Wealth and Want Part 1: Multi-Billion Dollar Endowments

US higher education reflects and reinforces a world of increasing inequality, injustice, and inhumanity. This system (or some would call it an industry) should function as a conduit between good K-12 education, good jobs, and the wellness of all its citizens, whether they attend or not. But increasingly, it does not. 

The first installments of the Wealth and Want series examine the concentration of wealth in the US higher education system.  And this article focuses on loosely regulated university endowments. While many American schools struggle to provide basic amenities and academic resources, elite universities boast endowments that rival the GDPs of small nations. And they pay little in taxes. 

The Endowment Elite and Ill-Gotten Gains

At the pinnacle of higher education wealth are Harvard ($49B), The University of Texas System ($44B), Yale ($40B), Stanford ($36B), and Princeton ($34B). These institutions have amassed endowments that provide a steady stream of income for investments, scholarships, and research initiatives. How their money is invested is rarely known.  

Endowment managers at elite schools typically make more than a million dollars a year. The most elite schools pay their managers $5M-$10M a year, with compensation largely based on returns. But those managers still get hefty salaries even when they lose money.

There are more than 120 schools with endowments greater than a billion dollars. But the 20 richest university endowments together hold more wealth than the other 5000 or so other higher education institutions combined. 

Elite endowments are often the result of centuries of fundraising, donations, and strategic (sometimes shady) investments. For many of the most prestigious schools, it began with land theft and generations of forced labor. 

For other wealthy schools, it was the result of philanthropic robber barons like Johns Hopkins (who also held captives), Andrew Carnegie, Leland Stanford, John D. Rockefeller, Cornelius Vanderbilt, and James Buchanan Duke who made their wealth through mass exploitation of people and the planet. 

For wealthy flagship state universities, it also came from land theft. In the case of the University of Texas, its wealth largely came from, and to some degree still comes from the exploitation of fossil fuels that jeopardize the planet.

Historical Context and Structural Inequality

• Land Theft and the Founding of Institutions: The establishment of many American universities, including Ivy League institutions and those founded under the Morrill Act, was often intertwined with land theft from Native American tribes. This practice, often referred to as "land dispossession" or "Indian removal," was a key component of Manifest Destiny and the expansion of European settlement across the continent.
• Ivy League Universities: Institutions like Harvard, Yale, and Columbia were granted land by colonial governments, which often acquired these lands through treaties that were coerced or violated. They also used enslaved labor to build and maintain their wealth.  
• Funding Models: The funding models for public higher education often favor larger, research-intensive universities. This can lead to underfunding for smaller, less prestigious institutions, particularly those serving marginalized communities.
• Endowment Inequality and Profits Over People and Planet: Endowments are a powerful tool for wealth accumulation and institutional advantage. The concentration of endowments in a few elite universities can exacerbate existing inequalities and create a self-perpetuating cycle of privilege.  These endowments have also engaged in shady investments that perpetuated worker oppression, genocide, and environmental destruction. 

Related links:

Pay and Chief Investment Officers: Good Money while It Lasts

Tax Wealthy Private Universities Now (Paul Prescod, Jacobin)

Universities Brace for Endowment Tax Hike, Rethink Investment Strategies

A sweeping new tax proposal from House Republicans threatens to upend how some of the wealthiest U.S. universities manage their endowments, marking what could be the biggest strategic shift in a generation.

As part of the broader Trump-backed tax bill that passed the House last week, the proposal would raise the excise tax on endowment investment income for private universities with large endowments from the current 1.4% to a staggering 21%—the same rate levied on corporations. The bill now moves to the Senate, where its fate remains uncertain.

If enacted, this change could significantly alter how universities invest their endowment funds—often worth billions of dollars. Institutions are now weighing a move away from short-term, high-return strategies in favor of more tax-deferred investment vehicles like private equity, which typically don’t generate taxable income until years down the line.

A Shift in Strategy

The Wall Street Journal reports that officials at eight private institutions have already begun considering how to adapt. “Tax efficiency,” once a secondary concern, is becoming a central lens through which investment decisions are being made.

Yet the path forward is complex. Many university endowments are already heavily invested in long-term vehicles. While these investments can offer deferral of taxable gains, they also require capital calls—obligations to fund previously committed capital—which, coupled with the new tax burden, could strain liquidity. As a result, universities may also need to increase their holdings in cash or liquid assets, a move that could reduce overall returns.

Who’s Affected

While the increased tax burden will fall heaviest on the richest institutions—such as Harvard, Yale, Princeton, and Stanford—it could also impact dozens of other private colleges with sizable endowments. The current law applies to private schools with at least 500 students and net assets of $500,000 per student. The new plan could expand the scope and deepen the financial impact.

Critics argue that the measure is politically motivated, targeting elite institutions that have become symbols of cultural and ideological opposition for many on the right. Supporters of the bill frame it as an issue of tax fairness: why should wealthy universities—with endowments rivaling small sovereign wealth funds—pay less than corporations?

Impact on Students and Operations

The increased tax liabilities may also have a downstream effect on students, faculty, and university operations. If institutions shift more resources toward taxes and compliance, there could be less money available for financial aid, faculty hiring, and academic programming.

Universities may also respond by reducing capital commitments to private markets, pausing infrastructure projects, or placing greater emphasis on tuition revenue and donor fundraising to offset the higher tax costs.

A Broader Political Shift

The proposed tax hike is part of a larger pattern of growing political scrutiny of higher education institutions, especially elite ones. From student debt relief to DEI initiatives and Title IX regulations, universities have found themselves at the center of ideological battles. Now, their finances are becoming a new front in that war.

If the Senate passes the tax bill, universities will be forced to act swiftly. Endowment managers, already grappling with volatile markets and inflation pressures, will have to balance competing demands: protecting returns, ensuring liquidity, and staying compliant with a rapidly changing tax landscape.

In the end, the move may do more than shift investment strategies—it could fundamentally redefine the financial models of American higher education.

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For more investigative reporting on U.S. higher education and the forces shaping its future, follow the Higher Education Inquirer.

The Higher Education Racket

 "Every great cause begins as a movement, becomes a business, and turns into a racket." Eric Hoffer

American higher education, once a ladder to opportunity, has become a vast machine of wealth extraction. Debt burdens students for decades. Professors and campus workers are trapped in precarious jobs. Entire communities are pushed out by campus expansions. And a select few elite universities sit atop fortunes that rival hedge funds—all while claiming tax-exempt status and public goodwill.

This is the higher education racket: a sector that has turned away from its public mission and now operates with the logic of capital accumulation, enabled by deregulation, political influence, and privatization.

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From Movement to Market: Postwar Expansion and Privatization

The 1944 G.I. Bill launched a golden age of public higher education, providing veterans access to tuition-free college and transforming American society. Enrollment surged, inequality shrank, and community colleges became lifelines for working-class students. Colleges were seen as civic institutions, essential to democratic life.

That vision began to erode in the 1980s, as neoliberal policymakers slashed state funding, forcing institutions to raise tuition, court corporate donors, and cut labor costs. By 2020, public universities received less than half the state funding (per student) they did in 1980, adjusted for inflation (Center on Budget and Policy Priorities).

