Wealth Stratification in US Higher Education and Democratic Education, 1890s–2020s

doi:10.1017/9781009071536.031

26 - Wealth Stratification in US Higher Education and Democratic Education, 1890s–2020s

from Part Four - Challenges

Published online by Cambridge University Press: 20 April 2023

Bruce A. Kimball and

Edited by

Johannes Drerup and

Julian Culp: Affiliation:
The American University of Paris, France
Johannes Drerup: Affiliation:
Universität Dortmund
Douglas Yacek: Affiliation:
Universität Dortmund

Book contents

Get access

Summary

Higher education in the United States advanced democracy during the much of the twentieth century by fostering social mobility and by deepening students’ understanding of democratic citizenship, as well as strengthening their capacity to participate in a democratic polity. Concurrently, higher education enjoyed widespread esteem in the United States, while colleges and universities became highly stratified by financial capital, or endowment size, which was closely correlated with prestige. Yet, this financial stratification widened into a yawning "wealth gap" that precipitated a decline in public esteem near the end of the twentieth century. This historical chapter explains these developments and argues that wealth concentration in higher education and wealth inequality in the US population are interrelated, and this interrelationship weakens social mobility and democracy in the twenty-first century.

Keywords

democracy social mobility endowment fundraising investing student debt wealth stratification financial inequality

Information

Type: Chapter
Information: The Cambridge Handbook of Democratic Education , pp. 435 - 455

DOI: https://doi.org/10.1017/9781009071536.031 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2023

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Book purchase

Temporarily unavailable

References

Allen, W. H. (1912). Modern philanthropy: A study of efficient appealing and giving. New York: Dodd, Mead, and Company.Google Scholar

Arnett, T. (1922). College and university finance. New York: General Education Board.Google Scholar

Arnett, T. (1939) Trends in current receipts and expenditures … of endowed universities and colleges. New York: General Education Board.Google Scholar

Association of American Universities. (2019, November 6). Three leading research universities join the association of American universities [Press Release].Google Scholar

Basken, P. (2021, April 29). US colleges’ billion-dollar question: Is philanthropy worth the cost? Times Higher Education. Available at: https://www.timeshighereducation.com/features/us-colleges-billion-dollar-question-philanthropy-worth-cost (Accessed: December 21, 2021).Google Scholar

Bok, D. (2003). Universities in the marketplace: The commercialization of higher education. Princeton, NJ: Princeton University Press.Google Scholar

Bowen, H. R. (1980). The costs of higher education: How much do colleges and universities spend per student and how much should they spend? New York: Jossey-Bass.Google Scholar

Brown, I. J. C. (1926). The meaning of democracy. 2nd ed., Oxford: Richard Cobden-Sanderson.Google Scholar

Bryce, J. (1921) Modern democracies. 2 vols., New York: Macmillan.Google Scholar

Cabot, P. C., & Larrabee, L. C. (1951). Investing Harvard money. Harvard Alumni Bulletin, 53(12 May), 628–34.Google Scholar

Carey, K. (2019, April 1). The creeping capitalist takeover of higher education. Huffington Post. Available at: https://www.huffpost.com/highline/article/capitalist-takeover-college (accessed: December 20, 2021).Google Scholar

Carey, K. (2020, November 18). What about tackling the causes of student debt? New York Times. Available at: https://www.nytimes.com/2020/11/18/upshot/student-debt-forgiveness-biden.html (accessed: December 10, 2021).Google Scholar

Chronicle of Higher Education. (1970, May 4). College endowment funds: Their performance in 1969, p. 8.Google Scholar

Collier, L. (2019). College costs. CQ Researcher. Available at: http://library.cqpress.com/cqresearcher/cqresrre2019102500 (accessed: 10 December 2021).CrossRef Google Scholar

Curti, M., & Nash, R. (1965). Philanthropy in the shaping of American higher education. New Brunswick, NJ: Brown Book Company.Google Scholar

Cutlip, S. M. (1965). Fund raising in the United States: Its role in America’s philanthropy. New Brunswick, NJ: Rutgers University Press.Google Scholar

Daniels, R. J. (2021). What universities owe democracy. Baltimore, MD: Johns Hopkins University Press.CrossRef Google Scholar

Deming, C. (1911, March 17). Yale’s Larger Gifts. Yale Alumni Weekly, 634–35.Google Scholar

