Does the Ivy League really need help from the government?

Megan McArdle:

It’s a nervous time to be a university. Forget the political activism that has been convulsing campuses over the past year; the Republican tax plan is now taking aim at the money that funds those campuses, particularly elite research universities. It proposes a tax on university endowments, an end to the tax deduction for student loans, and treating employer tuition reimbursement as income. This last would not only threaten a revenue stream for colleges and universities, but also make it much more expensive to run Ph.D. programs, where students normally get a tuition waiver as part of their package.

Universities are understandably concerned. And they’re not the only ones. Levying heavier taxes on education sounds perilously close to spitting on an American flag while denouncing motherhood, baseball and apple pie. So this might be a good time to ask whether we really ought to be subsidizing higher education — particularly elite higher education — as much as we are.

In theory, our nation’s elite educational system is supposed to be an engine of opportunity. And that was a very fine theory — in 1960, when America’s elite colleges transformed themselves into meritocratic institutions.

This remarkable moment in America’s past is underremarked upon; as far as I know, this peaceful and willing transfer of power is entirely without precedent in human history. In 1930, the Ivy League was basically a finishing school, a cocoon for the larval stage of a tweedy apex predator class. Suddenly, and for no apparent reason, the people running these schools (and the prep schools that fed them) decided to run admissions on a competitive basis of test scores and grades. 1 By 1970, the schools had diversified wildly, and the academics got better and better, while the football teams — formerly some of the most followed athletic programs in the country — declined precipitously.