Perhaps the most obvious push-back by the New York Legislature to the recent campus activism was that the budget for 2024-25 that Gov. Hochul signed on April 22, zeroed out Bundy Aid for Cornell and several other New York-based universities.
What is Bundy Aid?
Historically, Cornell enjoyed the support of both Democrats (led by organized labor) and Republicans (led by the agriculture lobby). It was the flagship of higher education in New York and enjoyed direct annual appropriations for CALS, Human Ecology, ILR and the Vet School. After World War II, the state also began massive support of the State University of New York (SUNY) and later the City University of New York (CUNY) systems. However, New York recognized the importance of private higher education and established the “Unrestricted Aid to Independent Colleges and Universities” (Bundy Aid). The program shares $35.1 million between New York’s private, non-profit colleges based on how many degrees they award each year.
Prior to 1972, most government aid in higher education was given to the schools rather than to the students. In addition to Bundy Aid, there were programs to help build laboratories and dormitories. In 1972, the federal government shifted its emphasis to student loans and grants with the goal of empowering students to be better consumers of education. New York established its Tuition Assistance Program (TAP) for New York residents that stayed in-state to attend college.
Until recently, New York did not penalize Cornell for having its endowment. In fact, the SUNY officials who handle the budgets of Cornell’s four statutory colleges encouraged Cornell to raise endowment funds to supplement the budget of those colleges. In contrast, Congress passed a new excise tax in 2017 of 1.4% on endowment income levied on universities that have at least 500 tuition-paying students and net endowment assets of at least $500,000 per student. Because Cornell’s endowment per student is less than $400,000, it does not pay any taxes on its endowment.
The Budget Bill
The final NY budget removes Bundy Aid from any school having an endowment of $750 million or more. This disqualifies Cornell, New York University, Columbia, and 13 other schools. This saves a total of $16 million per year, and costs Cornell $1.8 million per year.
Meanwhile, the budget increases the minimum TAP grant from $500 to $1,000. The eligibility income cap for dependent students increases from $80,000 to $125,000. The New York legislature is also considering a separate bill that would make students engaged in anti-semitic conduct ineligible for TAP grants.
Other than losing Bundy Aid, Cornell fared well in the budget.
