Why can't Ivies cope with losing a few hundred million?
194 comments
·April 30, 2025Kapura
This framing conveniently ignores the question of whether the president should have the authority to single-handedly withhold funding for universities, broadly considered to be one of the foundational pillars of America's strength in the 20th century. While I think it's interesting and answers the specific question it raises, it's wild that the economist has just accepted that the president has dictatorial powers.
_cs2017_
"Conveniently" is the wrong word to use here. "Conveniently ignores" implies that the author intentionally disregarded some known facts to make their argument look more persuasive. However, this is not the case here. The article's argument is that a reduction in government funding is very damaging even when it is small relative to the endowment size. This argument would not lose any of its power if the author covered the topic of whether the president has the power to withdraw funding.
(On a side note, the word "framing" is also the wrong word to use.)
One way to phrase your message correctly would be: "This article is about the impact of the president's decision, but I wish it also talked about whether the president has the authority to make that decision in the first place".
xracy
There's a reason that court cases typically address standing before addressing the underlying question. It matters much more that you're taking on a case before you determine the case on the merits. If the case doesn't have standing it is not worth considering.
"Conveniently Ignoring" the standing question is frankly an admission of compliance to something that is not the law. Who cares "why people can't live without food" if someone is saying "let's starve the population." One question isn't worth platforming while the other is on the table.
physPop
This isn't law, its journalism, and frankly the article is well written and asks a good question -- why are these (extremely wealthy) universities finances so brittle?
snickerbockers
America is a democracy, not a bureaucracy. The executive branch is governed by a single representative elected by the people. It is becoming increasingly apparent that the people didn't make a great choice this time but our constitutional republic is also one of the foundational pillars of american strength and trump being an idiot doesn't change that.
The judicial branch has authority to stop him but they're only supposed to use it if they are convinced that what he's doing is unconstitutional. Some of the executive branch's appointee's have authority over him but only in specific circumstances (such as 25th amendment) and they're usually in agreement with him since he gets to appoint them anyways. Otherwise, all authority in the executive branch effectively belongs to the president and random midlevel bureaucrats can only exercise it on his behalf.
otterley
This is true only to the extent that Congress delegates its power to the executive. Per Article I of the Constitution, Congress has the plenary power of the purse.
So if it decides to spend $X on something specific, it has to be spent on whatever that something is. The President doesn't have discretion in that case.
NoMoreNicksLeft
>This is true only to the extent that Congress delegates its power to the executive.
Directly or indirectly the people of the United States have power over all three branches. One can easily make strong arguments that the problem here is both that Congress as abdicated its powers to the executive (rather than delegated), and that the people have ignored that Congress should retain those powers while focusing on the presidency as the important election to the exclusion of all others.
This has been going on for decades or longer.
>So if it decides to spend $X on something specific, it has to be spent on whatever that something is. The President doesn't have discretion in that case.
Sure. Definitely means he can't spend it on something else. But how much wiggle room is in this? Does it say on which day, hour, and minute it must be spent? Sure, it's probably tied at least to the fiscal year (in which case it needs to be spent by September, one would suppose), but that's months away. Does allocating a budget imply that it needs to be spent at all? If some bureau or department fails to spend all of its budget, has the president somehow committed some treason-adjacent crime, or is that just thriftiness? Are these funds earmarked for specific universities? What if he just goes shopping for alternative recipients?
To say that he has no discretion at all is absurd, if that were the case then Congress would have mandated that these be automatic electronic bank transfers without any human intervention (or oversight). The nature of the job not only implies but practically demands some (if limited) discretion.
ok_dad
In fact, when Congress passes a budget, it’s actually a law that must be executed by the executive. There are actually other laws against impoundment and against the executive changing the budget.
Trump is literally breaking the law but no one really cares to discuss that anymore since the gish gallop has be so quick this term.
