Can you point to anything which supports this assertion? I see angst in places like WVa and other states where a lot of money was spent trying to draw OOS students but I have not seen anything which says public support for state schools will increase if we go back to cinderblock dorms and government cheese for lunch.
Most forms of higher education might be cheaper in Europe than in the U.S., but that doesnât mean young people are better off there. Note the youth unemployment rates throughout the continent:
Most are higher than in the U.S., suggesting a lot of European degrees may not be worth much. Better for many young Europeans, as well as Americans, to learn a valuable trade.
I donât know the underlying breakdown of their endowment so I can only make a few guesses but first and foremost assets donât equate to cashflow and they likely need cashflow. If they have assets tied up in PE or hedge funds their has been fewer liquidity events this yes. Donations may also be affected and their budgets were likely multiyear and current conditions may not line up with previous assumptions.
Also, if you can borrow against your portfolio at a cost lower than expected gains they would borrow against those assets rather than sell off chunk to fund short term needs.
I found this https://lesshighschoolstress.com which was cited in some newspaper opinions. It goes through the numbers in terms of growth in high school graduates, number of available seats, studies on outcomes, employer opinions, etc. much like this thread.
I really wanted to post it as an antidote to application anxiety. Iâm not sure after reading it actually does reduce stress, especially as state flagship schools admission decisions are becoming less predictable. Iâd love to see more updated numbers since it is a few years old. I do think the premise that there are very bright students at a range of schools is true.
But the benefits they gain from governmental support is substantial. The new endowment tax is a paltry 1.4% on realized gains. Nominal corporate taxes can be 21% I believe? LT capital gains for general public is similar. They are paying 1/15 of what an unsupported corporation should pay.
I believe recent tax liabilities for Harvard and Stanford were roughly ~$36M each. If they were taxed at the higher rate it could reach $540M/yr [per school]. Itâs doubtful they can be the institutions they are today without federal support (ie non profit tax status). [eh, maybe they can. I just read Stanfordâs operating budget is just about 9B]
Imagine all those funds distributed to help FA at flagships.
You just imagined eliminating non-profit status for universities. Now of course there is a non-zero possibility that could happen but the realistic chance of it happening is virtually zero.
Since these statistics donât differentiate between young people with and without a degree it doesnât really address whether or not European degrees arenât âworth muchâ.
Well⊠Iâm actually imagining raising that existing 1.4% tax to something higher. Another way to think about it is to make the endowment taxed as for profit (of course, donations and other forms of donations/revenue have to be examined for attempts to deftly circumvent tax payment).
I feel that if the endowment tax was more progressive, then weâd have greater acceptance. No need to further burden Sweet Briar when weâre really targeting the Harvard/Yale/Stanford/etc of the academic world.
[or did I misunderstand your comment? Do you mean on the receiving side? I.e. flagships cannot accept those funds for use as FA?]
This was very interesting to see. In April 2023 (the date that the linked article used), the U.S. youth unemployment rate was 6.5%, which would have been the 3rd lowest in the EU (behind Slovenia and Germany). Here are some of the rates of some Europan countries:
Denmark: 10.7%
France: 17%
Spain: 27.9% (the highest)
For the EU generally, it was 13.8%.
Source for the U.S. rate of 6.5% (which has since gone up since April 2023)
This source also provides a graph to show the rise and fall of the youth unemployment rate from the early 1990s until now.
ETA:
True. What the data point means can be a point of disagreement, but I still found it an interesting point.
Also, laws in some European countries make it very difficult to dismiss employees to the point that employers are reluctant to hire, resulting in an insider/outsider labor market which is nice if you an insider, but makes it much more difficult for outsiders to get jobs.
An analogous situation in the US is tenured college faculty.