Mass. Private Colleges Push Back Against GOP Endowment Tax Plan

Nov 9, 2017
Originally published on November 9, 2017 10:53 am

“Privilege” remains a buzzword on today’s campuses.

But for Julia Vann, studying one recent evening in the Amherst College library, it isn’t something theoretical.

The guilt, she says, started as soon as she arrived at school.

“Knowing that I had as much food as I wanted, and I could turn up the heat as high as I wanted — just like, little things that really shocked me about my day-to-day life.“

Vann came to Amherst from rural Ouray, Colorado. Her family income was low enough that the college gave her a full scholarship. All she has to cover, she says, are flights to and from school and her books.

Vann says getting used to a campus so divided on class lines has been an education in itself.

“I grew up just hating anybody who had more money than me,” Vann says. “As I think most low-income kids do, like, you know, you’re jealous when someone has a Lunchables and your mom packed you, like, some crummy PB&J.”

As Vann studied, she was surrounded by wall-sized images of then-president John F. Kennedy’s 1963 visit to the school.

The address he gave turned out to be his last in Massachusetts — and it parallels some of Vann’s views today.

With Amherst’s privilege, Kennedy said, comes responsibility: “What good is a private college or university, unless it’s serving a great national purpose?”

A Kennedyesque quid pro quo: Amherst could keep its private wealth, so long as its graduates went on to share their advantages with the country at large.

</a> <p>If Amherst College was privileged 50 years ago, today it’s only more so — its endowment tops $2 billion. That’s more than a million dollars for each of its 1,800 students. <p>And there are some who feel that schools like Amherst haven’t held up their end of the bargain. <p>As part of their tax bill, House Republicans have issued a proposal to <a href=" https:="" target="_blank" rel="noopener noreferrer">tax the endowments of about 60 of the wealthiest private colleges and universities in the United States. The tax would impact schools with endowments of $250,000 or more per full-time student. About 13 percent of those schools are in Massachusetts.

“These huge multibillion-dollar endowments are tax-free, but too many don’t use the endowments to help with the tuition and student debt,” said President Trump, back when he on the stump, vowing to force private schools to lower tuition or forfeit some of their wealth.

It’s not a new idea, and it doesn’t always come from the political right. Massachusetts Democrats proposed an even larger endowment tax 10 years ago, but it was defeated on Beacon Hill.

The tax seems like common sense to Mark Schneider. He’s an expert on higher education who works at the American Institutes for Research.

“Thirty-seven billion dollars is a lot of money,” Schneider said. “Nobody needs that much money.”

That figure is the size of Harvard’s endowment, the largest of any private university.

Two years ago, Schneider calculated that each student at Harvard got almost $50,000 of subsidies from taxpayers. Meanwhile, a University of Massachusetts Amherst student got less than $10,000. And most students go to public schools that don’t have such deep pockets.

“Fifty some-odd percent of American students go to community colleges. Seventy-five percent in bachelor programs go to the regional campuses,” he said. “These schools are under-resourced and have the students with the greatest needs.”

Many private colleges and universities say the proposed tax will hurt their chances of being affordable. Drew Faust, Harvard’s president, said this week that its endowment isn’t “locked away in some chest; it’s out in the world.”

Schneider actually doesn’t like the House plan, because it uses the revenue to offset other tax breaks instead of bolstering public education.

Amherst College President Biddy Martin agrees.

“It’s not connected to any effort to ensure that institutions do more to create access and opportunity for lower- and middle-income students,” she said.

Martin said the tax would hit especially hard at Amherst, which relies more and more on endowment income to allow students like Vann to attend for free or cheap.

Over the past 10 years, the total cost of an Amherst education has risen by about 22 percent. But over the same period, financial aid is up more than 70 percent.

“We’re all very proud of that fact,” Martin said. “It does mean that anything that lowers our revenue base also puts at risk the extent to which we can go in offering opportunity.”

Amherst was founded in 1821 as a school for “indigent young men of piety and talents.” Martin says after years of accumulating wealth and prestige, it’s trying — slowly — to get back to that mission.

Vann said the school isn’t perfectly comfortable for low-income students. There isn’t always much community or support. Sometimes students like her have to rely on each other.

But the school’s focus on keeping prices down for students like her has changed her mind a bit about that big privilege question.

“I think one thing Amherst really taught me is that it’s not the privilege you’re born with, it’s what you do with it,” she said.

Now, with others, Amherst College will lobby Congress to persuade them that it’s doing the best it can with the privilege it has.

Copyright 2017 WBUR. To see more, visit WBUR.