American higher education is becoming even more unequal, according to Moody’s. Universities with the largest endowments now own a larger share of the entire sector’s wealth than previously.
Some data to consider:
The 10 richest universities in America hold nearly a third of the total wealth, in cash and investments, amassed by about 500 public and private institutions. The 40 richest hold almost two-thirds of the total wealth.
The Matthew Effect is in play:
These schools are drawing an outsized share of gifts to colleges and universities. Their assets grew at at a far faster rate from 2009 to 2014 than the portfolios of schools in the middle and bottom of the pack.
Schools on Moody’s top-40 list saw assets grow by 50% between fiscal 2009 and fiscal 2014…
“It’s really a tale of two college towns, if you will, or cities,” said Karen Kedem, vice president and senior credit officer at Moody’s. “Looking ahead, the expectation is that this [gap] will only widen.”
“This is largely a continuation of a longtime trend”, notes Inside Higher Ed. It fits neatly, and sadly, into my New Gilded Age scenario. “For the richest colleges, though, the battle appears to be all but over — and they’ve won,” observes Lawrence Biemiller.
“What we see again and again is that the most elite universities are those universities who have the most wealthy alumni,” said David Callahan, editor of Inside Philanthropy.
That bifurcation is a trend in the American economy in general, and higher education, an economic engine in New England, is no exception.
So what is to be done?
One former university president offers a variety of recommendations for the rest of higher education, including saving money by sharing systems (yes!). William Bowen and Eugene Tobin argue that campuses would benefit from changes to faculty governance (I still need to read the book).
Jorge Klor de Alva and Mark Schneider offer a more radical, more political response. In a paper published by the Nexus Institute they call for the federal government to tax those wealthiest universities, then distribute the revenue to community colleges (pdf). Monies wouldn’t go to tuition, as per Obama’s plan, but to student support services. After all, community colleges are, by far, the least expensive higher education option, and their students often need the most help.
Maybe it’s time for a new politics of higher education. On the national stage, we could see presidential candidates offer competing plans to respond to this escalating academic inequality. If the old partisan positions return, Republicans would resist the Nexus plan, preferring to see the free market operate, while Democrats urge an academic New Deal. On the other hand, Democrats have often preferred to stay quiet, or actually go after colleges.
Within academia, will professors and administrators call for a Nexus plan? Will leaders of the richest institutions offer to share their wealth?
Or will we simply settle for the new order? We might not want to admit helping make a Piketty-style Downton Abbey of campuses, but will acquiesce to just living within it.