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Trump Administration: Deregulating the Racket

Under Donald Trump, the Department of Education, led by billionaire Betsy DeVos, launched an all-out campaign to roll back protections for students and favor the worst actors in higher ed:

• Gutted Borrower Defense rules, making it harder for defrauded students to cancel loans.

• Eliminated the Gainful Employment rule, allowing for-profit colleges to peddle useless degrees.

• Weakened accreditors' oversight, enabling bad schools to access federal aid with little accountability.

• Backed anti-union efforts, including trying to strip grad students at private universities of their employee status.

This deregulatory spree enriched predatory schools, student loan servicers, and debt collectors—while stripping students and workers of protections.

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The Academic Underclass

While university presidents earn seven-figure salaries, and campuses build luxury dorms and biotech labs, the people doing the teaching are increasingly disposable. More than 70% of college faculty now work off the tenure track, many as adjuncts earning below minimum wage on a per-course basis (AAUP).

Campus workers—grad students, maintenance staff, food service employees—are organizing for better wages and benefits, but often face union-busting tactics. From Columbia to the University of California, administrators stall negotiations and outsource labor to avoid union contracts (The Guardian, 2022).

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Universities as Urban Developers

Historian Davarian Baldwin has documented how universities function as engines of gentrification in cities like New Haven, Chicago, and Philadelphia. In In the Shadow of the Ivory Tower, Baldwin argues that universities have become "shadow governments", gobbling up real estate, policing their neighborhoods, and reshaping urban economies—all without democratic accountability.

These “anchor institutions” claim to uplift communities, but their expansion often displaces low-income Black and brown residents, raises housing costs, and erodes the local tax base—since universities are typically exempt from property taxes.

“Higher education is not just about learning anymore. It’s about real estate, policing, health care, and urban planning—all under the control of tax-exempt institutions.” —Davarian Baldwin

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Endowment Empires

Nowhere is the inequality of U.S. higher education more glaring than in university endowments. Harvard, Yale, Stanford, and Princeton each have endowments exceeding $30 billion, managed like hedge funds with investments in private equity, real estate, and offshore accounts (NACUBO 2023 Endowment Study).

Despite their wealth:

• These universities often provide limited financial aid to working-class students.

• They pay no federal taxes on endowment income under $500,000 per student.

• They resist efforts to contribute to municipal budgets, even as they consume city resources.

During the COVID-19 pandemic, many elite institutions furloughed workers and froze wages—despite posting strong investment returns and sitting on endowments worth more than the GDP of some nations.

Critics argue that these funds should be tapped for student debt relief, housing support, or public education reinvestment—not hoarded like private wealth.

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The Price of the Racket

The numbers are staggering:

• $1.7 trillion in student debt

• Tens of thousands of adjuncts living in poverty

• Campus police forces more militarized than local law enforcement

• Communities displaced by campus-led gentrification

• Universities with endowments larger than some countries' national budgets

The higher education racket isn’t just an economic problem. It’s a betrayal of public trust.

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Reclaiming the Public Good

If higher education is to serve the people—not private interests—structural reforms are necessary:

• Cancel student debt and offer tuition-free public college

• Mandate living wages and fair contracts for all campus workers

• Tax large endowments and require community reinvestment

• Reinstate regulations to hold predatory institutions accountable

Higher education once expanded opportunity. It can again—but only if we dismantle the racket.

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Sources:

• Baldwin, Davarian L. In the Shadow of the Ivory Tower (Bold Type Books, 2021)

• AAUP – Contingent Faculty Data

• NACUBO – 2023 Endowment Study

• The Guardian – University Union-Busting

• NPR – DeVos Deregulation

• Center on Budget and Policy Priorities – State Funding Cuts

• College Board – Trends in Tuition

Harvard and Yale Selling Off Private Equity Stakes

Harvard and Yale—titans of American higher education and longtime bellwethers of endowment strategy—are quietly offloading billions in private equity holdings. These moves, confirmed through multiple reports and market insiders, signal a significant shift in institutional investing, with potential ripple effects across the higher ed landscape and beyond.

The two Ivies, boasting the largest university endowments in the world ($50.7 billion for Harvard, $40.7 billion for Yale as of 2024), have long championed the “Yale model” of endowment investing: high allocations to illiquid assets such as private equity, venture capital, hedge funds, and real assets like timberland and oil. But the bloom is off the rose.

From Darling to Dilemma

Private equity once promised high returns, portfolio diversification, and access to elite deals not available to public investors. In the wake of the 2008 financial crisis, as traditional markets stagnated, institutions doubled down on alternative investments. For years, this strategy paid off—at least on paper.

But cracks have been forming.

Private equity valuations have come under scrutiny as deal activity has slowed, interest rates have risen, and exits through IPOs and acquisitions have dried up. Many private equity funds are now sitting on aging portfolios—so-called "zombie funds"—that have not returned capital in years. Meanwhile, limited partners like universities are increasingly liquidity-constrained, especially as operating costs rise and tuition-dependent revenues remain fragile.

Harvard Management Company and Yale’s Investment Office, once aggressive buyers, are now sellers on the secondary market. Reports indicate both institutions are using intermediaries to quietly market stakes in private equity funds—often at discounts of 10% to 20%, or more, below net asset value.

A Broader Retreat?

This retreat isn’t just about balance sheet management. It’s a broader reassessment of what endowments should be doing—and what risks they should be bearing.

Universities face mounting scrutiny over their massive, tax-advantaged endowments and their relationships with Wall Street. Critics question why institutions with social missions are entangled in opaque, leveraged, and sometimes predatory industries. Private equity firms, after all, have been deeply involved in sectors like healthcare, housing, for-profit education, and prison services—areas where returns often come at the cost of public welfare.

Moreover, the mismatch between the long lock-up periods of private equity investments and the growing need for financial flexibility is becoming more apparent. University administrators now must navigate volatile geopolitical conditions, student protests over divestment, and uncertain federal funding. Liquidity matters more than it did a decade ago.

The End of the Yale Model?

David Swensen, Yale’s late investment chief, revolutionized university finance with his embrace of illiquid alternatives. But times have changed. While the strategy made Yale’s endowment a model for copycats, today it may represent an outdated orthodoxy.

Harvard and Yale’s pivot may be the beginning of the end for the “Yale model” as we know it. Other institutions—especially smaller endowments that tried to mimic the Ivies—may find themselves stuck with toxic assets, unable to unload them without taking steep losses.

In fact, some mid-tier and small colleges may have to choose between covering operational costs and holding on to underperforming private equity positions. For those with limited financial cushions, the fallout could be existential.

Higher Ed’s Reckoning with Risk

The endowment shift also raises a philosophical question: What is the purpose of university wealth?

As elite schools back away from the riskier corners of Wall Street, perhaps it's time for a broader reckoning—about not just how universities invest, but why. Should institutions built on ideals of knowledge, access, and social progress be hand-in-glove with industries known for wage suppression, regulatory arbitrage, and asset stripping?

