Latest news with #universityfunding
Bloomberg
28-05-2025
- Business
- Bloomberg
Elite Colleges Go on $4 Billion Debt Spree After Trump Threats
By and Elizabeth Rembert Save Elite American universities have secured over $4 billion in additional debt since March that will help protect their finances as the Trump administration takes aim at their budgets. Harvard University, the face of the fight, has boosted its debt load 16% after a bond sale in April. The Massachusetts Institute of Technology just ramped up its liabilities 18% to $5.2 billion. Top-tier schools have sold taxable bonds, taken out private loans, and increased capacity for commercial paper, according to data compiled by Bloomberg.
Arab News
28-05-2025
- Business
- Arab News
US suspends student visa processing in fresh swipe at foreign applicants
CAMBRIDGE: The US State Department on Tuesday ordered the suspension of student visa processing, as President Donald Trump's administration seeks unprecedented control of the nation's universities by slashing funding and curbing international enrollment. It is the latest escalation in the White House's crackdown on foreign students, which has seen it revoke visas and deport some of those involved in protests against the war in Gaza. A cable signed by Secretary of State Marco Rubio and seen by AFP orders embassies and consulates not to allow 'any additional student or exchange visa... appointment capacity until further guidance is issued.' The government plans to ramp up vetting of the social media profiles of international applicants to US universities, the cable said. The New York Times reported that the suspension of interviews with visa applicants was temporary. Rubio earlier rescinded hundreds of visas and the Trump administration has moved to bar Harvard University from admitting non-Americans. Japan and Hong Kong have both urged local universities to accept foreign students from US universities in light of the crackdown. China's foreign ministry spokeswoman Mao Ning on Wednesday said Beijing urged Washington to 'safeguard the legitimate rights and interests of international students, including those from China.' Hundreds of thousands of Chinese students attend US universities, long viewed by many in China as beacons of academic freedom and rigour. The suspension of visa processing came as Harvard students protested on Tuesday after the government said it intended to cancel all remaining financial contracts, Trump's latest attempt to force the institution to submit to unprecedented oversight. A judge issued a restraining order pending a hearing on the matter scheduled for Thursday, the same day as the university's commencement graduation ceremony for which thousands of graduating students and their families had gathered in Cambridge, Massachusetts near Boston. The White House, meanwhile, doubled down in its offensive, saying that public money should go to vocational schools that train electricians and plumbers. 'The president is more interested in giving that taxpayer money to trade schools and programs and state schools where they are promoting American values, but most importantly, educating the next generation based on skills that we need in our economy and our society,' Karoline Leavitt said on Fox News Tuesday evening. 'We need more of those in our country, and less LGBTQ graduate majors from Harvard University.' Tuesday's protest unfolded as news helicopters hovered overhead and graduating students in academic attire and their guests ate finger food at a reception on the lawns of Harvard Square nearby. 'All my international friends and peers and professors and researchers are at risk and (are) threatened with being deported — or their option is to transfer' to another university, said Alice Goyer, who attended the protest wearing a black academic gown. One history of medicine student from Britain graduating this week who gave his name only as Jack said that the policies pursued by Trump would make US universities less attractive to international students. 'I don't know if I'd pursue a PhD here, six years is a long time,' he said. Harvard itself has filed extensive legal challenges against Trump's measures, which legal experts say are likely to be overturned by the courts. Separately, alumni plan to file a lawsuit against Trump on June 9, filmmaker Anurima Bhargava told a virtual meeting staged by Crimson Courage, a grassroots alumni group that held a mass webinar to raise awareness and a fighting fund from former students. The cutting of contracts announced Tuesday — estimated by US media to be worth $100 million — would mark the slashing of business ties between the government and the country's oldest university. Amid a broad campaign against seats of learning that Trump accuses of being hotbeds of liberal bias and anti-Semitism, the president has singled out Harvard. In the last few weeks, the elite educational and research powerhouse has seen billions of dollars in federal grants frozen and millions of dollars of federal contracts torn up. The university has sued both to block the revocation of its right to recruit and sponsor foreign students, 27 percent of its total roll, as well as to overturn the withdrawal of federal funding. A legal expert suggested Harvard could file a lawsuit to overturn the latest contract cuts as part of existing legal action. 'The case is so strong that the court system is not going to step to the side and allow this... to go forward,' said Albany Law School professor Ray Brescia. He said the Trump administration's assault on Harvard was so flawed that a higher court would likely strike down the campaign if the Trump administration were to challenge it on appeal. On Monday, Trump nonetheless vowed he would prevail in the increasingly public struggle, claiming that foreign students at Harvard include 'radicalized lunatics, troublemakers.' gw-bur/cms/sco
South China Morning Post
25-05-2025
- Business
- South China Morning Post
Why is Hong Kong scrimping on schools and splurging on elections?
