NEW YORK, Dec. 25 (Xinhua) -- U.S. elite universities are facing money problems partly of their own creation, while public and especially smaller private colleges and universities are cutting staff and programs. Many are closing outright, The Wall Street Journal (WSJ) has reported.
"A school like Harvard, now well into its fourth century, will almost certainly survive for a fifth one. But there are financial problems below the surface that could emerge if the bull market stumbles and especially if some proposed Trump administration policies are enacted," noted the report.
Veteran investment consultant Richard Ennis wrote this month that high costs and "outdated perceptions of superiority" have stymied Ivy League endowment returns, which could have been worth 20 percent more since the 2008 financial crisis if invested in a classic stock and bond mix.
Two Donald Trump administration policies could further weigh on Ivies' finances. One is a 1.4 percent tax on income levied as part of the 2017 Tax Cuts and Jobs Act on endowments larger than 500,000 U.S. dollars per student at schools with more than 500 students. A few dozen schools have had to pay it and there is talk of increasing the levy.
Far costlier would be rhetoric or visa rules that make it harder or less attractive for foreign students to attend U.S. universities. Foreign students on average receive much less assistance and therefore indirectly subsidize aid to domestic students. Their enrollment took a hit during Trump's first term, according to the report.