Harvard and Yale may be late to that moral realization. But their financial pivot is a sign that even the most powerful players can’t ignore reality forever.

In the age of growing student debt, declining public trust, and ballooning inequality, selling off a few private equity funds is a small move. But it could be the start of a larger shift—one where higher education finally begins to question whether its financial strategies align with its educational mission.

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If you have insights into university endowment strategies or are a whistleblower inside the private equity world, contact us confidentially at Higher Education Inquirer. 

What happens to the American Dream during the College Meltdown?

American cultural outlets are slowly recognizing just how unequal society has become.  Traditional images of the American Dream and the values of meritocracy are being challenged by more critical discussions about a dangerously unequal society, including the increasingly corrupt and caste-like nature of  higher education.  The following quotes highlight this slow change in consciousness:

"...Public universities and colleges no longer offer the same degree of opportunity they provided to low and moderate income Americans as recently as a generation ago (Dr. Suzanne Mettler in "Degrees of Inequality").

"...Mergers are a hot topic for all kinds of schools, regardless of race and mission. They are presented by legislators as a way to save taxpayer money, strengthen research and educational opportunities, and to increase visibility in a hyper-competitive rush for student enrollment. But beneath the surface, it is part of a far more dangerous plan to divide the haves and have nots..." (Jarret L. Carter, HBCU Digest).

36% of colleges with endowments under $25 million are spending more than 5% per year from their endowment. It's unsustainable. (Dr. Robert Kelchen, Seton Hall University)

"If current trends continue over the next few decades, most state university systems would soon lose all funding from their states....In 2025 Colorado would become the first state to allocate zero funding to higher ed; Iowa would follow in 2029, then Michigan (2030), then Arizona (2032).  Most states wouldn't appropriate any university funding by 2050." (Alia Wong, The Atlantic)   

"You just have to walk through the Yale campus to see what money will buy you, which is a country club, right?...But we have to look at this in the big picture: There are tons and tons of other students at other colleges who are carrying enormous debt loads through their 20s and even into their 30s because school has gotten so expensive." (Malcolm Gladwell, NPR's Weekend Edition)

"...with the higher education industry growing faster than nearly any other industry in the world, we can probably expect its corruption and cronyism to grow just as fast." (Jesse Nickles, College Times)

There is also a growing body of literature critical of US higher education and specifically its institutional financing, service delivery (including the exploitation of adjuncts), student access, student outcomes, and accreditation.

The US college meltdown is deeper than most critics know.   How many people are examining Student Loan Asset-Backed Securities (SLABS) and higher education construction bonds?   

How many citizens really know how their local university and college endowments are getting consistent double digit returns?  Has your school received a valid stress test (NACUBO, 2015)?   

Powerful critics such as Bain Capital (Denneen & Dretler, 2012) and the New America Fund (Selingo, et al, 2013) argue that colleges are spending beyond their means, using outmoded teaching methods, becoming less accessible to students and their families, and refusing to be accountable for student graduation and default rates and “gainful employment” numbers.

Other sources have called the US higher education system's ancillary student loan businesses and accrediting agencies as either criminal or immoral.   For decades now, the student loan industry has been a racket: a scheme between corporations and government resulting in debt peonage for millions of working Americans.   

These harsh judgments are coming at at time of increasing government austerity towards higher education and college tuition costs that are out of reach for many students and their families.

While some may invite the US college crash as a form of “creative destruction” (Johnson, 2014, Economist, 2014), working families are discovering that higher education is an expensive if not risky proposition, sewing “seeds of discontent” among students as well as teachers (Frey, 2013, Chomsky, 2014, Mettler 2014, Lawler, 2015).

Knowing the perils that colleges, students, and families face, this briefing is a starting point to

• Identify whether your school is “at risk” (stress testing)
• Identify where changes can be made, and
• Discuss the importance of being personally and socially involved in making changes

Truthfully, most major "elite" schools are growing in power in wealth.  But this is education for the few.  My purpose here is to educate and agitate people about the college meltdown which is now underway at for-profit colleges, community colleges, Historically Black Colleges and Universities (HBCUs), tribal colleges, schools with endowments below $50 million, and academic programs, such as law schools, at public colleges and universities facing state budget issues.

"For decades, bad actors in this (for-profit) industry have engaged in awful abuses, and for five years we’ve seen steady revelations of such misdeeds, including blatant deceptions by for-profit colleges to students and government overseers." (David Halperin)

"After reviewing the data compiled by several researchers...community colleges are pretty much a mess.  They get far too few of their students on the road to good jobs or four-year college degrees.   Many of their classes are poorly taught.  many of their programs are poorly organized.  Even their best effort are poorly funded."  (Jay Matthews, Washington Post)

"The problem (with community colleges) isn't tuition.  It's guidance and teaching.  Students are turned off not by the cost of community college but the frustrating entrance standards and classes that do not take them in the directions they want to go.  They are given little assistance in navigating the confusing requirements." (Jay Matthews) 

According to Johnny C. Taylor, president & CEO of the Thurgood Marshall College Fund, 50 to 60 percent of HBCUs don’t have a long-term optimistic outlook and about 10 percent are in imminent trouble.

"HBCU dorms have fallen into serious disrepair. Classrooms are in need of updating, and academic programs have suffered. Some schools have had to reduce faculty and staff. To be blunt, it’s the result of years and years of financial neglect. Some of these schools are in need of a major infusion of cash." (Lynette Holloway in The Root).

"These (tribal) colleges not only have high costs per graduate, but also weak educational results. The reasons are complex, but they start with the fact that many reservations are places of despair with levels of alcoholism, drug use, suicide, out-of-wedlock childbearing, violence, and unemployment that would shock the average American. Despondency rules."  (Tom Burnett)

"Law schools face real business challenges. Demand has declined every year since 2010—not just a little but by nearly 40 percent. The same number of law schools have 33,000 fewer prospective customers than they had five years ago."

Those who are sufficiently concerned need to read more about this issue and must follow up with their own homework and social action.

Elite private schools and State Flagship Universities that possess multi-billion dollar endowments, perpetual tax breaks, and renewing government grants promise to get wealthier and more powerful, leaving hundreds of poorer schools in peril.

 Institutions at Risk (“Stress Test”)

If higher education administrators, accrediting agencies, and teachers union officials refuse to be transparent and accountable to students and former students, alumni, adjuncts, and communities, the US college meltdown promises to be more cataclysmic.

Denneen and Dretler (2012) identify at least 13 metrics to identify whether your school is in financial trouble. If your school is not an elite private or public university with a large endowment, you might be at risk if your school is experiencing:

1. Falling admissions
2. Median salaries of graduates are flat
3. Reductions in funding
4. Taking on more debt
5. Tuition increases
6. Reducing faculty head count
7. Cut backs on financial aid

Best and Best (2014) argue that public universities that rely on out-of-state and international students may also be taking on risk that is not readily apparent.

Where to Make Changes
Daneen and Dretler (2012) outline four major areas to make changes.

