Yale: $42 billion. Princeton: $38 billion. Columbia: $14 billion.
All told, it’s as if the Ivy League added another Harvard to its combined fortune in the space of a single year. The investment gain in the last fiscal year for the eight members: about $50 billion, for a total of more than $190 billion in assets.
Call them the ivory tower’s 0.1%. Like America’s hyper-rich, the nation’s elite universities are amassing vast wealth with astonishing speed -- and raising some uncomfortable questions in the process.
Amid the running debates over the cost and value of a college education today, two key issues loom large. The first: To what extent should rich institutions like Harvard, with sticker prices approaching $80,000 a year, share their growing wealth with students? And should they -- the Elon Musks and Jeff Bezoses of higher education -- pay more in taxes?
With their newfound wealth, schools are bolstering financial aid and seeking to improve affordability for low-income families. They’re increasing faculty and staff benefits and also using some money to offset the financial hit from the Covid-19 pandemic.
At the same time, colleges have been lobbying against a tax on schools with endowments of at least $500,000 per student since it was passed in 2017 as part of a Republican-led tax reform. It affects roughly three dozen schools including Harvard, Yale and Princeton. The Democratic plan announced in September for President Joe Biden’s then-$3.5 trillion economic agenda curtailed the tax as long as schools addressed tuition costs. But that provision was removed in early November.
“The expectations of these colleges needs to be higher,” said Bob Shireman, deputy undersecretary of the Education Department in the Obama administration.
At Yale, the value of the endowment rose by $11 billion in its last fiscal year. The school committed $3 million to increased undergraduate financial aid and plans to reduce the amount students are expected to contribute to their education by more than 30%. It’s also adding a child-care stipend for staff and faculty and enhancements to the parental leave policy. Yale has said it plans to increase the financial support it gives its hometown of New Haven, Connecticut. Details of those plans are expected to be announced on Wednesday.
Harvard, which saw the value of its endowment rise $11 billion for the year ended in June, increased the amount the fund distributes to the school’s budget by 2.5% instead of a planned 1%.
The school said it provides about $600 million in financial aid and has lifted a 2020 hiring freeze for non-union employees. Harvard says 20% of undergrads pay nothing to attend and more than half receive scholarships based on family finances.