The stock market crash earlier this year has been called the worst economic downturn since the Great Depression by the International Monetary Fund. Fear over the COVID-19 outbreak and President Trump’s negative response worked together to create a drastic hit to the U.S. economy. The whole country is feeling the negative impacts of the mismanaged virus, and UO is not immune, as it experienced a sudden drop in endowment funds used to award scholarships.
Endowments are a series of donations that, upon collecting interest and gains, are used to fund scholarships in perpetuity.In essence, the principal amount is never donated, and the accrued interest and gains are given to students as scholarships. UO splits its endowment distributions three ways: academic support, student scholarships and extra UO support. Investors’ confidence has allowed these sections to continue growing their return funds and creating better programs for students. But, with the March 2020 stock market crash, their confidence has diminished. Endowment funds decrease as a result, leading to less money for scholarship and academic programs.
Trump was the worst person to have in office during the COVID-19 outbreak. In February, Trump confidently claimed that COVID-19 was “going to disappear. One day it’s like a miracle, it will disappear.” He then claimed in March that he wanted to play the pandemic down in order to avoid a panic.Instead of making a decisive plan to curb the spread of COVID-19, he continued to underemphasize its impact, pushingfor the reopening of nonessential businesses. The only official plan from his administration: “transition to greatness.” As if those three words could somehow curb the spread of the virus and prevent economic downturn.
Unfortunately, his confident words were not enough to curb the spread of the virus. More than 100,000 small businesses have permanently closed and more than 238,000 people have died from COVID-19 as of Nov. 8. The two largest pieces that make up America’s gross domestic product ─ or the market value of all goods and services produced in the country ─ are consumption and investment. But, because Trump did not create an efficient plan for our economy to survive the shutdown, both pieces are struggling. Consumption has fallen as businesses close and individuals choose not to make any major purchases, and investors are holding off until they can gain some sort of clarity on the full impact of COVID-19.
Now, remember UO’s endowment funds? Well, their returns are directly correlated to equity investment returns, so when investors panicked and withdrew large sums of investments — thereby lowering stock prices and changing interest rates — the value of UO’s investments plummeted. In an internal report from UO, endowment investments had an expected return of 5.3%, but only actually grew 1.1%. For context, over the past 10 years, UO endowment investments have exceeded benchmark expectations by 0.5%. What’s this all mean? Less money available for UO to give back to students in the form of scholarships.
It’s no secret that higher education is the golden ticket that allows students to break the cycle of generational poverty. A student who works with a bachelor’s degree will earn $1 million more than an individual with a high school diploma, according to ReUp Education. Education paves the path to a stable career, better health, and higher quality of life. But for low-income families, it removes their students from the cycle of poverty which becomes the biggest dilemma. Higher education has never been more expensive than it is now ─ and the ever-rising tuitions show no sign of slowing down any time soon.
I’m able to attend UO because of the scholarships I worked hard to get. Students put in time and effort to ensure they are the one that gets the scholarship that will propel them forward. Trump’s laziness towards handling COVID-19 has killed over 200,000 people in the United States alone. How many more of the “tired, poor, huddled masses yearning to be free”won’t be able to attend college because he stole their scholarship?
