On Tuesday, the New York Times ran a brief article, “College Presidents Defend Rising Tuition, but Lawmakers Sound Skeptical,” (9/9/08, A18) that inquired into the question, “Should colleges be required to spend more of their endowments?” Of course they should is the only logical answer. It all seems so reasonable. Together Harvard and Yale are sitting on endowments of approximately $60 billion. Universities earned an average of 17.2 percent on their assets but spent less than 5 percent. And they are tax exempt! Does this make any sense? The average tax payer is subsidizing universities with billions of dollars in assets.
One of the clearest indications that these elite colleges are just scamming the public are the comments from the wealthy universities that if they were required to spend a certain portion of their endowments, it would “interfere with their ability to manage economic downturns.” Surely these people must think we’re idiots if they expect us to swallow that level of argument. What kind of economic downturns would pose problems for universities with billions of dollars earning double digit interest?
This is not to say that colleges should not have large endowments but it is to say that if they have endowments in the billions, they should spend a substantial portion for the general good and they should not be tax exempt. After all, why should every citizen in this country subsidize universities that have assets of 10, 20, and 30 billion dollars? It just doesn’t make sense.