UncleMeat
> The judicial branch has authority to stop him but they're only supposed to use it if they are convinced that what he's doing is unconstitutional.
This is not true. They can also stop him if what he is doing is illegal. Statute can absolutely constrain the executive.
boothby
> Statute can absolutely constrain the executive.
This is an open question. The judicial branch has authority, on paper. But without means of enforcing that authority, it cannot truly constrain the executive.
mmooss
> The judicial branch has authority to stop him but they're only supposed to use it if they are convinced that what he's doing is unconstitutional.
That omits a crucial issue that many amazingly overlook: The bar isn't constitutional but legal. Congress makes the laws, not the President. The President is bound by those laws, and in fact their job is to enforce the laws that Congress makes. They cannot do things unless empowered by the law.
epistasis
If a presidential candidate promises to break the law in his campaign, that does not give him the authority to break the law. We are a constitutional republic and the constitution must be followed.
It's quite clear that the current President does not give a damn about the constitution, know anything about it, or have any compunction about blatant violation of the constitution.
> Otherwise, all authority in the executive branch effectively belongs to the president and random midlevel bureaucrats can only exercise it on his behalf.
This is factually wrong.
mmooss
> We are a constitutional republic and the constitution must be followed.
Also the law must be followed.
jimbokun
> If a presidential candidate promises to break the law in his campaign, that does not give him the authority to break the law.
The Supreme Court ruled otherwise.
nine_k
This is a fair question, but it's being asked a lot already.
Let's imagine that completely legitimate circumstances lead to the US Government stopping the stream of grants to the Ivy League universities. How would they cope, given their enormous endowments that generate significant interest? This question is asked much less, and the answer is much less obvious. Hence the value of TFA.
xracy
What is "a lot"? The question is pertinent.
Additionally, the follow-on questions are irrelevant. There are a million better questions to ask on the other side of this as well, before we ask why someone can't live without the money that they've been acquiring entirely above board and legally. "Why does the gov't think it has the authority to do this?"
Why do we need to have theoretical debates about legitimate circumstances, when there are real debates about illegitimate circumstances happening? having this irrelevant follow-on discussion is doing the gov't's work for them.
In a different setting I can see asking this question, but there is no need to ask this question while the circumstances are clearly illegitimate.
SpicyLemonZest
What's the point of such an abstract question? The university's goals and expected resolution for the problem would always depend critically on why the stream of grants stopped.
aoanevdus
When a large institution is faced with uncertainty about the future, it’s both feasible and prudent to make plans that account for multiple future outcomes. In this case, it makes sense to do both of the following:
1) Fight the administration in the legal system.
2) Plan for the case where some of those legal fights are lost.
codexb
At some level, someone needs to have discretion on which grants to award and not award. You can call it "dictatorial", but I don't see how it's any less dictatorial if the decision-maker is some faceless, unaccountable bureaucrat vs a President that is accountable to voters. Surely, grants were being denied before for other reasons.
lesuorac
Do you honestly think Trump is individually reviewing grants?
Trump with help of various groups makes political appointees who either individually oversee grant reviews or administrate individuals that do. These people are just as faceless and unaccountable as with any other president ...
The difference here is that Congress who is much more accountable to voters deliberated and wrote laws authorizing various funding which is being completely overridden by the branch of government that is supposed to carry out the law.
NoMoreNicksLeft
>Surely, grants were being denied before for other reasons.
Were they being denied? It might well be the case that grants were never denied except when the grant spigot ran dry waiting for the next year. I don't necessarily believe that is the case, but is there some evidence that it doesn't work like that?
wahern
Process matters, everything else is to a first approximation merely platitudes. What's the difference between faceless bureaucrats making these decisions vs the president? It's the difference between rule of law vs dictatorship. Faceless bureaucrats have to follow policy defined by Congress and the President. If the person making the policy is the same person making the decision, and especially when the "policy" is whatever their fancy is, that's not rule of law. America was founded on the principle, "a government of law, not of men".
