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.