1. Developing a clear strategy focused on the core of the institution (places that clearly add value)
2. Reducing support and administrative costs (fragmentation, redundancy, unneeded hierarchy, need to outsource some functions—caution reducing instruction costs)
3. Freeing up capital in non-core assets (real estate, physical assets, intellectual property)
4. Strategically investing on innovative models (flexibility for students)

Selingo, et al (2013) mention similar strategies and add several more options in reforming colleges, including:

• Stronger partnerships with community colleges
• Online offerings, hybrid courses
• Data driven student advising system
• More flexible and effective learning systems (online tutorials more effective than lecturing, personalized systems)
• Targeted financial aid
• Peer tutors and supplemental instruction
• Forging partnerships with business and government
• Make transferability more accessible
• Performance based funding

Exemplars of Innovation
No one can tell a community and its colleges what they must do to save resources and generate long-term resources. But there are exemplars of schools doing the right thing for their communities and their student bodies.

Coops are innovative partnerships that allow students to gain work experience before graduating. While coops have been an integral part of wealthy schools such as Drexel University, they can also be used to provide people with needed skills to serve a community. In another briefing, I highlight the growth and success of training at Working Class Accupuncture.

In Rockville, Maryland, nine public colleges and universities are housed in one campus--called the Universities at Shady Grove.  The program began 16 years ago  to "produce an educated workforce and encourage college completion among populations that traditionally struggle to get their ­degrees."

Innovative projects may require some pain, but may lead to even stronger and more mindful and sustainable programs.

Spelman College, for example, saved money by removing interscholastic sports, but replaced them with wellness programs that are an incubator for a "wellness revolution."

Social Involvement
Getting institutions to cut administrative fat, reduce cronyism and “dead wood”, and become more innovative will often result in resistance, even as other schools become more innovatative (Lederman, 2013). According to Daneen and Drettler (2012), in order for change to occur, an institution must

• Bring in key stakeholders to make needed change
• Acknowledge that change is necessary throughout the institution
• Address not only cost cutting, but adding value (e.g. consolidation can improve efficiency)
• Be clear about roles and accountability (functional accountability)

Conclusions
People in the US are living in times of increasing government austerity and declining percentages of traditional college-age students. These are political and social realities that are not going away soon. These realities make it vital that students, families, teachers, educational support staff, administrators, business people, taxpayers, alumni, and community members be actively involved in making colleges accessible, accountable, and responsive to society.

Strategic plans require informed input from an array of stakeholders who must be willing to sacrifice and to innovate. Without this, communities should be prepared for their schools to fail financially. Colleges should pay attention to their core missions, be wary of fads, and be able to adapt as their communities and their economies change. I hope that some of the ideas have prompted readers to think about what they can do to promote change in their colleges.

If you are not a member of an elite institution, how will your local school or alma mater listen and respond? Will they keep their heads buried in the sand, or will all stakeholders work together to be more socially responsive and responsible? If administrators and political leaders are unwilling to offer substantive changes, will students, teachers, and communities take a much larger and more active role in governing institutions, as they appear to be starting to do?

Epilogue: A Sincere Effort from Everyone
There is no shortage of knowledge about what works in US higher education. However, politics and power often get in the way of change (Habley, Bloom & Robbins, 2012, Mettler, 2014).

Those in power hoping to keep critics at bay by offering stakeholders a voice--but not actually considering any of their substantive or "radical" ideas--put themselves and their institutions and communities in peril (Hogan, 2003). It may give breathing room for those on the way out, but it doesn't ensure that the institution can survive for the longer run.

Let's get real. Political officials, regents, board members, and administrators know about lucrative and shady business deals, crony administrative positions, and high-priced pet projects. Teachers and teachers unions know about boring, uncaring, and unprofessional teachers who should be fired. Students know about ill-prepared disinterested peers and those who are cheating their way through school. Citizens know about the lack of access for particular people in their neighborhood and the maldistribution of resources. But it takes courage (and outstanding organization) to get everyone working, and struggling together, before a college fails in its mission.

While those with power may argue that others are at fault, they cannot disregard their own duties to facilitate the education and betterment of their communities.

[First edition posted as "The US College Meltdown," April 13, 2015.]

     

Trumpenomics in Action: The Government Buys Big Tech Shares—And What It Means for Higher Education

In a striking display of economic interventionism, the U.S. government has recently purchased equity stakes in semiconductor giants Intel and NVIDIA. At first glance, this seems to contradict the free-market rhetoric championed under Trumpenomics, which is ostensibly about small government, deregulation, and letting corporations thrive on their own. But a closer look reveals that this move is entirely consistent with the logic of Trump-era economic strategy: nationalist, crony-driven, and theatrically populist.

Trumpenomics has never been a pure ideology of laissez-faire capitalism. It is, at its core, crony capitalism in nationalist drag. By choosing winners and funneling government resources toward them, Trump-style economic policy reinforces corporate concentration under the guise of protecting American interests. The decision to buy Intel and NVIDIA shares fits squarely into this pattern. Both companies are critical to U.S. technological sovereignty—chips power everything from personal computers to defense systems. Intervening in their fortunes is sold as a matter of national security, echoing Trump’s tariffs and subsidies justified as shields against China.

The intervention also highlights the performative aspect of Trumpenomics. Trump has long treated stock market indices as proxies for success; prop up a handful of mega-corporations, and the market—and by extension, the administration—looks strong. Buying corporate shares is a literal, direct method of doing just that. Meanwhile, the populist veneer—“saving American jobs and technology”—masks the reality: these are already elite companies benefiting from government support, reinforcing the system’s entrenched inequalities.

Impact on Higher Education

University endowments, many of which invest heavily in large-cap tech stocks including Intel and NVIDIA, are now directly affected by government intervention. Equity purchases by the Treasury can inflate stock prices artificially, benefiting wealthy universities and private institutions while leaving smaller colleges and public universities—often reliant on tuition revenue or modest endowments—behind.

This intervention exacerbates existing disparities in higher education funding. Elite institutions with large endowments gain an additional layer of protection and growth, further concentrating wealth and influence in a sector already criticized for inequality. Meanwhile, public colleges and universities face stagnating resources, rising costs, and growing reliance on contingent labor. The result is a two-tier system: a well-funded elite benefiting from both government intervention and market gains, contrasted with a struggling majority of institutions.

Historically, government-directed industrial support is not new. Wartime production and Cold War defense contracts offered similar interventions, though usually without the claim of free-market purity. What distinguishes this Trumpenomics iteration is the deliberate mixing of nationalist rhetoric, corporate favoritism, and market spectacle—a pattern that has repeated across tariffs, tax cuts, deregulation, and now, equity purchases.

For Americans hoping for a consistent ideology, this move is yet another contradiction. Trumpenomics markets itself as free enterprise but practices selective state intervention when politically and economically expedient. In doing so, it crystallizes the fusion of wealth, power, and nationalist ideology into a system that protects the elite while leaving the majority—including many students and educators—to navigate underemployment, stagnating wages, and an educated underclass.