Moreover, faceless bureaucrats risk criminal and financial punishments for things like self-dealing. The president faces no such risk. And when they're a lame duck, they (theoretically) face zero risk, period.
Bureaucracies are slow. They're costly. Like democracy generally, they're inefficient. They're worthwhile because, at least as far as government is concerned, they're a necessary element to maintain rule of law and avoiding dictatorship. The solution to government bureaucracy isn't to remove the bureaucracy, it's to remove the government involvement. Otherwise, you're just inviting dictatorship. This has happened countless times. When the people get upset about perceived government ineffectiveness and its democratic institutions are too slow to respond (e.g. gridlocked Congress), there are two routes: privatization (i.e. reducing the role of government, not merely something like syndicalism) or dictatorship.
What's the difference between Donald Trump's rise to power and approach to governance, versus Huge Chavez's? Not much. The parallels are amazing. Both came to power promising radical overhauls of perceived sclerotic institutions, including broken legislatures. Like Trump, Chavez was a media whore who spent most of his time talking on television, making impossible promises and blaming everyone and everything else for his own failures. (Castro was like this, too.) They both spout so much B.S. that most people can't even keep up; they just start taking them at their word, which is why Chavez was popular until the day he died. His successor has zero charisma; the policies haven't changed, but now people hate the exact same kind of government they had during Chavez, but have no power to change it. That's what happens when you choose government of men rather than government of law.
freejazz
It is dictatorial, not because one person gets to make the decision, but because the US constitution delineates the powers of the gov't, to which the President does not have this power. I really do not understand why this is such a hard concept for many people here to grasp. The separation of powers is such a fundamental aspect of our government that I am astounded to see you miss this point. When any one branch usurps the power of another branch it is the *EXACT* kind of tyranny the constitution was created to avoid.
codexb
What was happening before this year? Surely, congress was not the one approving and awarding these grants. It was a member of the executive agency. Trump didn't declare any power that wasn't already being exercised by the executive.
DrillShopper
> At some level, someone needs to have discretion on which grants to award and not award
Then that person should not be a politician or political appointee who judges on the merits and not on the votes it will bring.
prasadjoglekar
If the funds are disbursed from the public Treasury, it is very much a political decision. You can put some intermediary bureaucrats to create a face of objectivity, but it's a political decision at it's core.
aag
The Economist has articles on that subject already. They do their homework. Here's just one:
https://www.economist.com/united-states/2025/04/24/who-will-...
xracy
You don't go and decide a case on the merits when you've thrown it out on standing.
Addressing the other question is a pre-requisite to considering the one included in this piece. And given that they are ignoring the presumable answer to the other question, they have not justified the existence of this article.
throwawaymaths
if you want to go that way, you're conveniently ignoring if congress should have the authority to allocate funds to nonprofits that aren't part of the government under the enumerated uses in article I section 8.
freejazz
In what way is what you raised a genuine question of constitutional law?
ahmeneeroe-v2
Why are you citing the these institutions' contribution to the 20th century? We are 25 years past the 20th century, 35 years since the end of the Cold War (which was the spiritual end of the 20th century).
What have these elite institutions contributed to the 1990+ world order?
amanaplanacanal
Tons of research in the sciences, including medicine.
catapart
Yeeep. This is the only thing worth knowing about this whole mess. The people trust their reps to handle the money, and the reps are the only people who are supposed to be able to manage that money.
Yet here we have tacit acceptance that the president can fuck with citizens' money just because he's in his feels about something. Absolute clownery.
ssalazar
This author presumably understands but buries the lede that for an endowment of $15 billion a university would typically only spend 5%, or $750 million, annually. So "a mere $400m" is over half of the annual funds from the endowment (not including tuition income and donations) that might be available to a university with such an endowment.
