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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GOP Tax Cuts Getting Less Popular, Poll Finds
Friday marked the six-month anniversary of President Trump’s signing the Republican tax overhaul into law, and public opinion of the law is moving in the wrong direction for the GOP. A Monmouth University survey conducted earlier this month found that 34 percent of the public approves of the tax reform passed by Republicans late last year, while 41 percent disapprove. Approval has fallen by 6 points since late April and disapproval has slipped 3 points. The percentage of people who aren’t sure how they feel about the plan has risen from 16 percent in April to 24 percent this month.
Other findings from the poll of 806 U.S. adults:
- 19 percent approve of the job Congress is doing; 67 percent disapprove
- 40 percent say the country is heading in the right direction, up from 33 percent in April
- Democrats hold a 7-point edge in a generic House ballot
Special Tax Break Zones Defined for All 50 States
The U.S. Treasury has approved the final group of opportunity zones, which offer tax incentives for investments made in low-income areas. The zones were created by the tax law signed in December.
Bill Lucia of Route Fifty has some details: “Treasury says that nearly 35 million people live in the designated zones and that census tracts in the zones have an average poverty rate of about 32 percent based on figures from 2011 to 2015, compared to a rate of 17 percent for the average U.S. census tract.”
Click here to explore the dynamic map of the zones on the U.S. Treasury website.
Map of the Day: Affordable Care Act Premiums Since 2014
Axios breaks down how monthly premiums on benchmark Affordable Care Act policies have risen state by state since 2014. The average increase: $481.
Obamacare Repeal Would Lead to 17.1 Million More Uninsured in 2019: Study
A new analysis by the Urban Institute finds that if the Affordable Care Act were eliminated entirely, the number of uninsured would rise by 17.1 million — or 50 percent — in 2019. The study also found that federal spending would be reduced by almost $147 billion next year if the ACA were fully repealed.
Your Tax Dollars at Work
Mick Mulvaney has been running the Consumer Financial Protection Bureau since last November, and by all accounts the South Carolina conservative is none too happy with the agency charged with protecting citizens from fraud in the financial industry. The Hill recently wrote up “five ways Mulvaney is cracking down on his own agency,” and they include dropping cases against payday lenders, dismissing three advisory boards and an effort to rebrand the operation as the Bureau of Consumer Financial Protection — a move critics say is intended to deemphasize the consumer part of the agency’s mission.
Mulvaney recently scored a small victory on the last point, changing the sign in the agency’s building to the new initials. “The Consumer Financial Protection Bureau does not exist,” Mulvaney told Congress in April, and now he’s proven the point, at least when it comes to the sign in his lobby (h/t to Vox and thanks to Alan Zibel of Public Citizen for the photo, via Twitter).
