Columbia University is sitting on a 14.8 billion dollar endowment. Johns Hopkins's endowment is more than $13 billion. Both schools, as well as hundreds of others, receive hundreds of millions of dollars in state tax funds.
It's the dirty little secret of universities and colleges. It makes the student loan business completely unnecessary. And it makes these university's cries of anguish at the cutting of a few hundred million dollars in federal government grants ring hollow.
American universities are wallowing in wealth. "They live off giant subsidies in the form of limitless federal lending, which allows them to raise prices endlessly and spend endlessly on administrative bloat, rarely passing savings to students while always fattening endowments," writes Matt Taibbi.
Colleges are expensive because the trustees and administrators want it to be expensive. They have zero incentive to lower the cost of going to college. They can charge whatever they want because they are secure in the knowledge that Uncle Sam will pay whatever they ask.
This has led to an obscene amount of money just sitting in endowments and other funds doing absolutely nothing except earning interest.
All of these grant programs that fund specialized research ("tracking the long-term health of children born to mothers infected with the coronavirus during pregnancy" is one example from Columbia given by the New York Times) could easily be funded by the schools themselves.
"They’re choosing not to, just as much as Musk is. No matter what you feel about the cuts, watching a cash machine like Columbia plead poverty is obscene," adds Taibbi.
Between the Davos-style architecture projects and annual gloating headlines about the endowment gains schools like JHU and Harvard tend to with the care of British gardeners, any complaints from universities about the loss of even large amounts of federal dollars is hard to take. It’s easy to feel sorry for affected workers and researchers, but these are ultra-wealthy institutions who despite being run by (in many cases) utter morons have been gifted a profitability model more riskless than too-big-to-fail banking or NFL ownership. It’s almost impossible for Ivy League schools to lose money, which makes one wonder about professors who say they’re being “picked apart and destroyed” because their school is losing $400 million of taxpayer funds while sitting on $20 billion in assets (or in the case of Harvard, losing $686 million when it’s sitting on a $53 billion). Do they know what that sounds like?
It's nauseating. So how do they justify it?
They compete on status, handing out degrees in self-obsession and intersectional horses**t that are useful for upper-class networking and not much else. Like military contractors their one important customer is the state, for whom they often perform services that are not just useless but outright antisocial. In the last years, taxpayers have sent hundreds of millions to support censorship, gain-of-function research, and a galaxy of idiotic DEI programs that mainly serve as job programs for skill-deficient upper-class neurotics. The DiAngelo-style racial weirdness is far less of an issue than the sheer uselessness of these armies of DEI officials who came to dominate campuses in recent decades, in a manner eerily like the political officers at the Soviet school I attended in 1989.
Taibbi's recommendations are brutal. "These institutions are so myopic and intrinsically exploitative that they can’t be fixed without first being taken apart," he writes. Many of these schools have powerful friends, and "taking them apart" will prove to be difficult, if not impossible.
If they can't be taken apart, then the laws governing funds like endowments and other financial mechanisms need to be adjusted. Perhaps, for donors to receive the tax benefits of donating to a school, a percentage of the fund must be used to lower tuition or subsidize minority students.
A way must be found to unlock the treasure chest that these arrogant sots are sitting on.
