Here’s a scary realization: It’s no longer just our pensions being subjected to the economic consequences of divestments – now it’s our children’s education. In a recent editorial piece in the Chicago Sun Times, coalition member Howard Brookins discussed the importance of smart investments by universities to ensure school endowments continue to grow. But unfortunately, college and university endowments are now being influenced by the same politicization that pensions are currently facing.
Saying that divestment threatens the growth of university endowments is just scratching the surface. In reality, divestment, which shrink return on investments, would impact funds that would otherwise be delegated to school operations, research, professor salaries, and scholarships for students. And Brookins highlighted this impact on minority students, pointing out that “They are often more dependent on financial aid to achieve their educational dreams and any less funding available would disproportionally affect them.”
Brookins also notes that state-funded universities, in particular, can’t afford the financial drawbacks of divestment. For example, his home state, Illinois, is actually in a budget crisis which is impacting higher education funding. Consequently, the strength and reliability of university’s investments is that more important.
As we move deeper into this discussion, we need to remember that not only is divestment negatively affecting current and future retirees, but also the future of our children’s education.