University of Austin announces $100 million donation and halts tuition ‘forever’

The University of Austin announced Wednesday that Republican megadonor Jeff Yass will donate $100 million to “end tuition forever” and “never accept government funds.” At the same time, it said Yass’ gift represents the first third of “a $300 million campaign to build a university where students are free.”

University President Carlos Carvalho told Inside higher education He does not intend to use the $300 million as a permanent gift. Instead, he said the funds will be invested but used as a “bridge” until the institution generates enough endowed alumni to remain tuition-free. He estimated it would take 25 years, “more or less.”

“We know there are risks with this approach,” Carvalho said. But he said he believed in the product, calling his students his “equity partners” but emphasizing that “all they owe is their greatness.”

When the institution welcomed its first students last fall, the institution said annual tuition was $32,000, but Carvalho said no one ever paid. The university still has no accreditation, which could take years, but the state of Texas allows it to award degrees, and the accrediting agency, the Middle States Commission on Higher Education, has granted it candidate status to gain accreditation. The university said it expects to complete the “first accreditation cycle” between 2028 and 2031.

Yass, the billionaire co-founder of financial trading firm Susquehanna International Group and a significant investor in TikTok owner ByteDance, has been in the news recently for other gifts. He sided with Republicans in an attempt to end the Democratic majority on Pennsylvania’s Supreme Court, but voters reappointed all three justices for another ten-year term (although one of the justices would need to retire after a few years). He also provided millions of dollars to support private K-12 school vouchers and elect Republicans to Congress.

he told wall street journalThe man who broke the news about the donation to the University of Austin said he was impressed by the university and wanted to eliminate parental pressure and support the separation of education and government. His gift to the fledgling agency — which Carvalho said is on top of a previous $36 million gift from Yass — is another example of the agency’s continued support from prominent conservatives. Carvalho said the university has raised more than $300 million, $100 million of which will be used in the new $300 million campaign. this Magazine According to the report, donors include real estate developer Harlan Crow, who provided travel funding for U.S. Supreme Court Justice Clarence Thomas, and Peter Thiel, a friend of Palantir co-founder and Vice President JD Vance.

Such donations may allow the university to do something that no other university can: survive without relying on student, state or federal donations. Instead, the university says it relies on alumni to sustain it. The first students are expected to graduate in 2028.

“Our bet is to produce graduates of such excellence that they will pay it forward with success, funding the tuition of the next generation,” the university said in a statement. “As our students build important companies, defend our country, advance the frontiers of science, raise families and create awe-inspiring work, they will remember who made their excellence possible. They will give back to society.”

It goes on to say “other Americans will take notice” and invest. “Every other university gets paid whether students succeed or fail. At UATX, if our graduates don’t become keys to American excellence, if their work doesn’t inspire others to fund that mission, we’re screwed.”

Some higher education observers are skeptical. Mark DeFusco, of Prometheus Education, which handles mergers and acquisitions for struggling universities, said it would be “almost impossible” to run a “serious university … as we know it” with just $300 million.

“God bless them if they make it,” DeFusco said. “While I understand their desire, practicality seems unlikely and I’d like to see the details.”

Carvalho said the university currently has 150 students in its freshman and sophomore classes, and he plans to increase total enrollment to 400 to 500 at this time. “We need the first phase of growth to be smaller,” he said.

“We’re talking about building thoughtful SEAL teams,” he said. “The SEALs are not a team of thousands of people.”

The university offers programs in computer science, journalism and pre-law and hopes to launch courses in those three areas, he said. Bari Weiss, one of the university’s founders, also founded free press and most recently became editor-in-chief of CBS News.

Other universities have also tried to waive tuition in favor of alumni. In 2021, Hope College in Michigan aims to raise $1 billion for its endowment to become tuition-free. As part of the program, students will pledge to donate to the university upon graduation. The first class of students graduated last spring, and 126 students have attended over the previous four years, according to the college’s annual report. About 85 percent of recent graduates and 70 percent of freshmen through juniors have donated.

Neal Hutchens, a university research professor and faculty member in the University of Kentucky College of Education, said the tuition-free, non-government-funded program raises questions about how big UATX can grow and whether its model can be replicated elsewhere.

He also points out that universities are not unique in their marketing of themselves being at odds with academia. A video on the UATX homepage criticizes the “coddling,” “virtue signaling” and “catastrophic” state of higher education in the “Western world,” and features images of buildings with rainbow-colored signs above their entrances, people wearing cloth masks blowing on musical instruments, and arrested pro-Palestinian protesters. In the video, Weiss said that to understand why “the museums you loved, the publishers you loved, the newspapers you once trusted” “are being hollowed out, you have to look at the core of it — and that’s the university.”

The New College of Florida, a public institution taken over by Gov. Ron DeSantis’ conservative board appointees, appears to be charting “a similarly iconoclastic path,” Hutchins said. He noted that the New School had long spoken out against what some called wokeness.

“It’s not necessarily an easy fix for new colleges to automatically thrive,” he said. He said he’s curious whether the institutions will pursue the same donors, and they may end up competing more with each other than with the institutions they distinguish.

However, Hutchens said UATX may be able to gain popularity in the tech industry and further engage with those with deep pockets.

“It doesn’t take a lot of $100 million to make a pretty good donation,” he said.

Asked about claims that his university promotes conservative ideology, Carvalho said, “Our core courses are teaching the best that has been done in the Western tradition,” from philosophy to science, literature and more. He said none of this was conservative.

“We do have a very patriotic institution,” he said, adding that if this were “a conservative statement today — that’s not my choice.”