New Wave of Criticism Aimed at Top College Endowments

A law professor’s essay criticizing the hefty fees collected by major universities’ investment managers has reignited debate about how elite colleges utilize, or don’t utilize, their multibillion-dollar endowments, The Chronicle of Higher Education writes.

University of San Diego professor Victor Fleischer’s New York Times piece last week criticized Harvard, Yale, and other institutions that pay far more to fund managers than they earmark for student tuition aid and called on Congress to mandate an annual 8-percent minimum spend for large endowments. The article drew hundreds of comments from Times readers and sparked a vigorous response in blogs and on social media on the issue, which has for several years been a subject of academic debate.

In a follow-up New York Times column, Mr. Fleischer writes that while high fees may be justified at universities such as Harvard and Yale that can access top-performing private-equity and venture-capital funds, “universities can and should do more to advance the charitable mission” and should be more transparent about how much they paying investment managers.