Why is it so difficult to start a new college in America?

The plans for the University of Austin, a startup university founded under the banner of free inquiry and “the fearless pursuit of truth” and promising an undergraduate college by 2024, were greeted with a fair amount of skepticism by the journalists and academics in my Twitter feed this week.

The new university has a notable group of intellectuals on its board of advisers, and a distinguished former college president at its helm, and it’s beginning at a time when elite academia seems like it could use some shaking up.

The sector seems in need of novelty and new experiments, ideally in the name of some sort of higher academic values.

But one issue that kept coming up in the insta-critiques about UA deserves particular attention: the sheer financial and logistical challenge of getting a new university going. This issue was cited by critics as proof that the project would inevitably end up as a diploma mill or grift, while friendlier voices cited it as reason that the figures involved in the new university should be trying to strengthen existing institutions instead.

The point itself is absolutely correct: You can’t start a real competitor to our major universities on the cheap.

The fact that we have seen so few important universities established since the 19th century, and that people who set out to start one are assumed to be engaged in a quixotic or foredoomed quest, is a notable case study in American stagnation.

Yes, occasionally existing schools dramatically reinvent themselves (as NYU and Washington University in St. Louis did in recent decades), or outsider colleges succeed as business propositions (like Jerry Falwell’s Liberty University, cited by skeptics as an example of where the University of Austin might end up). But overall the elite-college landscape looks more like a cartel than a zone of thriving innovation.

This puzzle is not resolved by suggesting that it takes more money to start a top-flight college than it did when Leland Stanford or Johns Hopkins helped establish the schools that bear their family names. True, it would take hundreds of millions of dollars today, if not billions, to set a new college on its way. But the

Stanford and Hopkins gifts came to hundreds of millions in today’s dollars, and as Ferguson notes, donors gave nearly $50 billion to American higher education in the 2019 fiscal year. Is it so implausible to imagine a world where 5% or 10% of that spending went to a few significant startup universities? Alternatively, the federal government spent about $150 billion on higher education in 2018; a billion-dollar endowment for a new public university would cost a tiny fraction of that.

Not every rich donor has the capacity to start a university single-handedly. But even just the opportunity to help shape a new one seems worth more than the chance to become a rounding error to the multibillion-dollar endowments of the

Ivy League. Amid all this week’s tweeting about the University of Austin, for instance, the journalist Julia Ioffe asked its partisans: “Would you send your kids there? If it was between, say, Harvard and University of Austin, what would you choose?” I have no idea what the parental answer ought to be, given that the startup school is just an outline at the moment. But if I had money to give to a university and I had any sympathy for the Austin project whatsoever, I would definitely choose to put it there rather than into Harvard’s pockets.