Ivy league endowments under fire: liberals and conservatives agree that it's time for ultra-wealthy colleges to start sharing their wealth.

• Author: Kim, Anne

In 2015, a New York Times op-ed acidly observed that Yale University had spent $480 million that year on fees for hedge fund managers to grow the university's already massive endowment--while spending just $170 million on tuition assistance and fellowships for its students.

"We've lost sight of the idea that students, not fund managers, should be the primary beneficiaries of a university's endowment," wrote law professor Victor Fleischer, whose 2006 proposal to change the tax treatment of "carried interest" became a liberal cause celebre. "The private-equity folks get cash; students take out loans."

Though Fleischer's screed was not the first to attack elite college endowments--progressive commentator and former Clinton administration Secretary of Labor Robert Reich has also railed against them--it presaged a wave of criticism that has since become a storm. Shortly after Fleischer's op-ed was published, New Yorker writer Malcolm Gladwell grabbed the baton, launching what's become an ongoing, high-profile crusade against fat-cat university fund-raising. In 2016, he dedicated an entire podcast to the absurdity of billionaires donating millions in endowment dollars to schools that don't need the money, and later waged a very public war against Stanford University for its fund-raising appeals to alumni. "If Stanford, with $22 billion in the bank, still has needy undergraduates, how are they spending the billions they ALREADY have?" he tweeted in February.

It's not just liberals like Gladwell who are outraged. The GOP-led Congress has held at least two separate hearings examining the taxpayer subsidies that support endowments, which are now potentially under scrutiny as part of tax reform (assuming Congress gets there). Even Donald Trump has weighed in. "Many universities spend more on private equity fund managers than on tuition programs," said then presidential candidate Trump last September, channeling Fleischer's critique (albeit a little iffy on the details).

Observers of higher education have long known, of course, about the grotesque piles of cash the nation's elite schools have been accumulating, as well as the glaring inequality between these schools and their poorer kin. According to a 2016 analysis by the Education Trust, 75 percent of the nation's total college endowment wealth is held by less than 4 percent of phenomenally wealthy schools.

In addition to Yale, whose endowment was a whopping $25.4 billion in 2016, the holders of these outsized endowments include Harvard ($34.5 billion), Stanford ($22.4 billion), Princeton ($22.2 billion), and MIT ($13.2 billion), as well as top-tier state schools such as the University of Michigan ($9.7 billion) and the University of Virginia ($5.9 billion). In 2016, the fifty wealthiest universities in the country owned $331 billion in endowment wealth--a figure equal to roughly triple the size of California's state budget last year and ten times that of Pennsylvania.

The nation's elite schools have long been politically sacrosanct--as have their tax-exempt endowments--but that may no longer be the case. The 2016 election gave vent to the anti-elite, anti-establishment populism that had been building on both the left and the right. It's no shock, then, that the elite higher education establishment would become the inevitable target of these twin resentments--as the hoarders of privilege on the left and as purveyors of liberal indoctrination on the right. What's happening now is a convergence of both liberal and conservative concerns about the size of university endowments, the extreme and growing inequality between rich schools and the rest, and the way in which the wealthiest universities...