Report: Wealthiest Colleges Receive Billions in Federal Aid

Published July 10, 2019

Public and private colleges with large endowments receive billions of dollars in U.S. Department of Education (DOE) funding each year, says Open the Books, a nonprofit organization promoting government transparency.

“The 25 colleges and universities with the largest endowments in the country reaped $6.9 billion in Department of Education (ED) funding despite holding a quarter-trillion in existing assets, collectively,” writes Adam Andrzejewski in “Open the Books Oversight Report: The U.S. Department of Education,” released on April 3.

Among the institutions with the largest endowments, eight of the 10 largest recipients of DOE funding are public universities.

“This money was distributed as grants, contracts, and direct payments (FY2017) as well as student loans (FY2017-FY2018),” the report states.

High Endowments, Higher Tuition

These institutions do not use their endowments to reduce the cost of tuition, economist Stephen Moore and Andrzejewski noted in the Washington Times on March 31.

“The higher the endowment, the higher the tuition,” write Moore and Andrzejewski.

Outstanding student loan debt reached $1.49 trillion in the first quarter of 2019, according to the Federal Reserve Bank of New York. Federal funding should be conditioned on these schools using their endowments and other means to lower tuition costs, say Moore and Andrzejewski.

“The way to cut tuitions, starting with the most expensive colleges, is to require these schools to lower their tuitions each year by 5 percent to 10 percent and make up the difference by either cutting costs (that’s easy) or using their endowments to subsidize the out-of-pocket costs paid by students and/or taxpayers,” Moore and Andrzejewski write.

Students Get ‘Tuition Reductions’

These wealthy institutions give students income-based discounts from their high fees, says George Leef, director of research at the James G. Martin Center for Academic Renewal.

“True, many elite schools have huge endowments and charge high tuitions,” Leef said. “They also, however, usually give substantial tuition reductions for students from families with modest means.”

Students would pile up less debt and obtain better outcomes if they chose to attend other schools that charge less, says Leef.

“There are lower-cost alternatives to these ultra-expensive institutions,” said Leef. “While they aren’t as prestigious, they offer an education that is as good if not better.”

Opposes More ‘Federal Meddling’

Further federal government intervention should be avoided, says Leef.

“I do not favor further federal meddling with higher education at all,” Leef said. “I don’t want to see federal officials telling college leaders how they must spend their resources.

“How elite private universities—or any other private educational institution—use their money is not properly any business of the federal government, and how top state universities use their money is a matter for the states to decide,” said Leef. “We shouldn’t invite further federal intervention.”

Sarah Quinlan ([email protected]) writes from New York City, New York.

Internet Info

Adam Andrzejewski, “Open the Books Oversight Report: The U.S. Department of Education,”, April 3, 2019: