University Endowment Abuse

[TrueMaroonGrind]

I recently was listening to a podcast about college education and the host went on and on about University endowment abuse. Universities and colleges are normally not for profit, so the government doesn't tax their revenue and that includes investment returns. I was curious, so I started looking at the numbers. The most shocking are below:

Harvard - $35B
MIT - $13B
Princeton - $22B
Stanford - $22B
TAMU - $11B
Texas - $24B
Michigan - $10B
Notre Dame - $10B
Yale - $25B

It is very frustrating to see so man young people struggling with student loans when universities like these are abusing their non-profit status.

Mississippi universities' endowments:

MSU - $456M
OM - $606M
USM - $112M
Alcorn - $14M
JSU - $24M
MVSU - $1.6M(yeesh)

 

[Duke Humphrey]

You do realize the investment returns off the endowment.....

I recently was listening to a podcast about college education and the host went on and on about University endowment abuse. Universities and colleges are normally not for profit, so the government doesn't tax their revenue and that includes investment returns. I was curious, so I started looking at the numbers. The most shocking are below:

Harvard - $35B
MIT - $13B
Princeton - $22B
Stanford - $22B
TAMU - $11B
Texas - $24B
Michigan - $10B
Notre Dame - $10B
Yale - $25B

It is very frustrating to see so man young people struggling with student loans when universities like these are abusing their non-profit status.

Mississippi universities' endowments:

MSU - $456M
OM - $606M
USM - $112M
Alcorn - $14M
JSU - $24M
MVSU - $1.6M(yeesh)

Help fund scholarships, supplement faculty salaries, fund graduate assistantships, programming for students, facility improvements, etc, etc

 

[patdog]

They also pay executive salaries of up to $3.8M for the highest paid executive of Yale's endowment. That salary is 6 years old, so it's probably considerably more now.

 

[paindonthurt_]

Yes and I imagine the guy making $3.8 mil is making it bc he is doing good at his job. He's also paying a **** ton in taxes himself.

 

[dawgatUSM]

Harvard has somewhat recently started offering full scholarships to people from lower income classes that meet the academic requirements. I don't think that's abuse.

 

[thatsbaseball]

What does "lower income classes" mean ?

 

[8dog]

Endowments are built through gifts. They are not related
to tuition student debt.

 

[bsquared24]

I assume that most universities are like mine and you never touch the principal of the endowment. What is available to spend is what is earned off the principal each year. Now with those insane numbers it wouldn't hurt to spend some principal but that's not the way it's done. Also I think a lot of U self insure up to 1 or 2 million at least.

 

[olblue.sixpack]

They also pay executive salaries of up to $3.8M for the highest paid executive of Yale's endowment. That salary is 6 years old, so it's probably considerably more now.

If you think the Louisville basketball strippergate is a scandal, google the UofL foundation. They've paid Denny Crum $6 million since 2010. You ever wonder why Tom Jurich didn't give Texas or USC a passing look when those AD jobs came open? Its because thanks to payments from the Foundation, he's making $5 million per year - $3 million more than the guy at Texas. And his son has gotten $800K for essentially doing nothing.

 

[missouridawg]

Revisionist History? Gladwell spoke on this topic during last season. He makes some interesting points.

 

[TrueMaroonGrind]

What does "lower income classes" mean ?

Right now it is around 60k household max. I think their lower 20% income population is about 4-5% of the student body. Giving all of the lower income kids free tuition is nothing given Harvard will get around $1.2B(4%) tax free return on their endowment every year.

 

[TrueMaroonGrind]

Of course I get that. My whole point is if you are building up this massive endowment that generates all this income tax free, something has to give. Tuition needs to come down, more scholarships or god forbid stop treating colleges like country clubs.

 

[TrueMaroonGrind]

Revisionist History? Gladwell spoke on this topic during last season. He makes some interesting points.

That would be it. He is a little too liberal for me, but he is intelligent and challenges my points of view. I have really enjoyed the series so far.

 

[jethreauxdawg]

Bern'd him good

 

[bulldogbaja]

I think that some podcaster toyed with your emotions. I'm not seeing the problem here. Endowments generate funds which generally provide scholarships to students. If the returns were taxed... Less people would be able to go to college and the government would probably have a few more fighter planes.

