The vast sums being accumulated by elite private and public universities are quite amazing. Here's an excerpt from Lynne Munson of the Center for College Affordability and Productivity's testimony to Congress:
Some of the most outsized endowments are at elite institutions. Yale has $2.8 million in the bank per undergraduate. But, on average, independent schools with endowments larger than a billion have $432,422 in their endowment per full-time student. And plenty of public schools also have impressive endowment-to-student statistics. The University of Virginia and the University of Michigan bank $322,000 and $150,000 per undergraduate, respectively. And even though the 9-campus University of Texas system currently enrolls just under 150,000 undergraduates, its massive $13 billion endowment contains $90,000 for each student.Milton Friedman said that colleges serve three purposes: education, research, and monument-erection.
What the data shows is that endowment wealth is everywhere—except in the hands of the students who need it today. Last year endowments increased 17.7% on average—those larger than a billion increased 18.4%. Yet, despite double-digit increases stretching back a decade or more —endowment spending is at a nearly all-time low of 4.2%--down from 5.1% in 1994, 6.5% in 1982, and 5.2% in 1975.
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Let's see. Annual interest on 2.8 million (assuming T-bill rates, not the better performance endowment managers seem to turn in): $140,000.
So why does Yale charge tuition at all?
Why does the government subsidize Yale students?
Jeez, what a racket.
So why does Yale charge tuition at all?
A few years ago, there was a movement at several colleges to do just that [I seem to remember that Princeton - or was it Harvard? - toyed with the idea of abolishing tuition].
But money talked, and BS walked, I guess.
Of course, it does help to put the lie to the idea that the modern University is about education - obviously it isn't - it's all about the self-glorification of the educrats.
In the year 3000 two rival hunter gatherer tribes are locked in a battle for control of the moonscape once known as North America ... In this primitive world, where life is short and brutal, all men must choose sides ... Harvard or Yale.
Perhaps one of the most unfortunate consequences of this vast and rapidly accumulating endowment war-chest is that it affords the top universities to utterly insulate themselves from the people and society they should serve. Instead, they can drift further into hiring like-minded useless ideologues who indulge in destructive niche obsessions like angry identity studies despite little demand by students or societal need.
Take note of what happened to the Duke Professors in the gang of 88 who promoted their rape-hoax at the expense of their own students: job offers, committee appointments and the like.
Milton Friedman said that colleges serve three purposes: education, research, and monument-erection.
Wrong order. Monument erection is the sine qua non of many universities, including state institutions. He also forgot ego-masturbation of the terminally degreed, not to mention the training of future NBA/NFL players. Education and research come a distant fourth and fifth.
Check out the University of Oregon for a textbook example. How many buildings are named after Nike's Phil Knight, yet what percentage of his donations have gone towards sport programs? He just gave $100 million to UO's sports program. Yet higher ed (actual scholarship, not throwing a rubber ball through a plastic hoop) continues to be starved in this state.
There is money controlled by private individuals. There is money controlled by corporations, which, in theory, are owned by individuals. There is money controlled by the government which, in theory, is controlled by the citizens.
Then there is money controlled by foundations, colleges, churches and other non-profits. Who controls them? It seems to me that it's a self-selected elite. The current group of elites will choose the next group, and so on, and so on, and so on.
What happens when an organization stops serving the purpose for which it was founded?
Over the last several years my faith in charities has been almost completely demolished. The former small foundation exec down the street from me who lives in an $800K house and has 2 BMWs doesn't help, nor does the fact that my local United Way was up at the state legislature this year lobbying for in-state tuition for illegals.
The British Universities are much poorer, but Trinity College, Cambridge, is rich. A friend there told me that they considered just scrapping undergraduate teaching: they'd concentrate on research. Then they thought that they'd better not: they might lose their charitable status.
21st century American U.'s = Medieval Church of Rome.
... complete with Gothic architecture, in the case of the aptly-named Duke, and with the Medieval dictum that the Church defines Truth.
Expensive degrees = selling of indulgences.
All the history books agree that the material reason for the Protestant revolt against the Church was that the so-called Church was hoarding too much wealth, and thereby holding back an aspiring Protestant middle class.
Review, for example, the English Civil War of the 1640's.
Me: Of course, it does help to put the lie to the idea that the modern University is about education - obviously it isn't - it's all about the self-glorification of the educrats.
Just as I clicked to post, it dawned on me that you can't have preferential treatment for children of "disadvantaged socio-economic status" if you aren't charging tuition in the first place [the poor kids being at no greater disadvantage than the rich kids when it comes to partaking of free education].
So there goes your biggest justification for quotas.
Plus it's kinda tough to maintain that elitist atmosphere if you're giving the thing away for free.
It took me years [really decades] to realize that people will pay more for an inferior product - big $$$s for a shabby apartment, big $$$s for a tasteless meal in a restaurant, big $$$s for a membership in a run-down old club - if only the threshold presented by the pricetag is enough to discourage the riff-raff, and maintain some exclusivity to the thing.
Disgusting.
All the moreso because that money just sits there growing completely tax free. The endowments have become monuments in and of themselves.
I wish the public would wake-up to the egregious scam against the middle class that higher ed has become.
Endowments are typically restricted, with only a small part of it donated for the general good of the undergraduate population. Yale and Harvard, who have by far the biggest endowments, are incredibly generous to the small number of students from lower middle class and poor families who get in, with financial aid often paying for 50-100% of tuition, the rest made up by low interest loans, pell grants, and outside scholarships.
Further, I think a much better use of money at top schools is research. Why should kids who are nearly all from well-off families, and all of whom will probably be rich themselves, get the money from the endowments rather than research that will benefit all humanity by advancing man's knowledge.
Don't look any further than the FAFSA. The Feds calculate student 'need' based on family income. The difference between student costs and that 'need' is made up through 'financial aid', which includes a lot of government money to the school. If tuition were zero, students wouldn't be eligible for as much in Pell Grants, state grants, subsidized loans, etc. as they are when tuition is $40,000 per year. Having a high tuition probably brings in an extra $10-20k per student per year for the big privates. And hey, if they can get the richer students and their families to pay their own freight, that is $40k in free money to put toward that new Administration building they've been eyeing, or to keep their star Polynesian Studies professor(last book: Gay Guam and Tranzi Tahiti - Queer culture in the Archipelago) from bolting to Lord University for $100k plus benies to teach two seminars each year, with 3 grad students in one and half a dozen seniors in the other.
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