It should be relatively obvious that spending into the principal of an endowment is not a sustainable practice over the long-term for universities that are operating at the scale of centuries.
steveBK123
I am not a fan of the orange man.
But I think its an interesting question if the feds should be funding rich Ivies with small numbers of students vs more efficient state universities which educated 100s of thousands each at a fraction of the cost per student.
All of the Ivy League combined educate 65k undergrads. SUNY by comparison educates 5x that many at a tuition of 1/5th to 1/10th depending on in/out of state and community vs vs 4 year college.
Obviously what he is doing is punitive. BUT, I think the constant focus in the press on the Ivys when we talk about education is a huge distraction from how we are actually going to improve access, quality & cost to education in this county.
mattlutze
Too many people think these are funds to just run the universities. By and large, what is being withheld are funds for research.
Federally-funded academic science often looks like:
1. The university + government fund/run a project
2. Project creates new knowledge (cool!)
3. The government gets a pretty awesome license to use that knowledge
4. The government more often than not gives that knowledge away (or offers great accessible licensing), so that
5. Private industry can adapt, apply and commercialize the knowledge, driving new GDP growth and opportunities for improving life, etc.
lowercased
It's that last step - 5 - which I think is a missing piece of the discussion. A lot of private company pharma and medical research is often doing the 'last mile' work that started in university research programs. Stuff that looks promising is picked up and commercialized, but there's usually significant work the research people have done before big commercial players take it to market. They're not doing all their research from scratch - they're taking the best bits funded by our government research programs and bringing them to market. Cutting university research will damage the private sector pretty quickly.
ajmurmann
It even goes beyond the concrete research that eventually gets commercialized. One pharma startup I am familiar with has much of its research-related leadership and board staffed with very successful current or former academic researchers who used to run their own labs or even departments. We cannot shift skill acquisition like that over night to private industry.
sampo
> By and large, what is being withheld are funds for research.
I don't know precisely, but I would assume the universities take about 50% to 60% of the granted research funding as administrative overhead, and only what remains goes to the actual research.
treis
This is somewhat disingenuous. Something like half of the grant is handed over to the University as overhead. Much of that is legit to cover things like labs but a lot of it goes to a cover a massive amount of administrative bloat.
Also, nobody really objects to the research that leads directly to stuff private industry can use. That's not what people want to cut.
xracy
The overhead is what makes research possible. How do you do research without a lab, or a building?
eastbound
I object to the research. Not in the theory, but in practice, there is so much influence from those researchers’ political opinion over what they find (and who they engage to find it) that we’ll have to work for decades to remove the bias from the studies.
For example, biology researchers haven’t yet called out the gender studies as not being a science (in the sense of the scientific process). How can you say research is reliable when it can’t separate the good from the bad?
Every other discipline refuses to denounce and call out sectors which aren’t scientific. They are not scientists if they cannot clearly spell out the good from the bad science. Worse, they’re most probably a majority to agree with this false science.
ss2003
That is disingenuous. People absolutely want to cut all University research without regard as to what it for.
timewizard
On #3 "government gets a pretty awesome license" seems disingenuous. From what I've witnessed some specific agencies get to use that license in a rather limited way. It's often not broadly available to the public and commercial rights tend to be reserved to the University. Is that actually what most people would think of as "pretty awesome?"
On #4, "more often than not" and "offers great accessible licensing" seems equally disingenuous. Further, why should any of us have to license technology or patents that were primarily funded by tax revenue? Shouldn't that just be automatically and fully open? When the government decides to sequester that knowledge what process do I have to challenge that?
On #5, outside of pharmaceutical companies, what are these new GDP growth and returning pipelines that actually get created and impact citizens directly?
trollbridge
Yeah, my experience is the patent gets licenced to some private entity that then squeezes a profit of it. The public sure doesn’t “benefit”.
I’d prefer to see such funding going to state universities, not private ones.
Kon-Peki
> Ivies with small numbers of students vs more efficient state universities… all of the Ivy League combined educate 65k undergrads.