The government took the machete to university funding in February, not only by announcing an expected 2 per cent cut over the next three years during the budget speech, but also with the University Grants Committee dropping the bombshell that the eight public universities would have to return HK$4 billion (US$510.7 million) from their reserves. How the government means to realise its ambition of developing Hong Kong as an international hub for post-secondary education while cutting finding remains a mystery; we can only have faith that the universities will figure out how to make ends meet. Given the government's fiscal resolve towards tertiary education, however, it should come as no surprise that it has no qualms about slashing a major grant to public primary and secondary schools too. Last week, Education Bureau officials met school representatives to propose a 10 per cent cut in the Expanded Operating Expenses Block Grant. Furthermore, schools under the direct subsidy scheme, which are considered semi-private, could face a 2 per cent funding reduction. Taking into consideration other recent developments, the government is putting serious heat on schools. Even with the encouraging news of the inflow of new students , members of families that have settled in Hong Kong via various talent schemes, schools might have to fight to survive.
New York Times
23-05-2025
- Business
- New York Times
Republicans Harness Tax Code to Punish Trump's Political Nemeses
President Trump already has the weight of the executive branch behind his efforts to strip funding from top universities, deport millions of unauthorized migrants and pressure foreign governments to change their economic policies. With the sprawling bill that passed through the House on Thursday, Republicans are also preparing to enlist the tax code as another tool against Mr. Trump's political foils. The legislation, which could change as it heads to the Senate, would raise taxes on universities like Harvard, as well as on immigrants and on companies based in countries with taxes that the Trump administration deems unfair. Owners of major sports franchises, a group that Mr. Trump repeatedly tried and failed to join, would also see a tax increase. 'If you're an ideological friend of Trump, you're in generally good shape,' said William Gale, a co-director of the Tax Policy Center, a think tank. 'If you're an ideological foe, you pay more.' The increases, he added, 'feel very punitive.' Those increases would go toward covering some of the cost of what is otherwise a broad tax cut. But in some cases, the amount of additional revenue the government would derive is relatively minor, while the effect on those targeted with a tax increase could be significant. Consider Mr. Trump's feud with Harvard. His administration has choked off federal funding for the wealthy university because the school has not agreed to demands for overhauling campus practices. As part of the fight, Mr. Trump has also called for the Internal Revenue Service to revoke Harvard's tax-exempt status, a step that could raise taxes on the school but that faces a number of legal complications. The legislation would go a long way toward raising Harvard's taxes without stripping it of its tax-exempt status. That is because it would substantially raise an existing 1.4 percent tax that Harvard and other wealthy schools face on the investment returns generated by their endowments. Under a tiered system created in the bill, Harvard would face a 21 percent rate on those earnings, an increase that could cost the school an additional $800 million in taxes each year, according to an analysis by Phillip Levine, an economist at Wellesley College. While the tax would represent a huge new cost for Harvard and other affected schools, it would raise less than $7 billion in government revenue over 10 years — a pittance compared with the trillions in tax cuts otherwise included in the bill. (Likewise, new limitations on sports owners' ability to deduct the value of their teams over time would net under $1 billion over a decade.) Ted Mitchell, the president of the American Council on Education, called the endowment tax increase 'wrongheaded and irresponsible.' In a statement, Representative Jason Smith, a Missouri Republican who leads the Ways and Means Committee, framed the tax increase not as a matter of fiscal prudence but as a way to 'end insane woke ideology.' Other tax increases, like rolling back tax incentives for clean energy companies, would raise serious money. A measure that would retaliate against countries that moved ahead with certain taxes on large American companies could generate $116 billion over 10 years, according to the Joint Committee on Taxation. That could further fuel ongoing disputes with Canada and the European Union, which have already been hit with Mr. Trump's tariffs. Even with those tax increases and cuts to spending on programs like Medicaid, the legislation is expected to add substantially to the debt. Early estimates put the cost at roughly $2.5 trillion over the next decade, though scorekeepers are still evaluating its cost. That is a reflection of the huge cost of Republicans' main priorities for the bill: locking in lower tax rates they first passed in 2017, as well as Mr. Trump's campaign promises to not tax tips or overtime. Another priority for the Trump administration has been to reduce the number of migrants in the United States, including by trying to scare people in the country illegally into leaving. The bill would take that campaign a step further, cutting off tax benefits to some immigrants in the country legally, as well as American citizens who may live with undocumented migrants. Currently, under rules that Republicans themselves created in 2017, the child tax credit is available to any family with American children — even if the parent is in the country illegally and does not have a Social Security number. Under the new legislation, Republicans would require both parents to have a Social Security number to claim the credit. That change could result in two million fewer children receiving the benefit next year, according to a congressional estimate. The legislation would also deny tax credits that help cover the cost of health insurance to some migrants who are in the country legally. And it would impose a new 3.5 percent tax on the remittance payments migrants send to their families overseas. 'They're saying they're taking away these benefits from illegal immigrants, but this section solely deals with lawfully present people who are paying taxes into the system and now are going to be denied those benefits,' Representative Linda Sánchez, a California Democrat, said. One of the tax breaks in the bill would, in Mr. Trump's view, in fact reward the president's political opponents. During last year's presidential campaign, Mr. Trump called for an increase to the state and local tax deduction, capped at $10,000 under his 2017 tax law, a proposal that delighted Republicans in New York and New Jersey who have long pushed to make the tax break bigger. But as those Republicans held out on supporting the bill, Mr. Trump changed his tune about the deduction. Speaking on Capitol Hill on Wednesday, he said raising the $10,000 cap would only benefit Democrats, and criticized two of them: Gov. Gavin Newsom of California and Gov. JB Pritzker of Illinois. 'Those are the people that want this. And they're Democrat states; they're all Democrat states,' he said, suggesting the cap should be unchanged. 'I think we're going to be explaining that.' Ultimately, the House passed a significant increase in the deduction, raising the limit to $40,000.
