Kerby Anderson

For the next two days, I want to talk about some of the problems with universities in America. Much of what I will be talking about today comes from “Harvard is Big Business at Its Worst” by Allysia Finley. She focuses on Harvard because of the testimony last month by Harvard President Claudine Gay, but her comments apply to most of the major universities.

The first issue is the fact that the IRS recognizes most private colleges as nonprofits, meaning they don’t pay taxes. This saves Ivy League schools like Harvard millions of dollars, which is why they have massive endowments. Couple that with the fact that Columbia is New York City’s largest private landowner, with more than 320 properties, valued at nearly $4 billion.

Second, these schools may have nonprofit status, but they operate like business corporations. For example, they charge exorbitant prices for their product with inelastic demand. Moreover, they “practice price discrimination by awarding financial aid to lower-income kids so the schools can market themselves as diverse and accessible.”

Third, these schools exploit low-cost labor by employing graduate students to teach classes for higher-paid faculty. As a graduate student at Yale, I taught undergraduate students just a few years younger than myself and wondered if they and their parents thought they were getting the best education money could buy.

Finally, Ivy League colleges differ from corporations in one way: “The schools don’t have shareholders who can force changes.” We are seeing the influence of big donors announcing they will withdraw their donations, but that is nothing like what you find in typical corporate management.

Perhaps you can now see why many universities are big business at its worst.