“Today, these ‘educational’ non-profits are more federal contractor than they are educator,” the organization says in its report. The cash influx has come in the form of federal payments on contracts, grants, and special tax treatment of their endowments. “Their $33 billion in federal contracts and grants outpaced their collection of undergraduate student tuition,” the report says. Additionally, the schools gained another $12 billion in special tax treatment benefits on the growth of their endowment gains, which totaled $237 billion in 2022 — a $65 billion increase from 2018. The universities received even more benefits and subsidies not accounted for in this study, including billions of dollars in benefits from state and local sources. Most of the funds (roughly $29 billion) were provided through federal grants — which are giveaways where the recipient university owns the work product and can profit directly from the resulting intellectual property — unlike contracts, where the government owns the output. The analysis found that the universities benefitted roughly the same under both the Trump and Biden administrations. During the last three years of the Trump administration, wealthy universities received between $6.4 billion and $6.7 billion annually. In the first two years of the Biden administration, the colleges received between $6.7 billion and $6.9 billion. There has been much controversy over billions of dollars in subsidies going to U.S. universities, as the report explains, given “many of these schools have received attention for left-wing agitation and advocacy from students and administrators alike in the past five years,” including recent “responses to the October 7th attacks on Israel by the Hamas terror group.” Additionally, there have been objections over large sums of money going to what some call “frivolous” projects and areas of study, including:Wealthy Ivy League universities have received $45 billion from the federal government over the past five years, according to an audit by watchdog organization Open the Books.
As Open the Books details, policymakers and U.S. citizens are now asking whether college and universities are operating in the public interest or their own special interest.
