Harvard and Yale don’t need federal subsidy
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”.