According to a recent audit by Open The Books, elite Ivy League institutions such as Stanford and Northwestern have collectively received $45 billion in federal payments, tax breaks, and subsidies over the past five years. This audit uncovered that between 2018 and 2022, 10 prestigious universities received approximately $33 billion in federal contracts and grants, exceeding the total amount of undergraduate student tuition collected during the same period. Additionally, the report highlighted an extra $12 billion in special tax treatment on the significant gains from their combined endowments.
Some of these financial benefits were influenced 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. It is notable that even with their substantial financial resources, five Ivy League institutions reportedly accepted $220.6 million in COVID-19 aid bailouts from the Higher Education Emergency Relief Fund.
Furthermore, specific grants allocated to these universities were cited in the report. For example, Stanford received $1,851,075 to study the impact of the “retail environment for tobacco and marijuana” on college students, and Cornell secured $4.173 million to increase the number of minority faculty in the biological sciences. Historically, Ivy League schools have also been criticized for questionable usage of taxpayer resources, such as Cornell receiving a $1 million grant for a study on the impact of being stung by a bee and Columbia University obtaining $5.7 million to create fake voicemails from a hypothetical world devastated by climate change.
These findings have brought increased scrutiny to how federal funds are being used by these institutions, particularly in light of controversial events on college campuses. Stanford University, Columbia University, and the University of Pennsylvania are among those that have faced criticism for their responses to specific incidents, leading to calls from prominent Republicans to reevaluate federal funding for such schools. Former President Donald Trump has even proposed redirecting funds from taxing university endowments to establish a new institution providing free education without adding to the national debt.