Posted on 03/22/2019 8:15:01 AM PDT by reaganaut1
Nearly all American institutions of higher education raise money they put into endowmentsmoney that is kept invested in securities. At the same time, many of their students borrow money from the federal government so they can afford to attend.
As I will explain, this system is fraught with problems. It would be far better if colleges and universities would raise money to lend to students who need it to attend. I see several reasons why they should do so.
First and foremost, lending to students gives schools skin in the game.
Warren Buffetts billions stand testament to the wisdom of ensuring that people and institutions stand to lose if they dont deliver as promised. Alas, misaligned incentives plague higher education because major players have little skin in the game.
Most professors and administrators are good people, but that means little at schools that need student tuition payments in order to survive. The existential imperative at many American universities is to getand this is a direct quotation I have heard more than once in my quarter century in higher edasses in classes. What happens to students once they leave is of little concern. Whether they pay back their federal loans or not doesnt matter because the school has gotten its money. If the student flounders, that doesnt hurt the school.
Universities know more about their students than banks or federal bureaucrats ever could. They are therefore in the best position to make loan decisions. In the securities market, by contrast, universities hold no advantages. As this CNBC story points out, university endowments badly underperform market benchmarks and most institutions would have earned significantly higher returns just by putting their money into treasury bonds.
Universities purport to educate business, political, and social leaders but rarely lead reform movements themselves.
(Excerpt) Read more at jamesgmartin.center ...
Gun and Security Free Zones ?
What “return” do universities get from their students?
1) Alumni donations.
2) Word of mouth advertising.
3) Second (etc.) generation students.
Not all the time, not everybody, but a significant fraction.
A good time for Donald to step in.
Some of these elite schools are nonprofits; they dont pay taxes on profits their invested endowments make which saves them a lot of money.
One report noted that between the 2011 and 2015 fiscal years, the Ivy Leagues received a $9.6 billion tax break on the $27.3 billion growth of their collective endowments invested in public equities, fixed income, hedge funds, private equity, real estate and natural resources.
At the same time, the mega-rich schools receive tax dollars from the government for a number of purposes, which supposedly finance cutting-edge research, and millions in federal grants for other projects.
One report noted $10 million in federal tax dollars went towards sex-related research, ranging from Injury in Latina Women: Variability in Anal, Genital & Oral Injury in Women Consensual Sex to Skin Elasticity and Skin Color: Understanding Health Disparity in Sexual Assault.
Between 2010 and 2015, the eight Ivies received $23.89 billion in federal grants..... $10.6 billion of which came from the U.S. Department of Health and Human Services and the National Institutes of Health.
Other sources of federal education grants:
<><> the National Science Foundation,
<><> the Centers for Disease Control and Prevention,
<><> the Department of Defense, and,
<><> the Department of Energy.
Federal tax dollars also fund work-study programs and Pell Grants.
They Ivys have started giving more aid to middle class students because they were loosing many promising students to the second tier schools. They still need to attract the top talent and the rich to maintain their reps. The minoritys arent helping with that.
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