Todd Buchholz makes a case for letting universities hoard their endowments, against a potential plan in Congress that would force them to spend more:
Here’s my reform plan: First, senators should mind their own business. What credibility do they have on long-term savings? Last I looked, Social Security is not in a lockbox but in the outhouse. Second, colleges should speed up the trend of turning loans into grants. A French or art history major buried under a $200,000 debt might as well be reading Sartre’s “No Exit” and admiring Munch’s “Scream.” Bono and U.S. Treasury secretaries made a similar argument on behalf of Africa–and Ghana probably has a better football team than Columbia. Third, universities should use their bulging endowments to create room for more undergraduates. Princeton has adopted a multiyear plan to expand its class by 11% but will still turn away baskets of applications from students with perfect SAT scores.