Fund Managers Making Millions from University Endowments
The soaring endowments at America’s top universities are doing more to line the pockets of the millionaire private equity fund managers who run them than they are for the schools’ students, argues a New York Times op-ed published today.
At Yale University last year, for example, fund managers received $480 million in compensation for managing a third of Yale’s $24 billion endowment. Meanwhile, the school spent just $170 million of that endowment on tuition assistance, fellowships and prizes, according to an analysis by Victor Fleischer, a law professor at the University of San Diego.
He found a similar at Harvard, the University of Texas, Stanford and Princeton. “We’ve lost sight of the idea that students, not fund managers, should be the primary beneficiaries of a university’s endowment,” Fleischer writes. “The private-equity folks get cash; students take out loans.”
Related: Harvard’s In-House Fund Managers Get 70 Percent Pay Hike
It’s worth noting that all the schools Fleischer cites do have relatively generous tuition assistance programs, and they often spend their endowments on capital improvements and other projects that indirectly benefit students. Their endowments have also enjoyed record returns under private equity management.
Fleischer argues that college endowments should be required to spend a percentage of their assets each year, much like other private endowments. That would lead to lower overall endowments but might put a damper on tuition increases and would lead to improved research facilities, he claims.
Last year American universities invested about 11 percent of their portfolios in private equity and saw a 16.5 percent return on them, according to the National Association for College and University Business Officers.
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U.S. fertility rates have fallen to record lows for two straight years. “Because the fertility rate subtly shapes many major issues of the day — including immigration, education, housing, the labor supply, the social safety net and support for working families — there’s a lot of concern about why today’s young adults aren’t having as many children,” Claire Cain Miller explains at The New York Times’ Upshot. “So we asked them.”
Here are some results of the Times’ survey, conducted with Morning Consult. Read the full Times story for more details.
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Gallup says that, for the first time in the 18 years it’s been asking U.S. adults how proud they are to be Americans, fewer than half say they are "extremely proud." Just 47 percent now say they’re extremely proud, down from 70 percent in 2003.
Another 25 percent say they’re “very proud” — but the combined 72 percent who say they’re extremely or very proud is also the lowest Gallup has recorded. Pride levels among liberals and Democrats have plunged since 2017. Overall, 74 percent of Republicans and just 32 percent of Democrats call themselves “extremely proud” to be American.
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“The increases were effective as of July 1 and in most cases were more than 9 per cent — well above the rate of inflation in the US, which is running at about 2 per cent. … Pfizer, the largest standalone drugmaker in the US, did decrease the prices of five products by between 16 per cent and 44 per cent, according to the figures.”
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Since the Republicans took the House in 2011, nearly every annual budget blueprint has promised to balance the budget within a decade with anywhere from $5 trillion to $8 trillion in spending cuts. And yet, you may have noticed, the budget has not moved towards balance. This is because the budget merely sets a broad fiscal goal. To actually cut spending, Congress must follow up with specific legislation to reform Medicare, Medicaid, and all the other targeted programs. In reality, most lawmakers who pass these budgets have no intention whatsoever of cutting this spending. As soon as the budget is passed, the targets are forgotten. The spending-cut legislation is never even drafted, much less voted on.
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Read the full piece at National Review.