Divestment from Predatory Education Stocks: A Moral Imperative

Calls for divestment from exploitative industries have long been part of movements for social and economic justice—whether opposing apartheid, fossil fuels, or private prisons. Today, another sector demands moral scrutiny: the network of for-profit education corporations and student loan servicers that have turned higher learning into a site of mass indebtedness and despair. From predatory colleges to the companies that profit from collecting on student debt, the system functions as a pipeline of extraction. For those who believe education should serve the public good, the issue is not merely financial—it is moral.

The Human Cost of Predatory Education

For decades, for-profit college chains such as Corinthian Colleges, ITT Tech, the University of Phoenix, DeVry, and Capella targeted low-income students, veterans, single parents, and people of color with high-pressure marketing and promises of career advancement. These institutions, funded primarily through federal student aid, often charged premium tuition for substandard programs that left graduates worse off than when they began.

When Corinthian and ITT Tech collapsed, they left hundreds of thousands of students with worthless credits and mountains of debt. But the collapse did not end the exploitation—it simply shifted it. The business model has re-emerged in online form through education technology and “online program management” (OPM) firms such as 2U, Coursera, and Academic Partnerships. These firms, in partnership with elite universities like Harvard, Yale, and USC, replicate the same dynamics of inflated costs, opaque contracts, and limited accountability.

The Servicing of Debt as a Business Model

Beyond the schools themselves, student loan servicers and collectors—Maximus, Sallie Mae, and Navient among them—have built immense profits from managing and pursuing student debt. Sallie Mae, once a government-sponsored enterprise, was privatized in the 2000s and evolved into a powerful lender and loan securitizer. Navient, its spinoff, became notorious for deceptive practices and aggressive collections that trapped borrowers in cycles of delinquency.

Maximus, a major federal contractor, now services defaulted student loans on behalf of the U.S. Department of Education. These companies profit directly from the misery of borrowers—many of whom are victims of predatory schools or structural inequality. Their incentive is not to liberate students from debt, but to sustain and expand it.

The Role of Institutional Investors

The complicity of institutional investors cannot be ignored. Pension funds, endowments, and major asset managers have consistently financed both for-profit colleges and loan servicers, even after repeated scandals and lawsuits. Public sector pension funds—ironically funded by educators—have held stock in Navient, Maximus, and large for-profit college operators. Endowments that pride themselves on ethical or ESG investing have too often overlooked education profiteering.

Investment firms like BlackRock, Vanguard, and State Street collectively hold billions of dollars in these companies, stabilizing an industry that thrives on the financial vulnerability of students. To profit from predatory education is to participate, however indirectly, in the commodification of aspiration.

Divestment as a Moral and Educational Act

Divesting from predatory education companies and loan servicers is not just an act of conscience—it is an educational statement in itself. It affirms that learning should be a vehicle for liberation, not a mechanism of debt servitude. When universities, pension boards, and faith-based investors divest from corporations like Maximus, Navient, and 2U, they are reclaiming education’s moral purpose.

The divestment movement offers a broader civic lesson: that profit and progress are not synonymous, and that investment must align with justice. Faith communities, student debt activists, and labor unions have made similar stands before—against apartheid, tobacco, and fossil fuels. The same principle applies here. An enterprise that depends on deception, coercion, and financial harm has no place in a socially responsible portfolio.

A Call to Action

Transparency is essential. Pension boards, university endowments, and foundations must disclose their holdings in for-profit education and student loan servicing companies. Independent investigations should assess the human consequences of these investments, particularly their disproportionate impact on women, veterans, and people of color.

The next step is moral divestment. Educational institutions, public pension systems, and religious organizations should commit to withdrawing investments from predatory education stocks and debt servicers. Funds should be redirected to debt relief, community college programs, and initiatives that restore trust in education as a public good.

The corporate education complex—spanning recruitment, instruction, lending, and collection—has monetized both hope and hardship. The time has come to sever public and institutional complicity in this cycle. Education should empower, not impoverish. Divestment is not merely symbolic—it is a declaration of values, a demand for accountability, and a reaffirmation of education’s original promise: to serve humanity rather than exploit it.

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Sources:

• U.S. Department of Education, Borrower Defense to Repayment Reports

• Senate HELP Committee, For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success (2012)

• Consumer Financial Protection Bureau (CFPB) enforcement actions against Navient and Sallie Mae

• The Century Foundation, Online Program Managers and the Public Interest

• Student Borrower Protection Center, Profiting from Pain: The Financialization of the Student Debt Crisis

• Higher Education Inquirer archives

A New Era of Accountability: The Case for Taxing Universities with Legacy Admissions.

As debates around the fairness of college admissions continue to dominate headlines, a growing number of voices are calling for a fundamental change in how universities operate—especially when it comes to legacy admissions. Legacy admissions, a practice where children of alumni are given preferential treatment in the admissions process, have long been a controversial issue. Critics argue that these policies disproportionately benefit wealthy, predominantly white families, perpetuating cycles of privilege and inequality in higher education.

However, a new idea has emerged: what if universities that maintain legacy admissions policies were taxed? This radical proposal seeks to directly address the social and economic disparities that legacy admissions exacerbate. Let’s break down how this concept could work and why it may be an essential step toward greater fairness in higher education.

Legacy Admissions and Their Impact

Legacy admissions are widely seen as a way for universities to maintain strong alumni relations and secure large financial donations. While this may have practical advantages for universities, the social consequences are more troubling. Studies have shown that legacy students tend to come from wealthier backgrounds and are often already overrepresented in the student body of elite institutions.

For example, at Ivy League schools like Harvard and Yale, legacy students make up a disproportionately high percentage of the accepted class, despite often having lower academic performance metrics compared to their non-legacy peers. The practice has sparked outrage from students, parents, and activists who argue that it locks out deserving candidates from underrepresented communities, particularly students of color and first-generation college applicants.

The Taxation Proposal

The core of the proposed policy is simple: universities that admit a significant number of legacy students—say, 20% or more of the incoming class—would be required to pay a tax based on the proportion of legacy students admitted. This tax could be structured progressively, with higher taxes imposed on universities with a greater percentage of legacy admits. The funds raised could be earmarked for initiatives aimed at increasing diversity, providing scholarships for underrepresented students, or supporting public universities that offer accessible, low-cost education.

The argument for this approach is rooted in the idea that universities benefiting from preferential admissions policies should be held financially accountable for the social inequality they perpetuate. By taxing legacy admissions, we create an economic incentive for universities to reconsider these outdated practices and move toward a more equitable admissions process.

Economic and Social Benefits

1. Encouraging Diversity: Universities that rely on legacy admissions often argue that they are fostering long-term relationships with alumni and maintaining their traditions. However, the proposed tax would encourage schools to focus more on diversity and accessibility. With the additional tax burden, institutions would likely seek alternative ways to boost their endowments or attract alumni donations, potentially pushing them toward more inclusive, merit-based admissions policies.

2. Supporting Public Institutions: The revenue generated from taxing legacy admissions could be reinvested into public universities, which often face funding shortages and higher tuition rates. These schools serve a larger proportion of low-income and first-generation students, and additional funding could help close the equity gap between public and private universities.

3. Public Accountability: The tax system would provide an additional layer of public accountability for how universities operate, ensuring that schools with large endowments and large alumni bases do not perpetuate systems of privilege at the expense of broader societal equality.

