Sunday, December 10, 2017

Ivy League Billions: Sponsored by the American Taxpayer

Despite cumulative endowments of $119 billion, we're still paying big for these eight elite universities

Open the Books, an organization dedicated to transparency of government spending, tracks and publishes government spending online and serves as one of the largest private databases of government spending in the world. Their motto, “Every dime. Online. In Real Time,” reflects their mission of making government spending transparent and accessible to the public. Open the Books publishes a report every quarter, focusing on an aspect of government spending.

Earlier this year, they published an oversight report entitled, “Ivy League, Inc.,” which reveals the government money and tax privileges granted to the eight colleges of the Ivy League: Brown University, Columbia University, Cornell University, Dartmouth College, Harvard University, the University of Pennsylvania, Princeton University and Yale University.

The endowments for these universities range from $3.2 billion (Brown) to $35.7 billion (Harvard). As Open the Books Founder and CEO Adam Andrzejewski wryly remarks in Forbes, “Many pundits describe the Ivy League as ‘a hedge fund with classes.’” Open the Books notes that the combined endowments of the universities ($119.4 billion) could fund a full-ride scholarship for all Ivy undergraduate students for the next 51 years. As non-profits, the government does not tax the Ivy League schools on their endowment earnings. So, they not only operate like a hedge fund, but a hedge fund with tax privileges.

While the Ivy League certainly commits no error in freely raising money from alumni and private donors, the Open the Books report reveals how the Ivy League profits off of taxpayers who pay the Ivy League whether they want to or not. Tracking government payments and entitlements for six years (FY2010-FY2015), Open the Books discovered the total Ivy League cost to taxpayers as $41.9 billion, or about $6.93 billion per year. This number includes payments, subsidies and special tax treatment. In terms of total government money received, 16 states (including South Dakota, North Dakota, Hawaii, Utah, Alaska and Montana) receive less government money per year than the Ivy League does. In other words, entire states take less government money per year than a group of eight universities, each of which have multi-billion-dollar endowments. They don’t need the money, so why are they receiving it?

Lobbying for their interests seems to be part of the answer. Open the Books reveals that between 2010-2014, the Ivy League spent $17.8 million on lobbying Congress to advocate for their interests. This explains the preference given to the Ivies, and the billions of dollars granted to these institutions in federal contracts, subsidies and tax privileges.

While government grants and contracts make sense in terms of groundbreaking medical research, they don’t make sense in terms of the unnecessary research funded by the American taxpayer. Consider the following grants:

$137,530 from the National Science Foundation to Dartmouth College to fund the making of a video game entitled “Layoff.” In this game, the player must fire employees until he or she receives a bank bailout. In the game, bankers are invincible and cannot be fired.

$53,419 from the National Institutes of Health (NIH) to Brown University to study whether homosexual men and male sex workers in Mexico City would decrease the number of sex partners and/or use condoms if the government paid them.

$5.7 million from the National Science Foundation to Columbia University to develop a website entitled Future Coast. The website allows visitors to leave voicemails describing how they think the world will be changed by destructive climate change in the future (2020-2065). Examples include a dwindling Alaska and a California without water.

Most people do not object to private research to fund such projects. If a person wants to develop a video game or study sexual habits and incentives of men in Mexico City or listen to fictional voicemails, why not? But these people should do what the rest of the country does: raise capital, fundraise and involve their friends. The American taxpayer should not have to shoulder the cost.

In fact, the Ivy League receives more money from their government contract “side gig” ($25.27 billion) than they do from student tuition payments ($22 billion). This prompts the question, Is their government contract “business” a higher priority than their students?

Further, the Ivy League schools receive an enormous $3.7 billion tax break in local government property taxes. Open the Books estimates that with regard to local property taxes, the Ivy Leagues should be paying approximately $617 million per year. However, due to the lost revenue, residential property taxes in the surrounding areas are 20-30% higher. In the case of Princeton University, residents sued the school, and won a settlement of $18 million.

Ultimately, the Open the Books report on the Ivy League shows taxpayers what has really been happening to their money. While the Ivy League should be able to maintain their status as top universities, the time has come to re-examine how much, if any, government money they should receive.

When we place all the issues facing our country on the table, government money should be prioritized toward keeping our communities safe and encouraging human flourishing, not toward contributing to the billion-dollar corporatism of the Ivy League. They can do that on their own.


Defining value: without expensive research, there’s no ‘higher’ to higher education

Higher education is expensive.  It is more expensive, in fact, than many people realise because many of the costs of higher education originate with a set of activities that are not well understood by outsiders. Teaching in its strictest sense is only one part of these costs. The most obvious other costs include research and public engagement.

There are two important points to be made that are lost in the current frenzy to assess whether higher education is “good value”.

The first is that if universities were not engaged in research and public engagement activities, there would be no “higher” to higher education. There is something special about the opportunity to study not simply with people who are excellent teachers, but with those who are at the cutting edge of developing new ideas about a subject. This kind of teaching is special, and it is expensive.