Yahoo
17-05-2025
- Business
- Yahoo
Opinion - Let the colleges fail
The U.S. is known for having both exceptional private business enterprises. It is the prime mover in creating the most powerful and bountiful economy in history and also for having great colleges and universities. Its schools dominate world college rankings and draw students from throughout the world. Yet American universities are facing a dramatic decline in public support. This is manifested in lower enrollments today than a dozen years ago and widespread threats to their funding, as both the Trump administration (via threats to revoke tax exemptions, reduced research support, etc.) and Congress pose what some college leaders deem existential threats to their very existence. Additionally, some state governments are beginning to sharply increase their intervention into the affairs of public universities that have historically exercised a great deal of independence. A major reason corporations are faring far better than universities in today's public policy milieu can be explained by one word: ownership. Everyone knows who owns and controls the operations of American companies, but who 'owns' or controls our universities? We all know that Elon Musk makes the key decisions at SpaceX and Tesla, but who does so at elite universities like Harvard or Stanford, or even at distinctly less selective and prestigious schools, such as Ball State University in Indiana or the University of District Columbia? Who owns or 'runs' Harvard? Is its president, Alan Garber, truly the 'CEO?' Is the controlling authority the governing board — or in Harvard's case, one of the two governing boards? Is it the faculty, whose presence is absolutely essential to carrying out the dominantly important institutional functions of discovering and disseminating knowledge? Is it a vast and ever-growing bureaucracy that constitutes the administrative bloat raising university costs and diluting the emphasis on the primary academic functions? Is it the students whose presence, like the faculty, is the whole point of higher learning? Is it rich alumni, like Johns Hopkins' Michael Bloomberg or the University of Oregon's Phil Knight, whose multi-billion dollar contributions are critically important to the future of those institutions? Are any of these the 'owners' in any sense? Or, are universities often better viewed as confederations of various largely autonomous fiefdoms that pay allegiance and some funds to a central administration, very much like feudal lords in the Middle Ages nominally recognized a distant king to whom they paid some feudal dues? Using Harvard as an example, does the Harvard Business School pay a tax out of its tuition and endowment revenues to President Garber across the Charles River, mainly so that it can continue to use the prestigious name 'Harvard?' And what of others using the Harvard moniker — Harvard Law School, Harvard College (undergraduate school), the Kennedy School of Government, etc.? This brings us to another term explaining the difference between the relative efficiency of colleges and American business: incentives. In American business, major errors in decision-making can literally be either a death sentence or being put on life support, but success provides owners and CEOs with vast wealth. In contrast, a successful college president might get a bonus of $100,000, although his or her head football coach, effectively running a business in a highly competitive market environment, might get a salary vastly dwarfing that of his nominal university president boss. The great Austrian-American economist Joseph Schumpeter said that capitalism thrives on 'creative destruction,' whereby failing company resources are ultimately absorbed by newer successful enterprises better serving changing consumer tastes or more adroitly responding to new technology. In higher education, if you make a big mistake, you might not get an annual raise; in business, a big mistake very likely will cost you your job. In my new book, I argue that the dulling of incentives and ambiguity of ownership have contributed to the recent decline in support for our universities. Fortunately, the incentive system of markets, while heavily diluted by governmental and philanthropic subsidies, are still somewhat present in higher education, and the threat of severe retrenchment or even closure hopefully will lead to needed reforms as more colleges realize their very existence is imperiled. Richard Vedder is the author of 'Let Colleges Fail: The Power of Creative Destruction in Higher Education.' He is also a distinguished professor emeritus in economics at Ohio University and a senior fellow at the Independent Institute. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
