Thursday, September 20, 2018
Harvard, undergraduate population of approximately 6,800, just completed a five-year capital campaign that generated $9.6 billion.
Brookdale, undergraduate population of approximately 11,800, has an annual operating budget of about $84 million.
Readers, it’s time for some math. For the sake of argument, let’s pretend not to notice that capital and operating budgets are not the same thing. I’ll use relatively round numbers.
One percent of 9.6 billion is 96 million. Ten-year Treasury bills are running at about 3 percent right now. (Score one for Marketplace!) So if that money were invested in ten-year treasuries -- a thought that would make any self-respecting fund manager shudder at such risk aversion - it would return about $288 million per year. I’d say that’s before taxes, but, of course, Harvard is tax exempt. The $288 million is real. (They’d almost definitely go higher-risk, higher-reward, but I’m trying to keep it simple.)
Brookdale could increase its operating budget by more than half, and still consume only about half of the annual interest thrown off by the principal. And it could go entirely tuition-free and fee-free. It could hire full-time faculty and staff, pay for professional development, support shuttles to the various campuses, and do it all without charging students. Hell, it could even stop taking subsidies from the state and county. Enrollment would likely increase, but that would be fine; we’d have the employees to handle it.
Again, this is just from the interest. There would be enough interest left over to cover one or two of our sister colleges, too. Indefinitely. Assuming enrollment increases here and at a sister college, we’re looking at making college free for about 25,000 students per year, plus improving the work lives of hundreds of employees. The community payoff would be dramatic, lasting, and compounding.
American political culture holds that 9.6 billion for Harvard is “philanthropy,” but free community college is “socialism.” There’s something fundamentally wrong with that.
Instead, we hope against hope to get the first real increase in operating funding since the 1990’s, while Harvard has to figure out what to do with the latest billions.
As a former political scientist, I’ve been fascinated to see the concept of socialism catching on among younger voters. I’m old enough to remember when the word was an epithet. Very Smart People have pronounced themselves perplexed at its emergence.
Ask a community college student who sleeps in her car between part-time jobs what she thinks about Harvard’s tax-free $9.6 billion windfall, and whether she could come up with any better uses for it.
If we don’t want folks to go off the deep end politically, we need to stop pushing.
Congratulations to Harvard for playing the game exceptionally well. Now it’s time to change the game.