Similarly, there is something special about being part of an institution that has a broader responsibility to the public to lead evidence-based conversations, to intervene in political and social debates, to sponsor art and literature, to develop new technologies and make scientific discoveries. But, again, this is very expensive.

The second is the question of who gets to decide whether all of this is “good value”. Today’s story from the National Audit Office points out that just one in three students think that their degree is good value. I am not surprised. A student today pays up to £9,250 a year just for their tuition. This is a lot of money. On what basis can that student decide whether this is good value?

Let me suggest an analogy. Anyone who has lived in a country where healthcare is fully privatised will know what it feels like to realise just how expensive essential medical treatment is. If the UK government openly took the decision to privatise the NHS (which is a different proposition from the stealth privatisation of the past 20 years), one of the first things that would happen would be a newspaper campaign against rip-off doctors.

It would not matter that the vast majority of the cost of healthcare goes on facilities, equipment, medicines and insurance policies, because most people do not understand the cost of all these things. Patients are not customers. And neither are students. They are not “always right” and the value of higher education is not for them alone to decide. It is a question of the benefits that research and teaching bring to society as a whole.

Academics and universities are partly to blame. We have not done a good enough job of explaining what is special about “higher” education. Our students do not recognise the value of the unique privileges of being taught by leading researchers and of participating in public bodies that lead conversations. We could do much more to help them understand this.

But the fault is not entirely with the universities.

This discussion is the obvious and inevitable result of the introduction of tuition fees: placing the cost of universities on the shoulders of students encouraged in the belief that higher education exists only for their benefit. Asking them if they consider it good value confirms that we believe that they are capable of judging this. “Satisfaction”, after all, is not the same thing as “learning”.

And education is not a pick-and-mix market.

What comparison can students make to ascertain whether their education is good value? School, as I have tried to show, is a bad comparison, as schools do not perform the same functions as higher education. What about other universities? Perhaps the two-thirds of students who think that their education is bad value are comparing themselves with peer experiences? If so, this would be a good indication of what nonsense the measure is, suggesting that student perceptions are systematically dissatisfied, with students perceiving another’s experiences as better value than their own.

Or perhaps they are aware of the elephant in my blog post: the fact that England now has the most expensive tuition fees in the world?

But before jumping to any conclusions about the significance of this statistic, it is worth pointing out that England now has, in some senses, a completely different fees system to either Europe – where most universities retain the system of nominal fees that used to exist in the UK – or the US, where a few institutions charge exorbitant fees, many state universities charge fees below the English rate, and a range of other providers charge a lot less.

The fact that almost all English universities chose to charge the top rate offered by the government means that average fees are more than in the US. But in the US, a great many institutions of higher education are not performing the roles in research and public impact that almost all British universities carry out.

We could have that here, too, if that’s what the students and the newspapers whipping up this dissatisfaction want. Would they regret what we have lost once it is gone?


The root of the Left’s anger lies in our universities

Comment from Australia

As excited crowds of people lined up around the block to attend Milo Yiannoplous’ first Sydney talk last Tuesday, dozens of riot police corralled into a local park the large crowd of furious left-wing activists who were doing their best to stop the event happening.

Stirring them on were young women, mainly students from Sydney University, screeching into their megaphones while their frustrated audience entertained themselves taking selfies, brandishing crude signs and doing their best to provoke police.

It can’t have helped when they heard the 2000-plus crowd roar their approval as Milo attacked feminists and gender studies courses, debunked myths about wage gaps and campus rape crises, and challenged his audience to stand up to bullying leftists.

Milo has spent the past week giving interviews about his recent activities, including his tours of American universities which are successfully forcing administrations into allowing more free speech on campuses.

Key groups are now planning similar activities for Australian universities.

Milo announced this week in our YouTube interview that he was keen to return and take part. He’s just one of many social media heroes soon to be invited to these shores as part of a concerted effort to wrestle back higher education from what Milo describes as a “stiflingly homogenous leftist grip which is undermining the foundations of free society.”

While our Coalition politicians spent their time plotting changing captains on a sinking ship, they’d be well advised to take note of this proposed counter-revolution. Therein lies the only hope of rescuing their political parties from a very real threat to the future of conservative parties both here and abroad — the sharp turn left in women’s voting preferences.

Startling new data from the Australian National University, to be revealed in Inquirer in tomorrow’s The Weekend Australian, shows it is young women who are driving a major shift towards left-wing parties. Midst the complex reasons for this shift, left-leaning university education is at the heart of this trend — with women most likely to take the humanities subjects now stepped in Neo-Marxist and postmodernist ideology.

Those ferociously leftist young women trying to shut down Milo’s talks are set to join successive generations of women already voting conservative parties out of office — unless efforts to reclaim the universities prove successful.


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