EDITORIAL: Are universities rolling in dough?
Improving education isn’t reflected in schools’ spending patterns
Rutgers isn’t a wealthy school — in fact, it took almost 250 years to break the $1 billion mark in our endowment, and it was after University President Robert L. Barchi aggressively fundraised by regularly coaxing alumni and other wealthy benefactors.
While $1 billion is quite a high number, it still doesn’t mean much when that amount is spread thin among Rutgers’ 18 schools and 66,013 students. We’re still a poor institution — we were just much poorer before the $1 billion. And to put it into perspective, other public universities that haven’t stood as long as Rutgers are swimming in multibillion-dollar endowments, like University of Michigan—Ann Arbor or University of California, Berkeley, which have 10.26 billion and $4.045 billion, respectively. And these schools also have about 20,000 fewer students than Rutgers. But although our University is a financially modest institution, all in all it has done an excellent job over two centuries, turning coals into diamonds as it gave students a high quality education with its limited resources.
But something is wrong when a state university, which is supposed to be affordable, is less affordable than private institutions, namely elite private institutions. Some may say that’s fine, because high-achieving, low-income students deserve to go to school for free. It’s unarguably true that brilliant students who make under a certain amount of money should go to school for free, but when Ivy League schools like Harvard and Yale sit on $38 billion and $26 billion, they can afford to send all their students to school for free. They can send all their students to school for free, and then the rest of us.
Realistically, it won’t happen. Growing sums of money is positively correlated with growing prestige and bragging rights, which makes the University more exclusive. Universities are considered non-profit and can’t be taxed, after all.
Prestigious and wealthy schools shouldn’t be criticized or penalized solely because they’re prestigious and wealthy, however, what they do with billions of untaxed money deserves some scrutiny. Growing suspicion notably began when writer Malcom Gladwell tweeted, “I was going to donate money to Yale. But maybe it makes more sense to mail a check directly to the hedge fund of my choice.” And according to an article from The Nation that calls out universities for being billion-dollar hedge funds with colleges attached, Yale made hedge fund managers $480 million in 2014, but only $170 million was spent on things like tuition assistance or fellowships for students. A number of institutions have been increasingly for-profit, despite their de-facto categorization of being non-profit.
What private institutions do with their money is up to the up to them, but protests and widespread indignation would erupt if this display of disproportionate funding and demonstration of distorted priorities happened within the context of a public university like Rutgers. Universities were made to educate students, not to cater to private interests or accumulate wealth with no meaningful purpose.
Rutgers isn’t one of these schools that could be likened to hedge funds, but it’s still guilty of imprudently allocating money. The University doesn’t have as much money as the aforementioned, well-endowed institutions, but that only means there is less leeway for mistakes. Money has to be spent wisely by reflecting the value and purpose of a university, and that’s to educate its students. Instead, funds have been siphoned to constructing new buildings and Rutgers Athletics while money for libraries have been cut. Rutgers is a research university, and it’s shameful to have less money set aside for our academic programs because we apparently prioritize athletics more.
The Daily Targum's editorials represent the views of the majority of the 148th editorial board. Columns, cartoons and letters do not necessarily reflect the views of the Targum Publishing Company or its staff.