Should Harvard Last Forever?
posted by Frank Pasquale
Set in the year 3172, Samuel Delany’s novel Nova envisions a future where virtually everything has changed…except for the persistent Harvard University, home to the “eccentric, the brilliant, and the very wealthy.” As Harvard’s endowment balloons to $35 billion, Delany’s work looks less like fantasy and more like prophecy. In our day huge sums of money are the “monumentum perennium” Horace once deemed poetry.
But a former aide to Lynne Cheney has been crusading for wealthy universities to spend more of their endowments, and may be winning the battle of public opinion:
Lynne Munson dismisses Harvard University’s new plan to spend $22-million more annually on student aid as “miserly.” She says Yale University could have shown more leadership by pledging to spend at least 5 percent of its endowment each year, rather than the 4.5-percent minimum it announced last week. And she contends that dozens of other wealthy colleges . . . are guilty of “hoarding” because they do not spend enough to help keep tuitions down.
There are lots of tricky issues here, complicated by an increasingly winner-take-all society and the pernicious USNWR rankings rat race. As the compensation of I-bankers and CEOs rises to stratospheric levels, the top universities may feel that they have to keep raising their own salaries to keep pace. Moreover, competitive pressures are going to lead more universities to try to increase their average incoming SAT scores by offering merit scholarships and providing other amenities.
Robert Frank has proposed curbing that kind of “positional competition” with progressive taxes. Will a spending requirement for endowments have similar effects? Republican senator Charles E. Grassley appears to believe that it will at least lead to tuition relief; he has said
requiring wealthy universities to spend a higher percentage of their endowments could help “more working families see the benefits” of lower tuition bills. . . . The Senate proposal, which has yet to be introduced as legislation, could require rich universities to spend at least 5 percent of their endowment, as private foundations are now required to do, or lose the tax exemption they enjoy on their endowment earnings.
Seems like a fair proposal to me–and it also gives wealthy schools ample opportunity to keep open (in some form) to the end of time.
January 15, 2008 at 9:31 pm
Posted in: Education
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Responses (14)
blackminorca - January 16, 2008 at 8:25 am
Harvard should die a thousand deaths NOW.
Ukrainian Americans funded a research institute there many years ago and after many years of silence on the question of communist genocide, they have just sponsored a seminar to announce “there is no smoking gun”.
http://cybercossack.com/?p=853
Att: Chinese Americans! Expect the “Mao Cafe” at Harvard Yard before this bastion of leftist/relativist obfuscation tells the truth about the 60’s.
http://www.samizdata.net/blog/archives/2008/01/samizdata_quote_295.html
Taxman - January 16, 2008 at 9:16 am
Rather than require them to spend a certain percentage of their endowment each year, I would prefer that they lose tax exempt status once their endowment reaches a threshold (5 billion?). Donors would then find alternative targets for their donations, and other universities would benefit.
Al Fin - January 16, 2008 at 10:08 am
The donating public needs to see more films like Indoctrinate U. Once they understand what universities are doing to the youth of North America most will have second thoughts about donations and bequests.
A guy at Harvard - January 16, 2008 at 10:54 am
It should be “monumentum perenne” (perennius is the comparative).
H is not a completely one-minded place. Of course it isn’t as good as what we think the best should be. In the end, I think, the market will decide whether it keeps its position, or how much money it will need to spend so as not to slip. But any change will be gradual, because H is a big, old institution, run by people who are conservative (practically, if not politically) in the extreme.
Richard R - January 16, 2008 at 11:25 am
How about, instead of just spending money for student tuitions, they expand? It’s been 50 years since a major new university was started, but our population continues to expand. The Ivy’s now regularly turn down students with perfect GPA’s and top .1% SAT scores. I went to Yale in the 80’s and was accepted at several highly competitive schools, I couldn’t get into any of them today.
In any other business where you’re turning away 90% of your potential customers, you’d take it as a cue to expand your capacity.
