Higher education tuitions, endowments, tax subsidies, the end of the American baby boomlet in university admissions, and the long term question of foreign student admissions

Note:  Looking at the comments, I want to clarify two things.  First, the concerns I raise below address the obligations of universities and how they should deal with being part of a particular political and social community.  It is not about individuals who apply to schools as such, whether from the US or anywhere else.  If I were a student abroad, had the money and the possibilities, I would certainly want to seriously consider coming to the US for study - in part because its universities are better than those in most other places, in part because the credential is often worth more, and in part because, should I wind up staying, the opportunities created are better.  The question in the post below is not whether individuals should seek admission; the question is rather whether universities as US institutions have an obligation to the US as a social and political community to consider US applicants and foreign applicants differently.  Second, this post is entirely about undergraduate education.  Graduate education and graduate education funding raise very, very different issues from those related to undergraduate admissions, and I do not address them below.

(Thanks Glenn for the Instalanche and welcome, Instapunditeers!)

I'm not posting much, for reasons stated a few posts ago, but I wanted to put up here a note I sent to Glenn Reynolds of the redoubtable Instapundit - Glenn has been tracking the discussion over the question of university endowments, tuition costs, and moves in Congress to address endowment payouts.  I wanted to note that the discussion so far is really missing a crucial long term element, which is the composition of university admissions.  I have left this in its original form, as an email to Glenn, although Glenn has mostly been simply noting the debate rather than setting out a fixed view.

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Dear Glenn,

I've been following your posts on the higher education tuition debates, and the proposals to force greater endowment payouts.  That stuff is all very interesting, especially to a nonprofits lawyer like me, but I would say that the debate is missing a big issue. 

The biggest long term issue affecting American undergraduate institutions - one which higher education, tax authorities, politicians, parents and the general public need to make some fundamental decisions about now, rather than simply letting the demi-monde of university admissions offices do it - is to what extent tax exempt US universities should be committed to American students.  The most elite universities, the Harvards, Yales, etc., have already committed themselves, at least in principle, to pure global cosmopolitanism.  They have asserted, as a matter of high moral principle, that they are global institutions committed to serving the planet as a whole and not merely any particular place; Harvard is no more an American institution, about serving American society, than it is about serving Massachussets or Boston. 

This is not a call for America Firsting or nativism or anything like that, but it is a question about the commitment of universities to wholesale cosmpolitanism.  Note, after all, that the high minded moral principle coincides perfectly with university self-interest in getting the best students from wherever they might come.  Universities compete on talent.  On a purely cosmopoplitan basis, Harvard, Yale or Princeton could in theory staff an entire undergraduate college solely with people from abroad - there are only 300 million Americans after all, and over a billion Chinese, etc., etc., so that if one were truly serious about looking solely at the undifferentiated talent pool of the entire planet, one might in theory have the best students in the world while including no Americans.  That's just simple numbers. 

When one adds to that the growing wealth elsewhere in the world, and the ability of the wealthy in Asia or the Middle East to write an American university a contribution check in the way that the wealthy now do in order to cement legacy and wealth advantages in the admissions offices, the question of civic commitment versus cosmopolitanism becomes even more relevant.  It does not go away because, to offset the wealthy and legacy students, universities take a certain number of affirmative action students on the basis of identity politics (indeed, one of the striking gamings of the current system is how universities seem increasingly willing to apply affirmative action labels to include students from abroad as diversity admissions, moving away from historically disadvantaged groups within the United States). 

Obviously an entire entering class at Harvard or Yale and no Americans is not going to happen.  But at the margins, the incentives and the legitimating moral rhetoric are all there to move away from American students.  I myself think that there is a powerful contrary moral argument that says that institutions such as universities should be cosmopolitan only to an extent, while remaining rooted in a particular place, a particular society, and finding a large part of its mission there - and that universities as good as Harvard need to arise in other places in the world.  The cosmopolitanism that elite universities in the United States espouse has a tendency to undercut the development of their potential competition elsewhere - smothering future competitors still-borne, as it were, on the basis of a certain high-minded principle.

Call my contrary moral principle the "higher provinicialism" that Josiah Royce, the academic who went out to the semi-civilized wilds of California to further the University of California, urged as the moral ideal for the UC.  That is what a school like Harvard should strive for, not a generalized cosmopolitanism that never comes down from the jet stream to find an actual place on earth, while purporting to run the joint. But this bucks the official ideologies of multiculturalism, cosmopolitanism, and the general idea elites have that the United States should lose itself in the service of what those self-same global elites happen to think is good for the planet as a whole.

The question is what happens when the stream of admissions to universities starts heftily to favor highly qualified - make no doubt about it - students from abroad, while at the same time those same university endowments lower costs for students under federal pressure.  Those same university endowments have swollen in no small part because of massive federal, state, and local tax subsidies in the form of nonprofit exemptions compounded, in important cases, over decades adding up to whole centuries.  Shouldn't the question of whether those subsidies ought, in the first place, to serve the needs of the society that provided them be on the table in this discussion? 

Sure, there is obviously a place for cosmopolitanism and the enriching presence of many students from around the world and all that.  There is a powerful argument that American social interests are served by universities being a transmission belt to the rest of the world through education and interchange (although my experience as an academic suggests that the legitimation of radicalization and anti-Americanism are also large results produced by American higher education among its foreign students; the legitimizing and systematizing and conceptualizing of anti-American sentiment).  But those are quite different things from the dissociation and disconnection from American society and institutions that many universities are urging as their ideal admissions principles. 

There is simultaneously a large question of what happens when the current baby boomlet runs out, and universities start seeing a relative decline in applications.  Every private institution of higher education that I know of is assuming that its economic model will keep going through a higher and higher percentage of foreign students.  This is not necessarily a bad thing, but it raises serous questions as to whether the substantial tax subsidies implicit in universities as tax exempt organizations should continue in the same extent and way, particularly if universities follow the money and see themselves as increasingly as a sort of export industry conducted at home, increasingly about the needs and desires of people and places outside American society.  What is the obligation of American universities toward American society as such?  And how should that affect the substantial subsidies that American society puts toward higher education?

The political discussion over university tuitions is being conducted almost entirely as though the students in question are, and will continue to be, essentially all American students in which the impact of international admissions is too small to matter to class composition.  That is unlikely to remain the case at the margin, particularly at the elite universities with endowments large enough to be relevant to the fees question.  The composition of those student bodies needs to enter the discussion, not just tuition levels.

All best as ever,

Kenneth Anderson

ps.  I haven't been posting much to my blog, but I am going to post up this note there.