Princeton's Endowment might be Taxed More

The Princeton U. magazine for alumni reports:

It sounds preposterous.

President Christopher Eisgruber ’83 warned in his annual State of the University letter in January that absent additional fundraising and income from investments, if Princeton University keeps spending 5% or more each year from its $34.1 billion endowment — which is its customary practice — it “will be gone in 20 years or less.”

Unless the world turns upside down, that is not actually going to happen. Princeton will keep fundraising and the endowment should keep producing returns, if not at the almost 10% a year rate of the past two decades. At the same time, the University will keep tapping the endowment, as it did this fiscal year for $1.7 billion as part of its $3.1 billion operating budget, which covers everything from student aid and faculty salaries to opening new labs and mowing the lawns.

It goes on to say that PU pays 1.4% tax on its investment earnings, and warns ominously that the rate could go up. One proposal is to tax university endowments like corporations.

PU has an endowment of $4 million per student, and so it is earning $400,000 per student. It brags about price discrimination, as if that were a good thing.

More than 70% of the financial aid Princeton provides comes from the endowment, according to the University. While tuition this year is $62,400 and room and board $20,250 on top of that, 62% of all undergraduates and 71% of first-year students receive financial aid. Most families with incomes up to $100,000 pay nothing, which Levine says makes Princeton “one of the cheapest schools in the country.”

PU has all the diseases plaguing other American colleges. Woke policies, DEI, discriminatory admissions, leftist Trump-hating faculty, no free speech, bloated administration, etc.