American politicians on both sides of the aisle are starting to criticize college and university endowments. Are we seeing a bipartisan approach emerging?
Recently we’ve seen rising political interest in the size of the biggest university endowments, seen in the contexts of income inequality, uneven education outcomes, and ongoing concerns about college affordability. Last month several Congressional Republicans made high-profile calls for the most highly funded campuses to think about new ways of allocating those funds.
Those Senators and Representatives were all on the GOP side, so this could have been a partisan move in a very politicized climate. As Michael Stratford observed,
it’s not yet clear if Democrats, who have been pushing student loan debt as an election-year issue, will join in on efforts to go after university endowment spending. Some House Democrats said at a hearing last year that they thought the focus on endowments was a side issue from more pressing concerns on student loan debt.
Except now some Democrats are getting in the game. These are state-level Dems, not national, but they’re in one of the bluest states, Connecticut, and have drawn a bead on the second-biggest university endowment in the world.
Supporters of the bill want Yale to spend more money to expand access to higher education and “create innovative, high-paying jobs,” Martin Looney, a Democrat who presides over the Senate and whose district includes Yale’s campus in New Haven, said in written testimony submitted for a committee hearing on March 22.
Listen to the language of class and inequality:
“It is our hope that these rich schools can use their wealth to create job opportunities, rather than simply to get richer,” Looney said, adding that Yale “possesses the resources to have an even greater impact on our economy.”
What motivates such a proposal? Bloomberg has one answer:
Connecticut is facing a $266 million shortfall for fiscal 2016, according to the state Office of Fiscal Analysis, and taxing the endowment’s earnings could help close the gap.
Yale responded very quickly and defensively:
Richard Jacob, the school’s associate vice president for federal and state relations, said in written testimony that the bill and a second one that would tax college property are a “specific attack on higher education.”
“The proposed taxes on Yale would diminish the university’s ability to carry out its charitable mission and to enable and support growth in New Haven,” Jacob wrote. “Yale’s generous financial aid policies, which enable Yale College students to avoid any loans, and which waive any parent contribution for low-income students, exist because of the endowment.”
Back to those political critics, who are now both Republicans and Democrats. Will they align on this score to target very large endowment funds? There is some political hay to be made, especially among younger people.
Or is it too early to call, based on too small a sample size: a handful of Congresscritters and a lawmaker in one state out of 50?
Let’s watch this trend carefully.