Glenn Harlan Reynolds in USA Today:
As former Labor secretary Robert Reich recently noted, Ivy League schools are government-subsidized playgrounds for the rich: “Imagine a system of college education supported by high and growing government spending on elite private universities that mainly educate children of the wealthy and upper-middle class, and low and declining government spending on public universities that educate large numbers of children from the working class and the poor.
“You can stop imagining,” Reich wrote. “That’s the American system right now. … Private university endowments are now around $550 billion, centered in a handful of prestigious institutions. Harvard’s endowment is over $32 billion, followed by Yale at $20.8 billion, Stanford at $18.6 billion, and Princeton at $18.2 billion. Each of these endowments increased last year by more than $1 billion, and these universities are actively seeking additional support. Last year, Harvard launched a capital campaign for another $6.5 billion. Because of the charitable tax deduction, the amount of government subsidy to these institutions in the form of tax deductions is about one out of every $3 contributed.”
The result? “The annual government subsidy to Princeton University, for example, is about $54,000 per student, according to an estimate by economist Richard Vedder,” Reich pointed out. “Other elite privates aren’t far behind. Public universities, by contrast, have little or no endowment income. They get almost all their funding from state governments. But these subsidies have been shrinking.”
More here. [Thanks to Ashutosh Jogalekar.]