2: Are Taxpayers and Legislators Getting Their Money’s Worth from College Subsidies?
American colleges routinely receive vast wealth transfers. Congress, state legislatures, and even county and municipal councils tax billions away from hard-working Americans—including those who never had an opportunity to attend college—and turn it over to colleges and universities. Many schools receiving these subsidies already control massive tax-exempt endowments.
| HEAVILY SUBSIDIZED, POORLY PERFORMING COLLEGES | ||||
| These colleges ranked among the bottom 10 for civic knowledge gained by students, but their students received an above-average total sum in government grants to freshmen (the average was $6,453 across the 50 schools in the survey). | ||||
| College | Average Total Government Grants to Freshmen | Endowment in Billions | Rank by Value Added | Value Added |
| Yale University | $11,102 | $18.03 | 49 | -3.09% |
| University of Pennsylvania | $9,666 | $5.30 | 41 | +0.83% |
| Duke University | $8,785 | $4.50 | 48 | -2.25% |
| Rutgers University | $8,231 | $0.55 | 45 | -0.94% |
| Princeton University | $8,215 | $13.00 | 46 | -1.70% |
| Cornell University | $7,524 | $4.30 | 50 | -4.95% |
| St. John’s University | $7,386 | $0.30 | 47 | -1.87% |
In the 2000-2001 school year, according to NCES (National Center for Education Statistics), public four-year colleges received $48.9 billion from state governments, $18 billion from the federal government, and $915 million from local governments. Private four-year colleges received $13.3 billion from the federal government, $1.2 billion from state governments, and $503 million from local governments.
A portion of these government grants is direct expenditures by governments for various higher educational services. Another portion of these grants is awarded to students for the purpose of defraying the tuition charged at their chosen institution. To mention a few, these include Title IV Pell Grants, the Federal Supplemental Educational Opportunity Grants (FSEOG), and state contributions to the State Student Incentives Grants (SSIG).
One thing Americans ought to be able to expect from colleges in return for this investment is that colleges will graduate students who make America a better nation for all of us by becoming better citizens. Taxpayers and lawmakers are justified in asking: Are we getting our money’s worth from colleges that fail to teach their students America’s heritage?
Surveyed colleges that enjoyed larger subsidies in the form of government-funded grants to students tended to increase civic knowledge less than schools that received smaller such subsidies. Consider:
- Yale increased its endowment by $2,805,700,000 in fiscal 2006. By the end of that year, it had $18,030,600,000 locked away in its tax-exempt treasure chest. Yet, The College Board reports that the average Yale freshman received $11,102 in government grants to help defray the costs of attending Yale. Yale seniors, meanwhile, scored 3.09 points lower than Yale freshmen on the civic literacy exam. Yale enriched itself but failed to enrich its students’ understanding of America.
- Princeton increased its endowment by $1,838,400,000 (to $13,044,900,000) in 2006, while taxpayers provided the average Princeton freshman with $8,215 in grants. Princeton seniors scored 1.69 points lower than Princeton freshmen on the civic literacy exam.
- Duke increased its endowment by a tax-free $671,565,000 in 2006, while taxpayers provided the average Duke freshman with $8,785 in grants. Duke seniors scored 2.25 points lower than Duke freshmen on the civic literacy exam.
By the same measure, some schools are comparatively good stewards of their subsidies. Eastern Connecticut State University (ECSU) has a paltry endowment of $60,000, a miniscule fraction of nearby Yale’s $18,030,600,000. Yet, the average ECSU student receives only $3,721 in government grants, about one third what the average Yale student receives. Nonetheless, ECSU increased the civic knowledge of its students an average 12.74 points more than Yale.
| LESS SUBSIDIZED, BETTER PERFORMING COLLEGES | ||||
| These colleges ranked among the top ten for civic knowledge gained by students, and their students received a below-average total sum in government grants to freshmen (the average was $6,453 across the 50 schools in the survey). | ||||
| College | Average Total Government Grants to Freshmen | Endowment in Billions | Rank by Value Added | Value Added |
| East Connecticut State University | $3,721 | $0.0001 | 1 | +9.65% |
| Iowa State University | $3,946 | $0.102 | 9 | +7.66% |
| Mississippi State University | $4,225 | $0.211 | 6 | +8.36% |
| Concordia University | $4,250 | $0.021 | 4 | +8.99% |
| St. Cloud State University | $4,264 | $0.01 | 5 | +8.59% |
| University of Mississippi | $4,316 | $0.42 | 10 | +7.45% |
| Murray State University | $4,820 | $0.014 | 3 | +9.12% |
| Pfeiffer University | $4,887 | $0.013 | 7 | +8.25% |