 

[UpTheMiddlex3Punt]

Gladwell is downright unscientific. He makes some clever arguments that on the surface are reasonable, but some of his stuff, especially his early works like "Tipping Point" are far more hypotheses than conclusions.

 

[mount lefroy]

Gladwell is downright unscientific. He makes some clever arguments that on the surface are reasonable, but some of his stuff, especially his early works like "Tipping Point" are far more hypotheses than conclusions.

Then scientifically refute them or Stfu.

 

[HammerOfTheDogs]

Help fund scholarships, supplement faculty salaries, fund graduate assistantships, programming for students, facility improvements, etc, etc

You have a $35 billion endowment, you should be able to pay for the upkeep of the school, the salaries of every employee on campus, and the room, board, tuition, and books of every student just off the interest.

Big College is a scam.

 

[HammerOfTheDogs]

Then scientifically refute them or Stfu.

Big College is a racket that's far worse than "Big Oil", or even "Big Government". Big College has made it to where nobody can get a decent job without a Bachelors degree of some kind.

For example, why do you need a degree to be a fireman or policeman? Yet, it's slowly turning into that. Even engineering is slowly going to require its students take Masters Level courses to become a licensed and registered engineer.

The Inflation rate of colleges for the past 30 years has been 7.8%, as opposed to 2.5% for everything else in America. When I was in school, I could work my *** off in the summer and pay for my school. Now, even if a kid can get more than 40 hours a week in the summer and 20 hours a week during the school year, he still has to take out loans to get through school.

With price inflation and grade inflation, Big College is a racket that threatens to put AMerica into bigger debt than it already is.

 

[DerHntr]

You have a $35 billion endowment, you should be able to pay for the upkeep of the school, the salaries of every employee on campus, and the room, board, tuition, and books of every student just off the interest.

Big College is a scam.

Considering that Harvard is a private university, they could do whatever they want. They could even create such an exceptional worldwide reputation that the wealthiest people on the planet want to send their children there for an education. They pay handsomely for that education and then later when it's time to raise endowment funds, they end up with $35B.

 

[512taylor]

Then scientifically refute them or Stfu.

Now, that's a mature reply.

 

[goodknight]

Hmmm, Penn not on that list but an Ivey League school. My oldest was being recruited to attend and all the literature and information we got from indicated one of their goals was for all students to graduate debt free. Work study, grants and scholarships. They too have a large endowment

 

[TrueMaroonGrind]

Don't get it twisted. I don't believe any of the state universities in MS should have their endowments taxed. Those universities with over 10 billion dollars in endowments should probably be taxed. I would probably take into account the university's enrollment size as well. If you don't see an issue with non profits stockpiling over 10 billion dollars and getting all the investment return from that and still raising tuition at a 12% rate year over year, then you and I must have different ideas about how non profits should ethically operate.

 

[o_fredgarvin]

Hmmm, Penn not on that list but an Ivey League school. My oldest was being recruited to attend and all the literature and information we got from indicated one of their goals was for all students to graduate debt free. Work study, grants and scholarships. They too have a large endowment

What that means is they don't want them to take loans; they want you to take loans out.

 

[BiscuitEater]

Help fund scholarships, supplement faculty salaries, fund graduate assistantships, programming for students, facility improvements, etc, etc

Show me the financials where Harvard is do that with income on $35B.

Harvard	$35B
Yale	$25B
Texas	$24B
Princeton	$22B
Stanford	$22B
MIT	$13B
TAMU	$11B
Michigan	$10B
Notre Dame	$10B

<tbody>
</tbody><colgroup><col><col></colgroup>

 

[LilSebastian]

1. Big oil isn't a racket, I'm at a loss for how it could be. You'd have to be a conspiracy theorist to connect enough dots to truly believe higher ed to be a racket.

2. You don't need a degree to be a policeman or firefighter. Increasingly you're seeing a 4-year degree as a requirement as a heuristic for commitment. The state governments heavily subsidize BLET & fire certs at community colleges, where you can get them in less than 6 months. A lot of bigger towns have more generous benefits and higher hiring costs per employee. They can't afford to have someone come in, decide it isn't a life for them and quit, so they require 4 year degrees.

