played an instrumental role in the internationalization of Carleton’s academics and student body through two funds that each currently face different futures.
The safest, as Rod Oto, Director of Student Financial Services, explains, is the CVStarr Endowed Scholarship Fund because “we have principle in hard money and use interest earnings to fund the scholarship.” Since the scholarship was established in 1993, the Starr Foundation has donated annually to supplement the fund. Last year they made a contribution of $500,000 to CVStarr.
Since the fall of AIG, however, the foundation has had to make changes. “We just heard from the Starr Foundation that they are suspending any addition to the endowed fund this year,” Oto said. Because it is endowed, the CVStarr Scholarship Fund will survive even without the typical yearly donation to grow the principle.
“$4.5 million was its peak before the crash, but I’m not sure where it is now,” notes Gleason.
The CVStarr scholarship is need-based financial aid for students interested in Asian studies, including language, literature, and culture. There are typically about 14 CVStarr students among the four class years, although that number has reached as high as 34. The Financial Aid Office divides the total funds available in a given year among the eligible students based on need.
The scholarship in significantly more danger is funded through the Asia in Comparative Perspective grant. Thanks to the efforts of former president Stephen Lewis and professor Burton Levin, in 2000 the Starr Foundation awarded this $5 million project grant to Carleton to be distributed over a five year period.
As Oto explains, “The whole effect was to internationalize and to help us offer a Cross Cultural Studies concentration.” But, unlike the CVStarr program, this money is spendable; it is not endowed, and therefore it is not permanent.
According to Petra Crosby, Director of International Student Programs, the grant has funded 85 scholarships in total, with students representing 16 countries. There are 40 students receiving Starr Scholarships, covering either partial or full tuition, on campus right now.
The Asia in Comparative Perspective scholarship program has been hugely successful in increasing the number of students from Asian countries attending Carleton. Charlie Cogan, Director of International Recruitment, spoke about the importance of the grant. “A lot of great students wouldn’t be here without it.”
In fact, over the first five years, the scholarship increased the international presence and cross-cultural awareness on campus to such an extent that, through the efforts of President Oden, Carleton received the five-year grant again in 2006.
Despite AIG’s problems, Oto emphasizes that current students receiving Starr scholarships have nothing to worry about. “Things are fine for now. We have the funding for current students in hand.” Florence Davis, president of the Starr Foundation, has promised that the foundation will honor all its current commitments.
“I think she means what she says,” adds Gleason.
The future of international scholarships after the Starr grants runs out in 2011, though, is considerably more precarious.
Well before the financial crisis, Carleton understood the need to make this fund endowed like the CVStarr program to ensure permanence. In fact, endowing international scholarship funds is a major goal of the Capital Campaign.
According to Gleason, “Endowed funds cover about 25% of student financial aid. This is less than other colleges of our caliber, which is partially why the aim of the capital campaign is increasing that number.”
For Cogan, too, the need to endow scholarship funds for international students is pressing and personal. “It would be a shame to put eight years of my life into something that isn’t a commitment.”
Before AIG’s collapse, Carleton seemed likely to receive yet another five-year grant, significantly contributing to the goal of endowment. At least, in Gleason’s parlance of college stewardship, “The Foundation was prepared to entertain another request in our ongoing Capital Campaign to endow these scholarships.”
Now the College needs to come up the money itself, and the stakes are high. “Without [enough funds from the Capital Campaign] the number of scholarships for international students is likely to decline,” admits Gleason.
This would change the socioeconomic diversity within the international student body, which is a fear for everyone, especially those who work with international students. “Charlie [Cogan] and I are both concerned about it,” says Crosby. “The socioeconomic diversity of the international student population needs to mirror the socioeconomic diversity of the larger Carleton community.”
Endowed international scholarships are necessary to compete with our peer colleges for the best students. “Swathmore, Williams, Amherst, Boden haven’t had the benefit of Starr Scholarships, yet they’re all still doing better than we are in funding for international students,” laments Cogan.
If there is an upswing to the financial crisis, it is the increased attention to the insecurity of our currently unendowed financial aid funds. As Cogan asserts, “We cannot sit passively waiting for Starr Foundation to give us more money.”