America’s already stratified system of higher education
Allan T. Demaree, a retired executive editor of Fortune magazine, gladly makes donations to Princeton University, his alma mater, even though he knows it has become one of the wealthiest educational institutions in the world. His son, who also went to Princeton, points to its endowment of $15.8 billion, and will not give it a penny.
While he was president of Harvard, Lawrence H. Summers used endowment returns for expansion, financial aid and research.
“Why give money to an institution that can seemingly live off its interest when other very deserving entities need money to function tomorrow?” asked the son, Heath Demaree, a professor at Case Western Reserve University who instead donates to Virginia Tech, where he was a graduate student.
His question captures how the wealth amassed by elite universities like Princeton through soaring endowments over the past decade has exacerbated the divide between a small group of spectacularly wealthy universities and all others. If Harvard has $34.9 billion or Yale $22.5 billion, fewer than 400 of the roughly 4,500 colleges and universities in the United States had even $100 million in endowments in the fiscal year that ended in June. Most had less than $10 million.
The result is that America’s already stratified system of higher education is becoming ever more so, and the chasm is creating all sorts of tensions as the less wealthy colleges try to compete. Even state universities are going into fund-raising overdrive and trying to increase endowments to catch up.
The wealthiest colleges can tap their endowments to give substantial financial aid to families earning $180,000 or more. They can lure star professors with high salaries and hard-to-get apartments. They are starting sophisticated new research laboratories, expanding their campuses and putting up architecturally notable buildings....