Why ignore grad students?
Harvard confers 10-11k degrees every year, which places it squarely in the same league as State U. That’s less than a school like Ohio State, but more than Kansas or Colorado Boulder, for example. Your average state university is somewhere in the 12-15k per year range.
dragonwriter
> But I think its an interesting question if the feds should be funding rich Ivies with small numbers of students vs more efficient state universities which educated 100s of thousands each at a fraction of the cost per student.
The funding at issue is research funding, not educational funding, and it goes to both kinds of universities (vastly more, in aggregate, to state universities than Ivies.)
> Obviously what he is doing is punitive. BUT, I think the constant focus in the press on the Ivys when we talk about education is a huge distraction from how we are actually going to improve access, quality & cost to education in this county.
If research funding is used as a lever to establish political control, those things literally do not matter, since whatever universities survive will simply be tools of totalitarian indoctrination by the regime.
umanwizard
The feds aren’t funding ivies for the purpose of education, they’re funding researchers who happen to work at the ivies to do research.
steveBK123
Multiple people pointing this out, and absolutely right.
Some question though of how all the research grants do kind of cross-subsidize the education in a way as it pays for research professors, their graduate staff, etc? Otherwise why do we collocate research and teaching?
jasonhong
This was recently discussed on Hacker News about two weeks ago.
See this blog post by Steve Blank talking about the rise of research universities and why the USA is a science powerhouse. https://steveblank.com/2025/04/15/how-the-u-s-became-a-scien...
And the discussion on HN: https://news.ycombinator.com/item?id=43692360
Also, pragmatically, it's a system that has yielded incredible ROI since WW2, in terms of new industries, new companies, jobs, science, economic gains, productivity gains, and national security. The US university system is the envy of the entire world, and it's being targeted for dismantling by very petty, cruel, and incompetent people.
nine_k
> why do we collocate research and teaching?
Because we want the same scientists who do, or recently did, advanced research to teach students? Because we want students to be involved in actual real genuine cutting-edge research? I suppose this is the logic.
As a student back in the day I worked in a university lab, and it was pretty interesting to play a role in solving problems that don't have answers in the end of a textbook.
onepointsixC
We did so because having all laboratories be government run was inefficient so in WW2 we decided to split the costs with private and public universities who will maintain labs, equipment, and the federal government will pay directly for the research.
foobiekr
"Otherwise why do we collocate research and teaching?"
Because you need a second generation of researchers.
cg5280
Many of the "good" universities in general seem more focused on prestige and acceptance rates than they do educating the masses. The Ivies could significantly expand the sizes of their student bodies (and to their credit they do make some content accessible online), but they don't because a lot of the value of a Harvard education is the exclusivity and the social network it gets you into.
lenerdenator
And therein lies why a lot of Trump's base has a massive problem with them.
To be fair, the exclusive social network very much includes Trump, but it spent most of the last 50 years bringing itself capital at the expense of Trump's base.
mmooss
Universities have two roles: education and research. The funding is overwhelmingly for research and it's going to those that provide the best return on investment. Should cancer research funding go to your local community college?
Educating the best and brightest is also of special value, but that is beside the point.
physPop
I disagree -- the funding isn't ROI based at all. Heck NIH doesn't even really audit how well the funds were spent, how could they? They don't even really assess if the research had impact, save for counting journal articles and impact factors, which are in themselves poor proxies for quality of work (and easily gamed).
mmooss
What makes you say all that? Grants are hard to get, highly competitive with difficult standards.
onepointsixC
The feds are funding research, which elite schools have the best faculty and scholars who are conducting the very best research. May as well as why are VC’s funding promising startups instead of less promising ones, when those promising ones have already wealthy founders who have exited their previous venture.
jccalhoun
It isn't about that efficiency. I teach at a community college and my state's republican supermajority just cut our budget by 10%.
steveBK123
Oh absolutely agreed, the GOP is anti-education however you slice it.
