Yale University has fancy dining halls. They pay no property tax.
Local restaurants struggle to compete, but their tax burden makes that hard.
“We basically pay one-third of our rent in taxes!” complains Matt West, manager of Koon Thai Restaurant. “Yale is a money-making machine.”
It is. Many colleges are.
Yale has a $31 billion endowment. Harvard’s is $40 billion. My alma mater, Princeton, has $26 billion.
Yet, these schools also get government handouts and tax breaks. How government rips-off taxpayers and students by subsidizing colleges is the subject of my video this week.
Yale owns about a quarter of the town of New Haven, Connecticut, but the school pays little property tax. It even has a golf course that’s half tax-exempt.
Politicians tried to tax the school, but they cannot.
“It’s written into the constitution,” complains New Haven Board of Alders President Tyisha Walker-Myers. “They just don’t have to pay.”
Now the city is ticketing more cars to try to cover its budget shortfall.
Everyone else pays more because colleges get tax breaks, government grants, and government loans.
“De-fund universities!” says Inez Stepman, senior policy analyst at the Independent Women’s Forum. “Their entire business model is dependent on the taxpayer.”
I push back: “You make it sound like it’s all government money. But people pay their own way.”
She corrects me: “Without that lifeblood of those federal student loans, very few universities would be able to operate. They are dependent on that federal interference.”
They’re dependent because they’ve raised their prices so much. When I went to college, my tuition was $1,950. Now, Princeton charges $53,890.
After government increased subsidies, colleges raised tuition prices at four times the rate of inflation.
They spend the money not just on golf courses and fancy foods. They build new stadiums, first-class swimming pools, media rooms and some even offer students housekeeping.
Why not spend? Colleges know they will get more money from taxpayers. The federal government is now America’s biggest largest provider of student aid.
“There is no check on the cost of a college degree,” says Stepman. “If students had to walk into Wells Fargo for those loans, Wells Fargo would look at whether or not those loans would be paid back. The federal government doesn’t ask any of those questions.”
So, money is thrown at students who don’t benefit. Today, almost half the students given loans don’t graduate in six years.
Instead, says Stepman, they have “$50 or $60 or $80,000 in debt, without the degree to show for it.”
Taxpayers lose. Students lose. The winners are bloated colleges.
Colleges say they deserve every loan and tax break because they make “wiser citizens.”
“They’re not,” says Stepman. “They’re making citizens who hate their country.”
I push back again. “Most colleges educate rather than indoctrinate.”
“I wish that were true,” replies Stepman. “I was part of the College Republicans… registering voters. I actually had a professor walk up and spit on me. Another called us the ‘Nazi Youth.’ These are professors!”
“It’s offensive,” she adds, “that we take dollars out of mechanics’ pockets and put them into the pockets of, largely, middle-class and upper-middle-class students.”
It is offensive.
But that’s what America does.
Unfortunately, our next president wants to do even more of it.
Image by David Mark from Pixabay
13 thoughts on “Freeloader U”
I got into some student loan debt. Not alot, but substantial. I’m more educated, but I was in CA, so being bilingual is a big deal to find a job. I’m in Texas now hoping to find a good job here. I think colleges, are a farce, unless you’re learning a vocation. We teach our kids not to entangle themselves in debt and liberal ideas. I wouldn’t waste my time or money if I had it to do over again.
Texas is Bi-lingual too.
Most large Silicon Valley high tech companies have cafeterias for their employees, many with award winning chefs, that are open free to all employees. They book that as a cost of doing business, so it reduces their tax bill. Many municipalities have cafeterias that are lower priced than nearby restaurants. Those are large factors that reduce the number of customers that go to privately owned restaurants. To my knowledge, none of those high tech company cafeterias were closed down due to COVID.
As for the fact that Yale pays no taxes because it’s in the state Constitution, I say just amend the Constitution.
Regarding the benefits vs. costs of college and the large student loan debt in the US, my response is a question—what is your major? If you’re studying ethnic studies or women’s studies, or music, or art, just how did you expect to get a job with that degree on your resume? But it’s deeper than that. If you are not studying subjects that will get you a degree something high tech needs, why bother? AOC has a degree in economics, and she was a bartender with student loan debt and no job that required such a degree. Learn a trade. We are short of workers in the trades. What few manufacturing jobs are left in the US will all go to China if Biden wins in the Electoral College.
It is unfortunate you feel that way, but it is understood. Colleges became money machines, look at what they do with their student athletes. Make Millions from Football and Basketball, but the players get an education, or part of one, then that is it. They press students into money making majors, money making for them anyway.
I strongly believe that a college degree isn’t necessary to make a living. So many get degrees that don’t have a change of being useful on the job. I believe trade schools are a better option for skilled labor. Most high schools around here only teach how to make it in college. How many lawyers do we need, how many teachers. We need business majors so when they finish going to school, they can spend the money they make frugally. Most jobs we need can be taught by the retirees.
I don’t think college is worth the money you can spend. Most jobs can be self taught. How many lawyers do we need? You mostly settle rather than go to an expensive court trial. How many teachers do you need? I thought about going to college but I found I could taught to my fellow worker and learn enough to do the job. We need college degrees in business, engineering, but do these expensive colleges teach these?
I grew up 8 miles from Yale. Look at the neighborhoods as soon as you step off the campus. That ought to tell you everything you need to know about big gov’t and progressive, and wealthy Ivy League Universities that pay nothing, but want you to pay for their permanent gov’t stipend.
Here is one that is less obvious. As a freshmen, a curriculum is established for a four year path. But in the third or fourth year, they change it, forcing you to take an extra class or two. You either overload or have to go into your fifth year. Now you have room and board, employment disruption, etc. there should be a contract, but ; no. You want to graduate, you are forced to take those classes.
I had that exact experience. Right before I was supposed to graduate they changed the curriculum which would force me to take an entire other semester. I was one of the lucky ones who argued my way out of it.
When I see that some professors get paid $200-400K to teach a 3 credit hour course, I realize how much the taxpayers are basically used in this case as welfare for the rich elitists.
I was told you’ll get a better job just because you take 1 class compared to someone that doesn’t, biggest scam now it cost me 15,000 dollars
“After government increased subsidies, colleges raised tuition prices at four times the rate of inflation.”
Supply and demand. The laws of economics are as rigid and merciless as the law of gravity.
To call Yale a freeloader is , to me , hard to justify… When Yale is in session, the students and staff spend tons on food, clothing , apple store, entertainment venues,whatever. New haven is a great restaurant town largely because of Yale. Yale writes mortages for employees who live in town. They voluntarily give the city 13 mil. each year as a gift. They give free tuition to many students who don’t have the means. Two world class art galleries, natural history museum. If Yale puts up a building, the first floor is generally a commercial entity that is taxed. Plus they contribute to the atmosphere of the city. Lets not forget a world class hospital, and bio research that Yale fosters. Look at the hotels, apartment buildings, and new dorms being built.. (tax base, foot traffic commerce etc>) Lastly, for the city, the grass is greener (or bluer) on the Yale side of the fence. The city wants Yale $ to help pay for the profligate ways for decades. Lacking Yale, the city would be another Hartford or Bridgeport … take a look. David Holbrook , New Haven Ct.