In the wake of Obamacare and Common Core failures, the Obama Administration has been trying to change the media focus to “income inequality” in recent weeks.

Richard Vedder, economist and adjunct scholar at the American Enterprise Institute, has another inequality that is far more troubling and actually real: College endowment inequality.

…We’ve heard the argument that what these institutions do with their privately raised money is their business and that they provide a lot of financial aid opportunities for less affluent students. But these endowments are of dubious value and can be attacked on two grounds. First, they promote inefficiency through misallocation of resources. Second, they are anti-meritocratic.

…The eight Ivy League schools have less than 1 percent of U.S. college students but almost 17 percent of all endowment money. The top 3 percent of schools ranked by endowment size have more than half the funds. Five schools (Harvard, Yale, Princeton, Stanford University and one public institution, the University of Texas) had endowment increases last year of more than $1 billion, exceeding the total endowment of more than 90 percent of the schools (including virtually all the larger ones) publicly disclosing information.

Do rich schools use their wealth to promote upward economic mobility by disproportionately accepting low-income students? No — just the opposite. I took the 10 highest-endowed schools and looked at the percentage of students receiving Pell Grants, then compared that with the 10 lowest-endowed schools in a survey by the National Association of College and University Business Officers.

Most Pell Grant students come from below-average-income households. In the highly endowed schools, a median of 16 percent of students received Pells, compared with 59 percent at the lowest-endowed institutions.

A student graduating from Yale or Princeton, with their roughly $2 million endowments per student, has a ticket to a well-paying job, while one graduating from the College of St. Joseph in Vermont, with its $29,000 endowment per student, does not. Only 12 percent of the Yale and Princeton students have Pells, compared with 71 percent at St. Joseph.

…I am no liberal and I’m not preoccupied with the consequences of income inequality. But I can’t figure out why the liberal elite that purports to care about inequality isn’t asking these questions: Why do we provide favorable tax treatment that primarily benefits these wealthy schools? Why not at least phase out tax preferences to donors and to schools with more than, say, a $200,000 endowment per student? Why allow schools that show legacy admission preferences the right to claim special tax privileges?

Maybe many of these liberal leaders went to one of these highly endowed schools — and want their children and grandchildren to have the same opportunity.

Read the original article:
Cut Off Harvard to Save America (Bloomberg)