Capital New York

On Tuesday, Oct. 18, the Cooper Union for the Advancement of Science and Art formally inaugurated its new president, Jamshed Bharucha. Outside the main campus building on Cooper Square, a small group gathered to serenade him with a plea: To reduce the rent on a nearby building owned by the school so that another fabled East Village institution, the financially struggling St. Mark's Bookshop, could afford to stay.

In fact, Bharucha had come to New York to save Cooper Union itself, even though many alumni, teachers and students were unaware the institution was in such grave danger.

Just 10 days later, those that didn't know read the following in a report in The New York Times:

Facing serious financial trouble in a weak economy, Cooper Union, the New York City college founded in 1859 to provide free education for the working class, may begin charging undergraduate tuition for the first time in more than a century, its president said Monday.

In a speech delivered in the historic Great Hall in that main building (called the "Foundation Building" by Cooperites) on Tuesday, Bharucha addressed the swirling controversy over the finances of the school, one of the most prestigious in the country, and a unique one.

Students at Cooper Union, who study in any one of its three schools dedicated to art, engineering, and architecture, don't pay tuition. And that's where the controversy arises: With the school's finances in trouble, Bharucha was strongly reaffirming to his audience that the school was considering changing that and making students pay.

Bharucha told the crowd that charging tuition was a possibility that remains "on the table," despite recent outcry amongst faculty and alumni that greeted the Times article.

Bharucha was firm: Not to consider all options, he suggested, would be as short-sighted as the 152-year-old institution's financial vision has been in recent years.

"As I have sought to learn about the history of Cooper Union," said Bharucha, who was appointed president of the school in July, "there has not been a sustainable budget or financial model for at least forty years, and probably going back further."

At this and other meetings, many expressed exasperation that the situation for the school could have become so bad with such apparent speed. But Bharucha outlined a series of decisions made especially over the last 10 years that had quietly been undermining the institution.

Heavily reliant for years on real-estate holdings (and thus protected from the volatile stock market that had wreaked such havoc on the endowments of many cultural institutions and educational institutions), and with a living network of alumni numbering just 12,000 to lean on for further support, the school, Bharucha said, had faltered.

And its greatest expense, and to many the institution's defining characteristic, was the fact that each of its nearly 1,000 students receive a four-year scholarship valued at upwards of $35,000 a year, was shockingly suddenly in jeopardy.

Bharucha described a $20 million per annum shortfall. The school is expected to decide in the spring how best to get back on firm financial footing.

In charts and figures based on the school's financial forms that were presented at an earlier meeting on Dec. 5, it was demonstrated that the percentage of alumni donating was down to 21 percent from 30 percent in 2002. Worse, lots of money was shown to have been lost in the economic downturn, even as the school was committed to service the debt on a $175 million loan taken in 2006.

Cooper Union was founded in 1859 by Peter Cooper, an American inventor and industrialist who described himself as having "a knack for contriving." The East Village institution was modeled on Paris' École Polytechnique where dedicated students were said to subsist on a daily crust of bread. Some early students did pay tuition, but since 1902, the school has granted its students—numbering nearly a thousand—full-tuition scholarships to study, architecture, art, and engineering.

Fueling the present controversy are fundamental differences of belief among students, alumni, board members and faculty at the Cooper Union about the significance of its free education to its mission.

Bharucha, the newcomer, has described it as "a feature"; school administrators talk in terms of access to quality education. But others see the free-education mantra as the very reason for Cooper Union's existence.

Bruce Degen is a 1966 graduate of the school's arts program and the illustrator of the children's book series The Magic School Bus.

"If they start charging tuition," Degen said in an interview outside the school's Foundation Building following Bharucha's speech, "Cooper Union is done."

He and others, including many alumni and students, argue that Cooper Union's automatic absolution of the yearly tuition technically charged to students (which now stands at $35,000) has created a powerful and invaluable sense of mission and belonging.

"In the 1960s," said Degen, "all the schools were having revolutions. Columbia was occupied. Their architectural division called Cooper Union architects in for a meeting. When my friends came back, they said, ‘The want us to strike against the school. We had to tell them this is not Big Brother. Cooper Union is the most incredible gift. Why would we ever strike it?"