David Govett - January 16, 2008 at 12:12 pm
Why waste money at Harvard? A free PhD diploma from Japanorama University is available online at http://www.japanorama.com/images/diploma.gif.
alan - January 16, 2008 at 1:02 pm
The wealthier universities need to pay (a higher percentage of their endowments to keep tuition low) “their fair share!”
PersonFromPorlock - January 16, 2008 at 1:48 pm
I’ve been advocating for some years now, semi-seriously, a federal tax on hiring college graduates; a thousand a year per employee with a BA, $2000 per MA and so on. I suspect employers would discover very quickly that they didn’t really need all those college graduates and the bottom would drop out of college enrollment and tuition.
Jim - January 16, 2008 at 1:59 pm
The problem with higher education is similar to primary and secondary education, in that both are essentially still early 20th Century institutions. You go sit in a classroom with 20 to 200 other students, and take notes for 12 or 13 weeks, maybe hand in some homework, take a few tests, and take a final. Where is the possible transition to a 21st Century possibility? I suggest each major university, public and private, modify 10 to 20 classrooms for internet broadcast / TV recording / audio recording and broadcast, and put their best professors in there, and use ther endowments to reach a far broader audience, and at much less cost. President Bush has an MBA from Harvard. Why couldn’t Harvard use YouTube type technology to broadcast its MBA lectures, via a secured / password protected connection available 24 hours a day, to interested students nationwide, for a reasonable fee, say fifteen percent of what it charges somebody to come to Harvard and sit in its classrooms? If a paper, or homework, or a test, can be taken on a computer, it could be submitted via e-mail. Imagine teaching not 50 students, but 500!
I believe all colleges and universities should try and aline their course offerings so that Marketing 4320 is the same at the Wharton School of the University of Pennsylvania, and at Nebraska, Notre Dame, Georgia, Ohio State, Northwestern, Rice, Duke, Maryland, and so on and so forth. A student who would otherwise be stuck taking a course on campus at the U. of Whereever could instead take an online / YouTube course from a university thousands of miles away, at a reasonable cost, and avoid incompetent or shody teaching. I wish I had had this opportunity 40 years ago.
Sarah - January 16, 2008 at 3:25 pm
Jim: Uh, have you heard of the OpenCourseWare Consortium? I have course materials from MIT (though none of it is marketing stuff) downloaded to my hard drive, for free. Harvard has some stuff, though they’re mostly public health courses.
Having universities held to the same endowment standards (for tax purposes) as other charitable organizations makes sense to me.
And never mind Harvard: I expect that in 3172 most if not all of the universities that were around in 1700, that are around in 2008, will still be around: I have a map of Europe that lists major universities alongside the year they were founded, and I imagine Harvard (and Yale) will *always* be a Johnny-come-lately from their perspective.
Fat Man - January 16, 2008 at 8:37 pm
Taxman above is on to something. Institutions that pile up money in excess of a prudent capital reserve and fail to spend at least their income (including capital gains, and imputed at a minimum rate of 5%) plus a portion of their excess principal should be taxed, and taxed heavily. Their donors should not be eligible for tax deductions on new donations until the institution comes back into compliance.
Fat Man - January 16, 2008 at 8:43 pm
Note: That Chronicle link is subscribers only.
Brutus - January 17, 2008 at 3:43 pm
Harvard is using the money to buy up every piece of property nearby as soon as it comes to market, both in Cambridge and across the river in Allston, a funky Boston neighborhood, for which they will pay NO property taxes.
Boston, more than any other city, gets killed by all the tax-exempt colleges and universities within its borders. The local press covers the “payment in lieu of taxes” they make every year, and to call them a pittance is to be generous!
punditius - January 23, 2008 at 9:27 pm
The universities remind me of the monasteries during the middle ages. They piled up the wealth, & paid no taxes. IIRC, the Henry VIII solution was to burn them down.
Short of that, I agree something needs to be done to bring these places back to reality. There’s no reason that they should be exempt from state & local property taxes, for instance. That’s a holdover from the 19th century, for crying out loud.
Ain’t gonna happen, though.
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