Addressing Concerns

Opponents of this idea will likely argue that taxing universities could have unintended consequences, such as limiting the resources available for financial aid or academic programs. Some may also claim that legacy admissions serve a legitimate purpose in fostering strong alumni networks and ensuring continued donations.

However, these concerns fail to address the larger moral issue at stake: the perpetuation of privilege in higher education. Universities, especially those with large endowments, can afford to innovate and adapt. Many already provide substantial financial aid packages, and the taxes levied on legacy admissions would provide a direct opportunity to reinvest those resources into a more equitable future.

The Path Forward

In many ways, taxing legacy admissions is just one piece of the puzzle. A comprehensive reform agenda would also include revisiting standardized testing practices, increasing transparency in the admissions process, and offering more substantial financial aid packages to students from underrepresented backgrounds. However, the idea of using tax policy to address the inequities embedded in legacy admissions provides a concrete, measurable step forward.

It’s time for universities to evolve and embrace a future where access to higher education is based on merit, not on family connections or wealth. By taxing schools that perpetuate legacy admissions, we can push institutions to confront their role in social inequality and work toward a more inclusive and accessible system for all students.

The Haves and Have Nots of Higher Education and Student Loan Debt

In a move that has raised eyebrows across Washington and beyond, President Donald Trump recently announced a plan to transfer the U.S. Department of Education’s vast student loan portfolio—totaling a staggering $1.8 trillion—to the Small Business Administration (SBA). This bold step is ostensibly designed to streamline the management of federal student loans, but it is also seen by many as the first move in a larger effort to dismantle the Department of Education entirely, reduce federal oversight, and privatize key aspects of the student loan system. Alongside this plan, there are growing discussions about eliminating essential borrower protections, including programs like Public Service Loan Forgiveness (PSLF), Pay As You Earn (PAYE), Income-Contingent Repayment (ICR), and the Borrower Defense to Repayment program, all of which have offered critical relief to millions of students. Additionally, the rollback of Gainful Employment regulations—which were designed to protect students from predatory for-profit institutions—further signals a shift toward private sector control, which has historically benefited lenders over borrowers.

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The Alleged 'Rescue' of the Loan Portfolio

The White House has framed the transfer of the student loan portfolio to the SBA as a necessary step to relieve the Department of Education (ED) of a heavy burden, positioning the SBA as the new “caretaker” of the nation’s student debt. According to President Trump, the SBA—under the leadership of Kelly Loeffler—will now handle the $1.8 trillion student loan portfolio, while the Department of Education focuses on other key educational initiatives.

For some, the move seems like a fresh approach to a problem that has long plagued U.S. higher education: the overwhelming student debt crisis. However, a deeper look into the mechanics of the transfer suggests that this could be the first step toward a far more troubling goal: the dismantling of the federal student loan system and the privatization of debt, a shift that could harm millions of consumers in the process.

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The SBA’s Inexperience with Student Loans

The SBA, traditionally tasked with managing small business loans, lacks the expertise to effectively manage the complex structure of federal student loans, which include income-driven repayment plans, loan forgiveness programs, and various protections for struggling borrowers. With the agency also facing significant staffing cuts, it’s highly unlikely that the SBA will be able to competently handle such a vast and complicated portfolio—especially when 40% of these loans are already in default or behind on payments.

This raises an obvious question: is the SBA being set up to fail? Some insiders suggest that the failure of the SBA to properly manage the student loan portfolio could be deliberate—creating a crisis that would justify selling off the portfolio to private companies, thus privatizing the entire system.

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The Planned Failure: A Strategy for Privatization?

According to several former senior officials within the Department of Education, the transfer of the student loan portfolio to the SBA could be a calculated move to destabilize the federal loan system. The apparent failure of the SBA to manage the loans would then serve as a justification for transferring the loans to the private sector. This mirrors tactics used in other sectors where privatization was pursued under the guise of government inefficiency. The fear is that this move could ultimately lead to for-profit companies taking over the loan system, with borrowers facing higher interest rates, stricter repayment terms, and the loss of essential protections.

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Who Stands to Gain from Privatizing Student Loans?

The shift toward privatizing student loans stands to benefit several key players in the financial and educational sectors, particularly for-profit companies and private lenders who have long pushed for deregulation and profit-driven management of student debt. The primary beneficiaries would include:

1. Private Lenders and Financial Institutions: Banks, investment firms, and loan servicing companies are the most obvious winners in a privatized student loan system. With the federal government stepping back, these entities would gain control over the $1.8 trillion portfolio, allowing them to set higher interest rates, stricter repayment terms, and impose fees on borrowers. This would turn student loans into even more lucrative financial products for the private sector.

2. For-Profit Educational Institutions: For-profit colleges, which often rely on student loans to fund their operations, could also stand to gain. These institutions—many of which have faced significant scrutiny for high tuition costs and poor student outcomes—would benefit from a less regulated environment. Without the Gainful Employment regulations, which were designed to hold these institutions accountable for their job placement and earnings data, they would face fewer restrictions on their recruitment practices and financial dealings, potentially allowing them to continue enrolling students in expensive, low-quality programs.

3. Servicers and Debt Collection Agencies: Loan servicers and debt collection agencies that would likely take over the management of student loans in a privatized system stand to profit greatly. By controlling the servicing of student loans, these companies can increase their fees and aggressively pursue defaulting borrowers, further exacerbating the financial hardship for many students. These entities would benefit from a less regulated environment where the focus would shift toward profitability, often at the expense of borrowers.

4. Political Donors and Lobbyists: Financial institutions and for-profit education providers have historically been major political donors and lobbyists, particularly to policymakers who have pushed for deregulation of student loan systems. Privatization could provide these stakeholders with the opportunity to consolidate their power over the student loan industry, influencing policy decisions in their favor and ensuring continued access to profits from the student loan market.

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A History of Struggles: Lack of Oversight and Privatization Since the 1980s

The idea of privatizing student loans and dismantling federal oversight is not entirely new. In fact, the U.S. student loan system has been struggling for decades due to a lack of oversight and a trend toward privatization dating back to the 1980s. The federal government’s role as a guarantor of student loans—starting with the creation of the Guaranteed Student Loan (GSL) program in the 1960s—was eventually scaled back, leading to a rise in private student loans. As private lenders entered the student loan market, particularly during the 1990s and 2000s, the system became increasingly unregulated, leading to rising debt levels and predatory lending practices.

By the 1980s, the federal government’s reliance on private institutions to handle student loans led to a lack of transparency, accountability, and consumer protections. In particular, private lenders began to offer loans with fewer safeguards, contributing to the explosion of student loan debt and the proliferation of for-profit colleges that preyed on vulnerable students. The government, despite its involvement, increasingly stepped back from actively managing the loan system, leaving students with limited options for relief when they fell into financial distress.

