Shots in the Dark
Saturday, 26 January
Feeling the Heat from Capitol Hill
by It becomes more and more apparent that Harvard's recent move to expand financial aid was primarily motivated by a desire to fend off political pressure from Washington.
Unfortunately, that strategem doesn't seem to be working. Yesterday the Times reported that the Senate Finance Committee has signaled that it will continue its push to compel "well-endowed" colleges such as Harvard and Yale to spend a greater percentage of their endowment annually.
The Senate Finance Committee, increasingly concerned about the rising cost of higher education, demanded detailed information on Thursday from the nation’s 136 wealthiest colleges and universities on how they raised tuition over the last decade, gave out financial aid and managed and spent their endowments.
... “Tuition has gone up, college presidents’ salaries have gone up, and endowments continue to go up and up,” said Senator Charles E. Grassley of Iowa, the ranking Republican on the committee. “We need to start seeing tuition relief for families go up just as fast.”
A fascinating abandonment of the free market by Grassley...but then, since universities such as Harvard enjoy non-profit status even while they rush to monetarize everything they discover in their non-profit science labs, there is some legitimate government jurisdiction here.
This is a big test for Drew Faust...and truth be told, Larry Summers might have been better-equipped, given his Washington experience and economic know-how, to repel such Washington pressure.
It will be fascinating to see how Drew Faust responds....
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