In a less partisan world, it would be nice to see a version of this that was more about efficient allocation of education dollars rather than an attack on education.
strangeloops85
Public schools in the US get a relatively small fraction of their budget from state funding. The distinction between public and private is not as large or substantial as one might imagine.
For example the 10-campus UC system's total budget is $54 billion of which $4.6 billion comes directly from the state's general fund. https://lao.ca.gov/Publications/Report/4998 - the federal funding here is the same as for private universities, to do research or other work in the form of contracts/ grants.
niemandhier
Göttingen and Berlin were arguably the best universities in the world in 1930.
They were not in 1940.
WorkerBee28474
When a university loses its Jews it is in for a bad time. That's one of many reasons why the watermelon crowd should not rule a campus.
pjc50
"Free speech" is when the President unilaterally withholds research grants from universities, based on statements made by students (not faculty)?
ty6853
This is the double edge sword of moving away from voluntary transaction in the market and towards government-imposed funding. The government takes away your ability to choose what to fund, holds the purse, then smacks the purse at you filled with the weight of your own money.
freeone3000
The government, with laws as written, has more restrictions on when it can pull money than private parties, due to its legal obligation to be content-of-speech-neutral. We are discovering that United Stares law is meaningless.
umanwizard
Law everywhere is meaningless unless “we have to follow the law” is a cultural norm. This is why norms are more fundamental and more important than laws.
ty6853
You are discovering this. It wasn't that long ago when the national guard took tuition money away from Kent State in the form of executing their students for free speech.
timewizard
Federal law is insanely complex. It's written by humans in an abstract legislative process so there's not even a guarantee that it won't conflict with _itself_. We have, several times, added laws to the register that were later determined to be in conflict with the Constitution itself.
This is why courts exist.
This is also why libertarians exist.
scottiebarnes
I'm not sure this is a "free market choices" problem. Some institutions like education should be funded by government, in part or in whole.
The government threatening to take away that funding based on "taste" is more of a problem of authoritarianism.
boplicity
To be clear: It's not as simple as funding for these schools being taken away.
What's being threatened is funding for research being done at these schools. That's a huge difference.
arduanika
It's not as simple as that, either. Every research grant comes with an "overhead" charge on top that goes to the university admin, which can be something like 60%.
https://www.dailysignal.com/2025/02/10/lies-damn-lies-and-un...
And moreover, it's not just the research grants that are being threatened, as seen in TFA. There's also the massive subsidy in the form of tax exemption. No other hedge funds receive that kind of preferred tax treatment. Only universities.
boplicity
So I have a rare disease. The only treatment is surgery. However, there is an ongoing study on a promising treatment at an elite university for a very effective and simple drug-based treatment. That type of research funding is absolutely being threatened. So, yes, it really is that simple.
If only Trump were trying to force universities to be more efficient with their spending. However, both of us clearly know that is not what is going on here.
aianus
Does the admin of the school get any of this money today or is it entirely allocated to the individual researchers?
2cynykyl
Yes, about half is skimmed off the top by the university, called 'overhead'. This is used to fund everything, from research-essential things like paying for heat and maintaining buildings, to less obvious but still research-essential things like IP lawyers to deal with contracts and campus security. However, SOME of the overhead will end up supporting things that are 'contentious' like DEI enforcement or whatever.
mathgradthrow
They might also be happy for an excuse to implement some of these policies and have the administration as scapegoat.
steveBK123
Yes some of them have said as much...
linguistbreaker
The POTUS should not have this authority obviously, BUT
As "Ivies" grew their endowments at hundreds of percent faster than their student bodies, they became essentially hedge funds that do some education.
xnx
I keep seeing this presented as if the money were being given away, but isn't it more accurate to describe it as payment for services (e.g. access to research facilities)?
null
See https://archive.ph/GkGWE