One of the top economic issues for voters is the vast economic inquality in the country, according to Gallup polling.
At a time when many families are buried in student loan debt, The New York Times ran a recent op-ed called “Stop Universities From Hoarding Money.”
Author Victor Fleischer pointed out that last year, four of the nation’s wealthiest institutions, including Yale, paid more money from their endowments to private equity fund managers than tuition assistance, fellowships and prizes for students.
Fleischer is a law professor at the University of San Diego. Speaking on WNPR’s Where We Live, he called that “backwards” and worthy of attention, because universities are tax-exempt institutions.
“And so we all have an interest in making sure that entities that are tax subsidized are using their advantages properly,” Fleischer said. “Yale is a very successful investor, and if they think the best way to grow the endowment is to invest in private equity, I’m not going to second-guess that decision. But I think as a member of the public, I think it’s right for us to ask: are they spending an appropriate amount of that money to advance the charitable mission.”
Fleischer is calling on Congress to set requirements for universities with endowments larger than $100 million to spend a certain percentage of their endowments on students.
In a statement, Yale officials said the Times op-ed rested on speculation about endowment management costs, and obscured how much support the endowment actually provides for Yale. The university’s press secretary Tom Conroy said it’s also important to recognize how affordable Yale is.
“Because that’s really we’re concerned about: endowments, and how much of endowments are spent,” Conroy said on Where We Live. “Yale just welcomed a freshman class, and 64 percent of those students are receiving financial aid. And the average grant is $42,000. At the end of their careers, because of this financial aid, very few Yale students borrow any money to go to Yale. And the ones that do borrow much less than the national average.”
Yale spends $1 billion from its endowment on operating costs per year, $170 million of which goes to student aid.
