The document proposes establishing an endowment within the University System of Maryland to make public colleges and universities tuition-free for residents. The endowment would be seeded with funds from the system, private donations, and the state government. It would initially cover tuition for transfer students with financial need and aim to eventually cover all tuition-eligible students in the system. The endowment is intended to provide sustainable funding independent of annual budgets and reduce debt for students.

1. Endowing our future: The Path Toward Tuition-free
College in Maryland

2. The cost of postsecondary education has far
outpaced the median household income
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 Higher education is directly correlated to
innumerable economic and social benefits.
Higher salaries, a more versatile and qualified
workforce, healthier lifestyles, and greater
economic mobility to name a few.
 Access to higher education, however, has become
more fleeting, especially for the poor.
 In 1971 the average cost of tuition for a public 4-
year college was $428 ($2,499 adjusted for
inflation) per year. By 2015 tuition had risen to
$9,420 per year, an increase of 276% when
adjusted for inflation.

3. The cost of postsecondary education has far
outpaced the median household income (cont.)
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4. The cost of postsecondary education has far
outpaced the median household income (cont.)
 Maryland’s investment in need-based
financial aid is below the national
average.
 From 2008 to 2013, the average tuition
and fees paid by a Maryland student
increased 20% at community colleges
and 15% at four year intuitions.
 During that same period the median
family income only grew by 3%.
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5. The cost of postsecondary education has become less
accessible to students looking to pay their own way…
 For those community college students looking
to transfer to a four-year institution within
University System of Maryland (USM) the
challenges are all-the-more significant.
 Few financial aid opportunities exist for this
population and the majority of them work or
have significant family obligations.
 According to the DLS report, a working
student would need to put in 23 hours a week
at a minimum wage job to pay tuition at a
community college and about 40 hours a week
to afford tuition at a four-year institution – an
impractical and untenable proposition for any
low-income student attempting to maintaining
full-time enrollee status.
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6. What feasible options do we have here in
Maryland?
 Create an endowment within the
University System of Maryland to ensure
every Maryland resident admitted into one
of the twelve public institutions within the
USM can eventually attend tuition-free.
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7. What is an Endowment?
 Endowments represent money or other financial assets that
are donated to universities or colleges. The sole intention of
the endowment is to invest it, so that the total asset value
will yield an inflation-adjusted principal amount, along
with additional income for further investments and
supplementary expenditures.
 Typically, endowment funds follow a fairly strict policy
allocation, which is a set of long-term guidelines that
dictates the asset allocation that will yield the targeted
return requirement without taking on too much risk.
 Most endowments have guidelines that state how much of
each year's investment income can be spent. For many
universities, this amount is about 5% of the endowment's
total asset value.
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8.  In Maryland, the USM Foundation
manages endowments and this type of
an endowment is called a quasi-
endowment. Quasi-endowments “are
accounts invested as an endowment, but
funds are earmarked for a specific
use...”
 We’ve created similar endowments for
campus capital projects and to facilitate
university development efforts - why not
tuition?
Endowments in Maryland
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9. Where is the money going to come from?
 The initial seed money would come from three primary sources;
 an initial transfer from the USM fund balance,
 private funds raised from the twelve USM intuitions,
 and the general fund of the State of Maryland.
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10. Where do we start?
 At the beginning the endowment would
support Pell Grant eligible transfer students
from Maryland community colleges to a
four-year USM institution.
 As the fund grows we would seek to cover
all Pell eligible students in the USM.
Eventually every Marylander admitted to a
USM institution could attend tuition-free.
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11.  Under this plan we would be well on our way to
implementing as system in which students and
families would finally be free from crushing
student loan debt that has long handicapped the
financial and professional prospects of too many
Marylanders.
 But the benefits don’t stop there – member
institutions would receive their full allotment of
tuition without having to dip into their own
individual institutional endowments to provide
financial aid. The money saved on financial aid
would leave millions of dollars a year for each
university to reinvest in other important
initiatives.
Endowing our future: The Path Toward Tuition-free College in
Maryland
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12.  An endowment of this sort offers our state the opportunity to provide a sustainable source of funding
immune to the political influences of the annual budgeting process. Endowing our future is the
pragmatic and sustainable path toward tuition-free college but it isn’t a silver bullet. The cost of higher
education is still exuberantly high.
 Apart from tuition, students have to contend with the cost of room and board, books, fees, food, and
activities. College is expensive and we in the legislature have an obligation to do something to expand
access without strapping the next generation with billions in debt. Let’s start by ensuring every
Marylander has access to our world-class system of public higher education.
Endowing our future: The Path Toward Tuition-free College in
Maryland
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13. Endowing our future: The Path Toward Tuition-free
College in Maryland