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OPINION

Why Are Top Universities Getting Federal Money?

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
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AP Photo/Lynne Sladky, File

Columbia University at first appeared to have surrendered to President Trump's demands that the New York school stop coddling antisemitic and anti-Israel demonstrators. The school announced it was buckling, not on principle, but because it wants the $400 million in federal grants and contracts restored. Trump had frozen the money to get them to act against protesters. Now the protesters are protesting what Columbia's interim president, Katrina Armstrong, did to have the grant restored.

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The New York Post reports: "The school's interim president, Katrina Armstrong, privately told faculty that Columbia has not, in fact, banned masks -- even after it promised the White House ... that it would ban them." Yet Armstrong turned around Tuesday to insist Columbia's promises to ban masks and make other changes are "real."

As of Tuesday, face coverings were still on many protesters.

There is a larger question emanating from the ongoing demonstrations on several college campuses since the Hamas attack on Israel and their seizing of hostages on Oct. 7, 2023. Why are so many of these elite schools, some of them with huge endowments and high tuition, receiving taxpayer money?

Among the top 20 universities receiving federal largesse are Harvard, Yale, Stanford, Princeton, MIT and Dartmouth College. Their endowments range from more than $50 billion (Harvard) to nearly $8 billion (Dartmouth). Added together, the total for the top 20 is close to $2 trillion.

In a new book, "Let Colleges Fail: The Power of Creative Destruction in Higher Education," Richard K. Vedder of the Independent Institute writes: "Why are universities given special status not given to other providers of useful services such as used-car dealers or fast-food restaurants? Why have well-intentioned federal programs such as government-guaranteed student loans had an impact dramatically different than was intended when the legislation was passed?"

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Good questions.

Vedder notes that enrollments at universities and colleges have been consistently falling since 2011, including fewer men attending for various reasons. Others believe the high cost does not guarantee jobs after graduating that will pay them enough to live on, much less pay back their student loans in a timely fashion. Then there's the "woke" agenda at too many of these schools, along with courses that add little or nothing to one's resume when graduates seek employment in the real world.

What about research conducted by many of these schools? Is the research tailored to outcomes the government wants because researchers want the money, or is it truly independent research that produces beneficial results and is not open-ended?

Government subsidies and bailouts, Vedder argues, are the leading cause for all the problems at today's universities. His solution? "Americans should get rid of these third-party safety nets and allow the Schumpeterian phenomenon of 'creative destruction' to force colleges to fail or succeed."

Joseph Schumpeter (1883-1950) was an Austrian political economist. He believed in innovations in the manufacturing process that increase productivity, describing it as the "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one."

Why should wealthy American universities that are not providing the useful kinds of education they once did continue to receive the equivalent of life support from the federal government? Haven't we seen how government involvement consistently drives up tuition and other costs, making a college education unaffordable for an increasing number of lower- income Americans? That some schools reduce or even waive tuition for certain categories of students (usually based on race or other external factors) adds to a feeling of inequity for certain demographic groups who face discrimination from many of these institutions.

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There is money to be saved and possibly a real education to be revived should the DOGE people look at these subsidies and grants and the unfairness of providing money to these schools, money that isn't available to any business, which must succeed or fail based on whether they produce goods and services the public wants to buy.

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