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The Consequences of Deregulation: Elite Colleges and the Growing Educated Underclass

One of the most significant byproducts of the shift toward privatization and deregulation in U.S. higher education has been the growth of a growing educated underclass. While elite colleges have continued to thrive, expanding their endowments and increasing their tuition fees, a large segment of the population is left with a degree and overwhelming debt that fails to deliver on its promise. Over the past several decades, prestigious universities have only gotten wealthier, with many now sitting on endowments of billions of dollars. These institutions benefit from the student loan system, which allows students to take on more debt to afford high tuition costs, all while their wealthy alumni networks and expansive endowments only grow larger.

At the same time, a growing number of students from lower-income backgrounds—many of whom attend for-profit or underfunded public colleges—are graduating with significant debt and few prospects for stable, high-paying careers. This has created a growing “educated underclass,” where graduates with degrees struggle to find employment that pays enough to manage their loan repayment, further exacerbating wealth inequality.

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The Dangers of Future Issues: AI, Automation, and the Loss of Good Jobs

Looking to the future, the privatization of student loans and the increasing burden of student debt could be exacerbated by emerging technological shifts, particularly in the fields of artificial intelligence (AI) and automation. As industries evolve and more jobs become automated, many middle-class careers traditionally accessible to graduates may disappear or evolve into low-wage, low-security positions. This could lead to an even larger divide between the "haves" and "have-nots" in society, where only those with connections or elite educational backgrounds can secure stable, high-paying employment.

For students entering the workforce with massive student loan debt, this would present a troubling scenario where their ability to repay their loans becomes even more difficult as fewer well-paying jobs are available. This, in turn, would increase the financial strain on future generations of students who are already navigating a rapidly changing job market. For many, student loans could become an insurmountable barrier, keeping them trapped in cycles of debt that are impossible to escape.

Moreover, the increasing reliance on private companies to manage student loans, with their focus on profitability, could exacerbate these issues by offering fewer opportunities for income-driven repayment plans or relief options that account for the economic realities of an AI-powered, automation-driven economy. As the job market continues to shrink and evolve, the need for federal programs to support borrowers through tough economic times will only grow.

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The Impact of Eliminating Borrower Protections

The elimination of borrower protections—such as PSLF, PAYE, ICR, and Borrower Defense to Repayment—would significantly worsen the student loan crisis. Public Service Loan Forgiveness, for example, allows individuals working in essential public service careers to receive loan forgiveness after ten years of qualifying payments. Without this program, many public servants would face a lifetime of insurmountable debt. Similarly, income-driven repayment programs allow borrowers to repay loans based on their income, making it easier for those in low-paying fields to manage their debt.

The Borrower Defense to Repayment program provides vital relief to students who were defrauded by their institutions. Without strong enforcement of this program, students may have no recourse to seek relief from predatory schools. The rollback of Gainful Employment regulations could further expose students to the risks of attending for-profit institutions that fail to deliver on their promises.

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The Long-Term Fallout: A Dangerous Precedent

The long-term consequences of privatizing student loans could include exacerbating wealth inequality, widening the racial wealth gap, and creating an economic landscape where education debt is a permanent burden on a generation of students. If privatization moves forward, the financial burden of education will likely become a far more persistent and overwhelming problem, especially for those who can least afford it.

What’s particularly concerning is that in past crises, it’s the elites—wealthy colleges, financial institutions, and large corporations—that have consistently received the bulk of government bailouts. The same institutions that contribute the least to solving the country’s educational inequities continue to benefit from taxpayer-funded relief. If privatization moves forward, we cannot allow the same pattern to repeat itself. The majority of relief should go to those most burdened by student debt, not those who already have the means to navigate the system with ease.

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The Future of Higher Education Debt: A Call to Protect Federal Loan Programs

At the Higher Education Inquirer, we stand in full support of federal student loan forgiveness and repayment programs, including PSLF, PAYE, and ICR, as they offer essential pathways for borrowers, especially public service workers and low-income individuals. These programs provide vital relief to borrowers, allowing them to focus on their careers without the burden of overwhelming debt. We urge policymakers to protect, enhance, and expand these vital initiatives to ensure that education remains accessible and equitable for all.

As we continue to face challenges in higher education financing, it is crucial to learn from past mistakes and advocate for systems that prioritize the well-being of students, not profit. The proposed privatization of the student loan system threatens to undo decades of progress and burden future generations with lifelong debt. It is essential that we protect these programs and work toward a solution that prioritizes education and fairness over corporate interests.

When American Greed is the Norm

Greed is no longer a sin in America—it’s a system. It’s a curriculum. It’s a badge of success. In the American higher education marketplace, greed is not the exception. It’s the norm.

We see it in the bloated salaries of university presidents who deliver austerity to everyone but themselves. We see it in billion-dollar endowments hoarded like dragon’s gold while students drown in debt. We see it in the metastasizing ranks of middlemen—consultants, online program managers, enrollment optimization firms—who profit off the dreams and desperation of working-class families.

But greed in American higher education is more than a few bad actors or golden parachutes. It is institutionalized, normalized, and weaponized.

The Student as Customer, the Campus as Marketplace

It began with the rebranding of education as a “return on investment,” a transaction rather than a transformation. The purpose of college was no longer to liberate the mind but to monetize the degree.

By the 1990s, under bipartisan neoliberal consensus, public colleges were defunded and forced to adopt the private sector’s logic: cut costs, raise prices, sell more. Tuition rose. Debt exploded. The ranks of administrators swelled while faculty were downsized and adjunctified. The market had spoken.

But even that wasn’t enough. A generation of edu-preneurs emerged—Silicon Valley-funded disruptors, for-profit college chains, and online program managers—who turned learning into a scalable commodity. Robocolleges like Southern New Hampshire University, Purdue Global, and the University of Phoenix began operating more like tech platforms than institutions of thought.

The result? Diploma mills at the front end and collection agencies at the back.

Greed in the Name of God and Country

Greed doesn’t always look like Wall Street. Sometimes it wears the face of morality. Religious colleges, some of them under the protection of nonprofit status, have become breeding grounds for political operatives and ideological grooming—while raking in millions through taxpayer-funded financial aid.

Liberty University, Grand Canyon University, and a host of lesser-known Bible colleges operate under a warped theology of prosperity, turning salvation into a subscription plan. Meanwhile, they push anti-democratic ideologies and funnel money toward political causes far removed from the mission of education.

Accreditation as a Shell Game

The accreditors—the supposed watchdogs of educational quality—have been largely asleep at the wheel or complicit. When greed is the norm, accountability is an inconvenience. For-profit schools regularly reinvent themselves as nonprofits. Online program managers operate in regulatory gray zones. Mergers and acquisitions disguise collapse as growth.

Accreditation agencies rubber-stamp it all, as long as the paperwork is tidy and the lobbyists are well-compensated.

Debt as Discipline

More than 43 million Americans carry federal student loan debt. Many will never escape it. This debt is not just financial—it’s ideological. It keeps the workforce compliant. It disciplines dissent. It renders critical thought a luxury.

And those who push for debt relief? They are met with moral lectures about personal responsibility—from the same lawmakers who handed trillions to banks, defense contractors, and fossil fuel companies.

Silicon Valley's Hungry Mouth

The new frontier of greed is AI. Tech giants like Google, Amazon Web Services, and Meta are embedding themselves deeper into education—not to empower learning, but to extract data, monetize behavior, and deepen surveillance. Every click, every quiz, every attendance record is a monetizable moment.

