Universities have unchecked power in how they spend their funding that seems to be growing each year through larger endowments, receiving large sums of federal funding and increasing tuition for students. This is especially true for America’s top-ranked universities that continue to promote diversity, equity and inclusion (DEI) and allow antisemitism to run amuck.
The Trump administration and Congress must work together to rein in this unlimited power that universities have usurped. For starters, endowments can be taxed to a greater extent to ensure universities pay their fair share.
Universities that hold some of the largest endowments include Harvard at $52 billion, Yale at $41 billion, Princeton at $34 billion and Columbia at $15 billion. Each of these universities has wasted funding in creating DEI offices with each office having its own staff. Columbia created its DEI office as late as last year.
Despite claiming to support equity, each listed university has allowed antisemitic protests since the terrorist group Hamas invaded Israel and killed over 1,000 people, including American citizens. Princeton and Columbia allowed anti-Israel protesters to form encampments on campus. Harvard Law School students overwhelmingly voted March 13 for a resolution for the overall university to divest from Israel.
Greater taxes can be levied on universities that continue to act as bad actors and allow these troubling events to occur. President Donald Trump first signed endowment taxes into law in the Tax Cuts and Jobs Act during his first administration. This law introduced a 1.4% tax on endowments for private universities with “at least 500 students that have endowment assets exceeding $500,000 per student,” according to the Tax Policy Center.
Members of Congress have introduced legislation this year to increase the tax rate on university endowments to as high as 21%. Republicans are currently working on a new reconciliation budget bill. They could use this opportunity to increase the endowment tax and incentivize good behavior – such as eliminating DEI and restricting antisemitic activities – with lower taxes.
Even after accepting billions in funding for their endowments each year, private universities receive federal funding as well. In 2024, Harvard received $686 million, Yale received $899 million, Princeton received $456 million, and Columbia received $1.3 billion in taxpayers’ money.
The question arises: If these universities receive so much for endowments, why do they need federal funding in the first place? This is especially true when they prioritize political agendas over providing students with a proper education. The Trump administration should simply end federal funding for universities that continue to promote dangerous ideologies. That now appears to be happening.
Since taking office, Trump has signed a flurry of executive orders targeting DEI and has threatened to strip schools of federal funding if they continue to promote it. He is following through with that threat.
The Trump administration recently cut off $400 million of federal funding from Columbia University. The Free Press reported that this is a result of the university failing “to take steps to confront antisemitism on campus after Hamas’s October 7, 2023, attack on Israel.”
Before considering providing Columbia with the $400 million, the university would need to create a definition for antisemitism, ban protesters from wearing masks and place the Middle Eastern, South Asian and African Studies Department under what is called an “academic receivership.”
While a great alternative is just to cut federal funding from universities that have large endowments altogether, using it as leverage to enforce better behavior is not a bad idea.
As the Trump administration has shown with Columbia University, federal funding can be withheld from institutions that allow terrible ideologies to fester. Endowments can also be taxed at a greater rate with possible incentives to award good behavior. These are simple and easy solutions to ensure universities no longer have unchecked power.
Casey Ryan is a writer and investigative reporter at Parents Defending Education.
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