HIGHER EDUCATION BUBBLE UPDATE: How Much Should the Government Subsidize Harvard?

Donald Trump made headlines a few weeks ago by suggesting on Twitter that the federal government should cut off funding to UC Berkeley as a result of the Milo incident. While this provocation was characteristically hyperbolic (probably intentionally so) a growing number of serious thinkers really are considering ways that the government might substantially restrict the flow of subsidies to selective American universities whose priorities aren’t necessarily in line with the public’s. . . .

There are indications that policymakers and voters might be drawn to some of these ideas. Connecticut’s Democratic legislature recently mulled the tax-exempt status of Yale’s $23 billion dollar endowment. Residents of Princeton, New Jersey filed a lawsuit (settled in the fall) to force their local university to pay property taxes. And Congressional Republicans have been scrutinizing the way well-endowed colleges spend their tax-subsidized war chests.

Academia likes to think of itself as an independent enclave and that any government pressure to change its ways (unless it is in service of leftwing ideological goals in areas like Title IX or affirmative action) amounts to an attack on the integrity of higher education. And while universities should be afforded broad latitude to govern themselves, it’s important for academic leaders to remember the extent to which they are reliant on a massive network of government subsidies—both in the form of explicit grants and carveouts woven into the tax code—and that the political basis for their privileged position is looking more tenuous by the day.

They seem clueless about this.