Universities, starved for funding and afraid of obsolescence, are selling access to students in exchange for access to cloud infrastructure and algorithmic tools they barely understand.

Greed Isn’t Broken—It’s Working as Designed

In this system, who wins? Not students. Not faculty. Not society.

The winners are those who turn knowledge into a commodity, compliance into virtue, and inequality into inevitability. Those who build castles from the bones of public education, then retreat behind walls of donor-backed endowments and think tanks. The winners are few. But they write the rules.

A Different Future Is Possible

If American greed is the norm, then what remains of education’s soul must be found in the margins—in the community college professor working three jobs. In the librarian defending open access. In the adjunct organizing a union. In the students refusing to be pawns in someone else’s game.

The antidote to greed is not charity—it’s solidarity.

Until justice is funded as well as football. Until learning is valued more than branding. Until access is more than a talking point on a donor brochure—then greed will remain not just a sin, but a system.

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Sources

• U.S. Department of Education, National Center for Education Statistics

• The Century Foundation, “The OPM Industry: Profits Over Students” (2023)

• Chronicle of Higher Education, “Administrative Bloat and the Adjunct Crisis”

• IRS Nonprofit Filings, Liberty University and Grand Canyon University

• Debt Collective, “The State of Student Debt” (2025)

• Public records and audits of Title IV institutions, 2022–2024

• Higher Education Inquirer archives

Harvard, Russia, and the Quiet Complicity of American Higher Education

In the fog of elite diplomacy and global finance, some of the United States' most prestigious universities—chief among them, Harvard—have long had entangled and often opaque relationships with authoritarian regimes. While recent headlines focus on China’s influence in higher education, far less attention has been paid to the role elite U.S. institutions have played in legitimizing, enabling, and profiting from post-Soviet Russia’s slide into oligarchy and repression.

The Harvard-Russia Nexus

Harvard University, through its now-infamous Harvard Institute for International Development (HIID), was a key player in Russia's economic transition following the collapse of the Soviet Union. During the 1990s, HIID, backed by millions of dollars in U.S. government aid through the U.S. Agency for International Development (USAID), provided advice on privatization and market reforms in Russia. This effort, touted as a cornerstone of democracy promotion, instead helped consolidate power among a small class of oligarchs, fueling the economic inequality and corruption that ultimately laid the foundation for Vladimir Putin's authoritarian rule.

Harvard’s involvement reached scandalous proportions. In 2001, the U.S. Department of Justice sued Harvard, economist Andrei Shleifer (a professor in Harvard's Economics Department), and others for self-dealing and conflict of interest. Shleifer and his associates were found to have used their insider access to enrich themselves and their families through Russian investments, all while supposedly advising the Russian government on behalf of the American taxpayer. Harvard eventually paid $26.5 million to settle the case.

Though the scandal damaged HIID's reputation and led to its closure, the broader complicity of the academic and financial elite in exploiting Russia’s vulnerability during the 1990s has received little sustained scrutiny.

Lawrence Summers and the Russian Connection

At the center of this story sits Lawrence Summers—a former Harvard president, U.S. Treasury Secretary, and one of the most powerful figures in the transatlantic economic order. Summers was both mentor and close associate of Andrei Shleifer. During the critical years of Russian privatization, Summers served as Undersecretary and later Secretary of the Treasury under President Clinton, while Shleifer operated HIID’s Russia project.

Despite the blatant conflict of interest, Summers never publicly disavowed Shleifer's actions. After returning to Harvard, he brought Shleifer back into the university’s good graces, protecting his tenured position and helping him avoid serious institutional consequences. This protection underscored the tight-knit nature of elite networks where accountability is rare and reputations are guarded like intellectual property.

Summers himself has invested in Russia through various vehicles over the years, and has held lucrative advisory roles with financial firms deeply enmeshed in post-Soviet economies. He also played an advisory role for Russian tech giant Yandex and has appeared at events sponsored by firms with deep Russian connections. While Summers has since criticized the Putin regime, his earlier role in enabling the very conditions that empowered it is seldom discussed in polite academic company.

A Broader Pattern of Complicity

Harvard is not alone. Institutions like Stanford, Yale, Georgetown, and the University of Chicago have produced scholars, consultants, and think tanks that helped construct the framework of neoliberal transition in Russia and Eastern Europe. These universities not only trained many of the Russian technocrats who later served in Putin’s government, but also quietly benefited from international partnerships, fellowships, and endowments tied to post-Soviet wealth.

Endowments at elite institutions remain shrouded in secrecy, and it is not always possible to trace the sources of foreign gifts or investments. But it’s clear that Russian oligarchs—many of whom owe their fortunes to the very privatization schemes U.S. economists championed—have made donations to elite Western universities or served on their advisory boards. Some sponsored academic centers and fellowships designed to burnish their reputations or reframe narratives about Russia’s transformation.

The Death of a Dissident

The failure of Western academic institutions to reckon with their role in Russia’s descent into authoritarianism became all the more glaring with the death of Alexei Navalny in February 2024. Navalny, a fierce critic of corruption and Putin’s regime, was imprisoned and ultimately killed for challenging the very system that U.S. advisers like those from Harvard helped engineer. While universities issued public statements condemning his death, few acknowledged the deeper complicity of their faculty, programs, and funders in building the oligarchic structures Navalny spent his life trying to dismantle.

Navalny repeatedly exposed how Russian wealth was funneled into offshore accounts and Western real estate, often aided by a global network of enablers—including lawyers, bankers, and academics in the West. His death is not just a symbol of Putin’s brutality—it is also a damning indictment of the institutions, both in Russia and abroad, that failed to stop it and, in many cases, profited along the way.

Where is the Accountability?

Despite the Shleifer scandal and Russia’s authoritarian consolidation, there has been no independent reckoning from Harvard or its peer institutions about their role in the failures of the 1990s or the long-term consequences of their economic evangelism. The neoliberal ideology that fueled these efforts—steeped in faith in free markets, minimal regulation, and elite technocracy—remains dominant in elite policy circles, even as it faces growing critique from both left and right.

Meanwhile, institutions like Harvard continue to influence global policy through their academic prestige, think tanks, and alumni networks. They remain powerful arbiters of truth—shaping how the public understands foreign policy, democracy, and capitalism—while rarely acknowledging their own entanglement in the darker chapters of globalization.

Elite Academia and Oligarchy

The story of Harvard and Russia is not just a tale of one institution’s failure; it is emblematic of the broader failure of elite American academia to confront its own role in the spread of oligarchy, inequality, and authoritarianism under the banner of liberal democracy. In an age when higher education is under increased scrutiny for its political and financial entanglements, the need for critical journalism and public accountability has never been greater.

The Higher Education Inquirer will continue to investigate these complex relationships—and demand transparency from the institutions that claim to serve the public good, while operating behind a veil of privilege and power. Navalny’s sacrifice deserves more than hollow statements. It requires a full accounting of how the system he died fighting was built—with help from the most powerful university in the world.