3. Per student costs have tracked inflation. Tuition skyrockets because states take money out of higher education like it's the damn piggy bank.

 

[mstateglfr]

If the comment and Nexus research below is accurate, its insane. Not sure how it can be justified.

http://www.npr.org/2015/08/22/43373...chests-malcolm-gladwell-sees-obscene-inequity
Yesterday, I tweeted from a study that was done by this group called Nexus which calculated the per student annual taxpayer contribution for different kinds of educational institutions in this country — so, the value of all of the money taxpayers give institutions. For the typical community college in this country, it comes out to [between $2,000 and] $4,000 per student per year. For a typical state school, it's $10,000 per year. For Harvard, it's $48,000 per year. For Yale, it's $69,000 per student per year. And for Princeton, it's $105,000 per student per year of taxpayer subsidy.
That's obscene! That's why I'm upset. that's why I go on these twitterstorms, and that's why people like Victor Fleischer write op-eds! Because there's something wrong with a society that spends 50 times more subsidizing the students at Princeton than it does subsidizing the students of a typical community college. That's wrong.
http://nexusresearch.org/wp-content/uploads/2015/06/Rich_Schools_Poor_Students.pdf

 

[johnson86-1]

If the comment and Nexus research below is accurate, its insane. Not sure how it can be justified.

http://www.npr.org/2015/08/22/43373...chests-malcolm-gladwell-sees-obscene-inequity
Yesterday, I tweeted from a study that was done by this group called Nexus which calculated the per student annual taxpayer contribution for different kinds of educational institutions in this country — so, the value of all of the money taxpayers give institutions. For the typical community college in this country, it comes out to [between $2,000 and] $4,000 per student per year. For a typical state school, it's $10,000 per year. For Harvard, it's $48,000 per year. For Yale, it's $69,000 per student per year. And for Princeton, it's $105,000 per student per year of taxpayer subsidy.
That's obscene! That's why I'm upset. that's why I go on these twitterstorms, and that's why people like Victor Fleischer write op-eds! Because there's something wrong with a society that spends 50 times more subsidizing the students at Princeton than it does subsidizing the students of a typical community college. That's wrong.
http://nexusresearch.org/wp-content/uploads/2015/06/Rich_Schools_Poor_Students.pdf

I can almost guarantee without even looking that they are being misleading with those numbers. They are either divying up all the research dollars (which are not a subsidy to students) or they are assuming that endowment returns should be taxed and counting the tax exempt status as a "subsidy".

I could be wrong, but I can't even think of how they'd get those numbers based on actual subsidies.

 

[UpTheMiddlex3Punt]

Oh, where to begin.

There is no proof behind his 10,000 hour rule. Sure, there's a correlation between deliberate practice and success, but there is nothing magical that happens at or around 10,000 hours. It sounds compelling, but there are plenty of successful bands that start up with musicians with far less practice, or software engineers who achieve success with little programming experience. There are others who put in plenty of time and never come close to success.

The whole of The Tipping Point provided a neat theory about how information spreads, but ultimately relied on survivor's bias to find common aspects of a few cases. Large scale studies have not proven that there are a few critical points required for the success of spreading information, increasing popularity of an ad campaign, etc. The rest of the book was fun, but ultimately were just theories.

 

[HammerOfTheDogs]

I know Big Oil isn't a racket. It was Big oil that put me through college (two summers working as a roustabout for Mobil Oil).

I was just making the point that Big College is worse than the usual boogie-bears.

 

[615dawg]

What does "lower income classes" mean ?

Under $100,000 AGI, Ivy League, Duke, Vanderbilt, Stanford et al gives you full tuition, room and board, books, etc.

Phases out up to $250,000 before you are expected to pay full price.

Its one of the biggest reasons that Stanford, Duke and Vanderbilt (albeit limited) have been able to compete so well, especially in non-revenue sports. I just had a family member receive offers in a minor sport from South Alabama (1/3 scholarship offer), Troy (1/2), Jacksonville State (1/3) and Dartmouth (no athletic scholarship). AGI was under $100k so everything was taken care of.