Universities should use endowments to pay off student loans

I had a friend who is a very, very good financial investor, who turned to me the other day and said, Why are we allowing the colleges to take even more money when they’re already rich? And I said, what do you mean? She said, Well, look at Harvard. It has over 40 billion — not million — $40 billion in endowment. And why should we be paying student loans for somebody who goes to a place that already has $40 billion?

And then went on the suggestion. If you were to actually tax the endowments of the richest colleges in America, they could, in fact, help pay off the student loan program, without the average everyday worker having to pay for it. Suddenly, you’d have the college graduates, paying for the college graduates. It would be a very different approach, and frankly, it’s one I’ve thought about a lot. 

Why should a place like Yale, or Stanford, or Harvard even have a tuition? If you’ve got billions of dollars sitting there in endowment fund, why aren’t you giving free education? And for that matter, if you have the scale of money that Harvard does — and there are a number of other universities in this group who have billions of dollars — why isn’t that part of helping educate the country, rather than sitting there to be used by the faculty and the administrators, who then hire more faculty and more administrators, and particularly administrators. 

It’s breathtaking to look at some of these campuses and realize how many people they have now employed there. And you have to say to yourself, why should the average working American have to help subsidize somebody to go to a place like Harvard or Yale, or Stanford or Princeton? Shouldn’t in fact, the endowments of those schools be potentially a place to get the scholarship money for the students, including at the community colleges? 

There’s more than enough money in all the major endowments in the United States to do a great deal to help people learn, not just on their particular campus, but across the country. It’s an interesting idea — it’s at least worth talking about. And I think people would be shocked to learn just how much money some of these big universities have