Do away with the full scholarships, and that unity is lost, Degen said.

"Now, Cooper Union is the holy grail, but [by charging tuition], you're putting it in a pool with a hundred other art schools," he said.

Kevin Slavin, class of '95, is a digital entrepreneur who recently sold his company, Area/Code, to gaming firm Zynga, makers of FarmVille.

"The overall sense we had," Slavin said on a telephone call with Capital, "was that we're all doing the best we can with what we've got. We don't have a climbing wall. We don't have a football field. What we have is the ability to educate 900 students on the basis of merit alone."

(Cooper's admission rate is amongst the lowest in the country, hovering in the single digits.)

The school has historically relied upon its real-estate investments, particularly its ownership of the land underneath the Chrysler Building, which they lease out at a rate of $7 million a year. In recent years, the school has actively emptied its holdings of other properties, and finds itself without much left. "There are no obvious assets to sell," said Bharucha yesterday, adding that the school found itself let down by a stock market that had "bailed out the institution for many years."

One place where Cooper Union has aggressively built, rather than sold, is at 41 Cooper Square. That's the site of its striking new Thom Mayne-designed building, a structure that resembles a brushed-steel refrigerator twisting in the wind. Costs have been estimated at $160 million. To critics, the new building represents physical evidence of the administration's folly. To its fans, it's an investment in modernizing an education that stayed static and analog while institutions like Massachusetts Institute of Technology and Stanford University rushed to embrace the digital revolution and its associated patents, start-ups, and prosperous alumni and faculty alike.

The building may have been necessary for the school to upgrade and remain competitive with big, well-endowed institutions elsewhere, but that doesn't help things now, Bharucha said.

"There's opportunity in innovation," he said, "and that's where Cooper Union can be so, so good. There's no reason that in the long term we can't have the kind of innovative entrepreneurial culture that does spin off in financial terms."

"We can create an education that makes the institution more useful in the 21st century," he said, and continued to speak about breaking down a "rigidity" that silos Cooper Union students and faculty into their core areas of study.

But turning Cooper into an incubator of innovation is "a long term strategy," Bharucha said. "We need a short-term and an immediate-term strategy as well."

That Cooper has found itself is in so need of "immediate-term" solutions angers many alumni.

Critics charge that the school's administration has made two big mistakes in recent decades. First, they failed to develop a workable funding model to preserve the school's tuition-free status, including a vibrant alumni base equipped with a valuable 21st century education. And second, they failed to be transparent about the school's predicament.

Slavin pointed to a Wall Street Journal article from the summer of 2009. The headline: "One College Sidesteps the Crisis."

The article, on Cooper's real-estate holdings and other investment strategies, celebrated the institution and then-president George Campbell's strategy for navigating around the economic woes that challenged endowment-dependent institutions.

Meanwhile, those financial underpinnings were crumbling.

"An institution that is based on free tuition has got to work magic somehow," one person familiar with the administration's thinking on financial matters told Capital. "And, well, you start to believe in magic." 

"I don't know whose interests that served, except George Campbell's," said Slavin. "It certainly didn't serve the purpose of [fund-]raising from alumni."

For its part, the board admits that alumni money has been scarce, but turned the problem around: Mark Epstein (Arts '76), chair of the Board of Trustees, said at a recent school forum that he "would blame the lackluster performance of alumni" in the effort to offset the revenue lost to free tuition.

"And then they come back two years later and say, ‘We have two years left, and the problem is you?'" Slavin said.

At the Dec. 5 meeting, Slavin told some 200 current students at a meeting that the board had asked him for a $10,000 donation days before news broke that the school was considering a tuition plan. But he said he felt the finances of the school were not sufficiently transparent for him to feel completely comfortable giving.

As an example, Slavin said his peers found on the school's Form 990, the financial statement filled out by all non-profits, that there had been some $2 million in payments to Jonathan Rose Companies for construction supervision. The company is run by the son of Cooper Union trustee, Sandra Priest Rose.

Nancy Scola

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