How to Reform Higher Education

RR Reno:

Congress is deadlocked over a $1 trillion coronavirus relief bill. As our representatives hash out their differences, I’d like to propose they carefully consider how to distribute relief funds for higher education. (I draw some of these ideas from “Critical Care: Policy Recommendations to Restore American Higher Education After the 2020 Coronavirus Shutdown,” a position paper from the National Association of Scholars.)

Most important: Avoid shoveling money into the super-rich colleges and universities. The 2017 tax bill established a tax on income earned by gigantic university endowments. Institutions enrolling 500 or more students that have $500,000 or more in endowment principal per student are subject to a 1.4 percent tax on their endowment income. Congress should use the same metric of endowment wealth to determine which colleges and university receive relief funds. None that have endowments above $500,000 per student should receive federal money.

In recent decades, higher education has been bloated with money from federally guaranteed student loans. At the same time, a generation of young people has been saddled with debt. It’s past time for institutions to put some skin in the game. Colleges and universities that accept relief funds must be held liable for a significant percent of the principal of student loan defaults.

Legislators should avoid the temptation to “save the system.” It’s a broken system, one built on an unrealistic and harmful “college for all” approach. This mentality has led us to over-invest in higher education and shortchange vocational education. To make things worse, over the last generation the American taxpayer has increasingly subsidized the graduate training of foreign students, not American students. The relief bill should reverse this trend, giving priority to community colleges that serve American citizens rather than universities that position themselves as global institutions.

Elite scientists at American universities receive generous pay—and hundreds of thousands of dollars from the Chinese Thousand Talents program. This double game has to stop. Our universities enjoy extraordinary tax advantages and receive federal support through many mechanisms. The American taxpayer should not be asked to subsidize the transfer of intellectual and technological leadership to China. No college or university that employs a professor who has received money from the Thousand Talents or similar programs should receive relief funds.