Elite Universities Received $45 Billion in Federal Funding in 5 Years: Audit

Elite Ivy League institutions, including Stanford and Northwestern, have reportedly garnered $45 billion in federal payments, tax breaks, and subsidies over the past five years, according to the recent audit by Open the Books.

The findings shed light on the financial contributions from U.S. taxpayers to some of the nation’s most prestigious academic institutions, as auditors at the group found that between 2018 and 2022, 10 elite universities received roughly $33 billion in federal contracts and grants.

This figure has raised eyebrows, as it surpasses the total undergraduate student tuition collected by these institutions during the same period. The report further highlights an additional $12 billion in special tax treatment on the substantial gains from their collective endowments.

“Today, these ‘educational’ non-profits are more federal contractor than they are educator—having collected less than $33 billion in undergraduate student tuition during the period,” Open the Books stated in its report.

Some of these changes were informed by the 2017 Tax Cuts and Jobs Act, which imposed a 1.4 percent tax on investment income for university endowments exceeding $500,000 per student, rather than the 20 percent capital gains tax requirement for wealthy Americans.

Despite the universities’ significant financial resources, Open the Books found that five Ivy League colleges reportedly took $220.6 million in COVID-19 aid bailouts through the Higher Education Emergency Relief Fund. Notably, Harvard, Yale, Stanford, Princeton, and Northwestern did turn down $406 million collectively in available congressional funds.

The report also delved into specific grants allocated to these institutions. Examples include Stanford receiving $1.851 million to study the effects of the “retail environment for tobacco and marijuana” on college students and Cornell securing $4.173 million to increase the number of minority faculty in the biological sciences.

Historically, the Ivies have been criticized for wasting taxpayer resources: In 2014, Cornell University took from the National Science Foundation a $1 million grant for a study on “where it hurts the most to be stung by a bee.” In 2012, Columbia University received $5.7 million from the National Science Foundation to create fake voicemails from the year 2065 in a hypothetical world decimated by climate change.

Universities in the Spotlight Following Hamas Attacks on Israel

The use of federal funding by these universities has come under increased scrutiny since the controversy surrounding the Oct. 7 Hamas terror attacks on U.S. ally Israel has caused polarizing unrest on college campuses, as the Open the Books report outlines.

Stanford University, with an endowment of $36.3 billion and five-year federal funding totaling $7 billion, faced criticism for its response to the Hamas attacks. Stanford President Richard Saller and Provost Jenny Martinez’s failure to condemn Hamas in an official letter drew backlash from more than 1,800 Stanford affiliates.

Columbia University, with an endowment of $13.28 billion and five-year federal funding of $5.8 billion, faced protests following the early October attacks, with 20 student groups signing a letter holding Israel accountable, leading to the suspension of two groups for “threatening rhetoric and intimidation” toward Jewish students.

The University of Pennsylvania, with an endowment of $21 billion and five-year federal funding of $3.7 billion, faced scrutiny for allegedly not condemning attacks on Israeli citizens and overlooking concerns from the university’s Jewish community.

Because of the nature of funding usage, among other concerns, top Republicans, including House Republican Conference Chair Elise Stefanik (R-N.Y), Sen. Tim Scott (R-S.C.), and former U.N. Ambassador Nikki Haley, have voiced concerns about taxpayer dollars funding institutions that allegedly promote anti-Semitism or anti-Israel sentiments.

Ms. Stefanik, according to a report by Fox News, said: “It is abhorrent that Harvard and universities across America are enabling horrific antisemitism to run rampant on their campuses. U.S. taxpayer dollars should be prohibited from funding any institution that promotes antisemitism or anti-Israel bigotry, and House Republicans will hold these extremist institutions accountable for failing their students.”

Calls to reevaluate federal funding for these schools are gaining momentum. Republican 2024 frontrunner former President Donald Trump has proposed redirecting funds collected from taxing university endowments to establish a new institution, the American Academy, which would provide free education to Americans without adding to the national debt.