Har­vard and Yale don’t need fed­eral sub­sidy

The Week Middle East - - News -

James Piere­son and Naomi Schae­fer Ri­ley

The Wall Street Jour­nal Don­ald Trump is right about one thing, say James Piere­son and Naomi Schae­fer Ri­ley. When he crit­i­cised US univer­si­ties last month for hoard­ing their en­dow­ments, the pres­i­den­tial can­di­date put his fin­ger on a real prob­lem. Ivy League col­leges will protest that, as pri­vate in­sti­tu­tions, they are en­ti­tled to spend their money as they like. But given that they also re­ceive a lot of pub­lic money in the form of grants, fed­eral loans, schol­ar­ships and tax ex­emp­tions, the state has ev­ery right to ques­tion their spend­ing pri­or­i­ties. As of 2014, the eight Ivy League univer­si­ties had, be­tween them, just un­der 60,000 un­der­grad­u­ate stu­dents and to­tal en­dow­ment funds of about $117bn, ac­cord­ing to a study by Open The Books. That works out to about $2m per stu­dent. Yet be­tween 2010 and 2014, these col­leges also re­ceived some $30bn in var­i­ous tax­payer-funded sub­si­dies – equiv­a­lent to al­most $102,000 per stu­dent per year. “Wash­ing­ton is ef­fec­tively pay­ing col­leges not to spend their en­dow­ments.” Fed­eral funds are al­low­ing them to lav­ish money on new build­ings and ad­min­is­tra­tors, while leav­ing tax­pay­ers to take care of stu­dents. We need to rec­tify this. “Schools with swollen en­dow­ments” should lose ac­cess to fed­eral sub­si­dies un­less they di­rect more of their in­vest­ments to­wards stu­dents. Har­vard et al are rich enough to stand on their “own two feet”.

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