A tiny number of superstar colleges are getting the lion’s share of endowment contributions—making them immune to the disruptions reshaping the higher education sector—while middle- and lower-tier colleges are getting squeezed tighter and tighter. From Inside Higher Education:
College endowments may have grown last year by the smallest amount since 2012, as reported elsewhere on this site today, but institutions got some good financial news in the 2015 fiscal year: charitable contributions to colleges and universities rose to a record level, $40.3 billion, the Council for Aid to Education reports in its annual Voluntary Support of Education survey.
Even so, a small and exclusive coterie of institutions is disproportionately benefiting from donors’ largesse. The top 17 colleges and universities — less than 1 percent of the total universe of about 3,900 institutions — accounted for more than a quarter of the contributions, $10.42 billion. And 60 colleges and universities, under 2 percent of all institutions, received $20.15 billion, half of the total.
This is partly a downstream consequence of income inequality: As alumni of the top colleges see faster and faster wage growth, their (tax deductible) donations to their alma maters will also increase. But it’s also a cause of income inequality, for it means that the educational, extracurricular, and economic resources available to Stanford and Harvard students will continue to expand, while the resources available to students at West Texas University or Cal State Chico stagnate. Yes, some of the endowment money at elite schools goes toward financial aid for disadvantaged students, but “the proportion of raised funds that are committed for financial aid has held relatively steady for the last two decades,” according to IHE.
Despite all the progressive rhetoric about equality that emanates from the Ivy League, elite education is one of the key vehicles by which America’s upper class sustains itself. People who are really interested in leveling the educational playing field need to think of more creative solutions than simply constructing more social justice centers on elite campuses. For instance, they could explore the possibility of creating a system of national exams so that students from lesser-ranked colleges have a better chance of competing for jobs, or, as Glenn Reynolds has suggested, the idea of capping the tax deduction for endowment contributions.