Endowment funding

Endowments for tertiary public institutions can be enormous, with the largest one being The University of Texas System, which had an endowment of $30.9 billion in 2018.^[2] The majority of this money sits in an account and generates interest. However, this money can be coupled with government funds to eliminate the need for charging tuition. This would be beneficial to both the institution and the student, as the student would graduate with little to no debt. The institution would reap the rewards of it's generosity in the long run, as an alumni without student debt is much more likely to make donations that can be put towards replenishing the endowment. Student loans make it difficult for young alumni to give back after graduating, and the absence of habit when it comes to donating has been cited as a reason for low numbers of donors in recent years.^[3] In other words, increasing endowment spending may shrink endowment funds in the short run. However, in the long run the endowment would grow as more alumni would get into the habit of donating after graduation in the absence of student loan debt.

[P1] Public tertiary institutions have large enough endowments that, if they increase their spending, they can make the need for tuition obsolete.