How a sweet deal in the 1850s could have gotten you free tuition.
In 2019, it’s possible to attend Northwestern University tuition-free and save a grand total of $216,480 over four years. All it takes is a slip of paper from the 1800s granted to you by a will. The deal sounds far too good to be true. In a world where the budget crisis rages on and tuition costs tick up by 3.6 percent every year, Northwestern would never let a student avoid paying tens of thousands of dollars per year. But what if the University is legally required to do just that?
Imagine this: it’s June 23, 1853, and Franklin Pierce has just succeeded Millard Fillmore as President of the United States. The country is slowly but surely grinding toward civil war, with Illinois bracing for the rise of Abraham Lincoln. Just two years ago, nine prominent Methodists founded Northwestern University as the first chartered college in the state. They’re scraping to find adequate funding for their prized institution. They turn to selling $100 bonds in exchange for free University tuition.
Fast forward to 2019. Northwestern has just cracked top 10 on the U.S. News and World Report’s college rankings list, and NU athletics basks in the glory of a brand new, $270 million lakeside practice facility.
Yet, if you arrive on campus with one of those precious bonds, you’ll get a $54,120 discount — the current tuition price.
Northwestern was all-male between 1853 and 1867, when University officials sold these perpetual scholarships. After the school opened its doors to women in 1869, NU began accepting scholarship bonds that had been handed down to daughters, as well.
University Archivist Kevin Leonard notes that scholarships “can be passed on,” meaning that one family member in each generation can redeem free tuition at Northwestern. Forever. As long as the tuition bond transfers hands properly through a will, it can be reused indefinitely.
When the first class of students enrolled at the University in 1855, tuition was $45 per year, so these bonds initially gave families a 45 percent discount on four years of tuition. Over time, as Northwestern tuition costs skyrocketed to tens of thousands of dollars per year, those savings grew exponentially.
“When the school is able to establish itself better and realize greater revenues from tuition and other sources, they cut out the scholarship business,” Leonard says. “In the end, that’s gonna bite you if you sell too many of those things.”
Still, those Methodist businessmen knew what they were doing. In just the first year, Northwestern made $91,000 from the sale of perpetual scholarships. According to Northwestern University: A History 1850-1975 by Harold F. Williamson and Payson S. Wild, selling such scholarships “was a common device for raising money in the pre-Civil War period.”
In fact, Northwestern made a net gain on the sale of perpetual scholarships. By 1959, the University had sold 1,161 bonds, but only 341 students had redeemed free tuition scholarships. According to Northwestern University: A History by Jay Pridmore, just “a few additional scholarships” have been used in the last 60 years.
The University general counsel’s office and provost for enrollment, Mike Mills, did not respond to requests for comment on the most-recent redemption of a perpetual scholarship.
“The reason [Northwestern] went from a small-scale operation — just this threadbare, clawing to hang-on school — to something more substantial was, in part, because of the sale of these scholarships,” Leonard says.
In 2019, anyone would jump at the opportunity to buy perpetual scholarships, but Leonard points out that it was actually a risky investment for purchasers in the 1850s and ’60s. Hundreds have gone unused because of the contract’s specific parameters. For instance, scholarship holders still have to gain admission to Northwestern, which has grown increasingly difficult in recent years.
Nowadays, the University occasionally fields questions about the validity of these bonds.
“Every few years, we get a call from someone who is investigating our records on scholarships because they have one and are wondering if it’s still applicable,” Leonard says. “So there’s some of them still out there. God knows how many.”