George Leef wrote recently about this New York Times op-ed. The author, professor of law Victor Fleischer, proposes that we “should require universities with endowments in excess of $100 million to spend at least 8 percent of the endowment each year.” I am not qualified to judge whether Fleischer’s proposal is wise, though his argument, largely based on average endowment returns “in recent years,” seems short-sighted to me. But I think I am qualified to judge Fleischer’s focus on Yale. It’s silly.
Fleischer’s complaint is that Yale ought to be spending more money to benefit its students, rather than paying so much to fund managers. But Yale is already, from the standpoint of per-student spending, a bargain. Let’s take into account what Yale spends per student on instructional expenses and student services alone. In 2013, according to Integrated Postsecondary Education Data System data, that number was about $128000. The average net price—what a student pays after grants and scholarships—for attending Yale was $16,528 in 2012-13.
It’s fair to question whether the $128,000 Yale is spending per student on instructional costs and student services is well spent. It’s also fair to question whether super-wealthy institutions like Yale should have the tax breaks it enjoys. And finally, it’s fair to question whether or not universities should be required to spend a percentage of their endowments each year. What’s silly is the suggestion that students who are receiving for $16,528 a better than $128,000 product are being screwed over in favor of fund managers. There has to be a better object of higher education populism than this.