Dougal, C., Gao, P., Mayew, W. J., & Parsons, C. A. (2016, February 4). What’s in a (school) name? Racial discrimination in higher education bond markets? University of Houston Law Center Institute for Higher Education Law and Governance Publication.CrossRef Google Scholar

Drezner, N. D. (2011). Philanthropy and fundraising in American higher education. ASHE Higher Education Report, 37(2), 1–16.Google Scholar

Duncan, R. F. (1916, November 24). Notebook of the secretary of the Harvard endowment fund.Google Scholar

Eells, W. C. (1935). Endowments in American colleges and universities. School and Society, 41(February, 23), 263–72.Google Scholar

Eells, W. C. (1936). Income from endowments. The Journal of Higher Education, 7(9), 475.Google Scholar

Ehrenberg, R. G. (2000). Tuition rising: Why college costs so much. Cambridge, MA: Harvard University Press.CrossRef Google Scholar

Ehrenberg, R. G., & Smith, C. L. (2003). The sources and uses of annual giving at selective private research universities and liberal arts colleges. Economics of Education Review, 22(3), 223–35.CrossRef Google Scholar

Ellis, C. D. (2009). Foreword. In Swensen, D. F., ed., Pioneering portfolio management: An unconventional approach to institutional investment. New York: Free Press, pp. ix–xvi.Google Scholar

Fishman, J. J. (2014). What went wrong: Prudent management of endowment funds and imprudent endowment investing policies. Journal of College and University Law, 40(1), 199–246.Google Scholar

Freeland, R. M. (1992). Academia’s golden age: Universities in Massachusetts 1945–1975. New York: Oxford University Press.Google Scholar

Gordon, R. (2016). The rise and fall of American growth. Princeton, NJ: Princeton University Press.CrossRef Google Scholar

Groll, E. J., & White, W. N. (2010, January 9). Harvard to borrow $480 million to fund capital projects and refinance debt. The Harvard Crimson. Available at: https://www.thecrimson.com/article/2010/1/9/harvard-debt-rating-last (accessed: December 21, 2021).Google Scholar

Hadley, A. T. (1902). Annual report of the president of Yale university 1900–1901. New Haven, CT: Yale University.Google Scholar

Harris, S. E. (1970). Economics of Harvard. New York: McGraw-Hill.Google Scholar

Haselby, S., & Stoller, M. (2021, May 28). It’s time to break up the Ivy League cartel. Chronicle of Higher Education. Available at: https://www.chronicle.com/article/how-meritocracy-became-trickle-down-education (accessed: December 21, 2021).Google Scholar

Hauptman, A. M. (2019, January 17). Bloomberg’s gift and the role of endowments. Inside Higher Education. Available at: https://www.insidehighered.com/views/2019/01/17/michael-bloombergs-gift-johns-hopkins-raises-questions-about-role-endowments (accessed: December 21, 2021).Google Scholar

Holmes, J. (2009). Prestige, charitable deductions, and other determinants of alumni giving: Evidence from a highly selective liberal arts college. Economics of Education Review, 28(1), 18–28.Google Scholar

Holt, G. C. (1917, February 2) The origin of the Yale alumni fund. Yale Alumni Weekly, 529–30.Google Scholar

Humphreys, J. (2010). Educational endowments and the financial crisis: Social costs and systemic risks in the shadow banking system. Boston, MA: Tellus Institute.Google Scholar

Johnson, B. A. (2013). Fundraising and endowment building at a land grant university during the critical period, 1910–1940: The failure of Ohio State. PhD dissertation. The Ohio State University.Google Scholar

Joslyn, H. (2019). Campaign fever: Fundraising drives are getting bigger and more numerous. The Chronicle of Philanthropy, 31(6), 8–17.Google Scholar

Kimball, B. A. (2014). The first campaign and the paradoxical transformation of fundraising in American higher education, 1915–1925. Teachers College Record, 116(7), 1–44.CrossRef Google Scholar

Kimball, B. A. (2015). “Democratizing” fundraising at elite universities: The discursive legitimation of mass giving at Yale and Harvard, 1890–1920. History of Education Quarterly, 55(2), 164–89.CrossRef Google Scholar

Kimball, B. A., & Iler, S. M. (2023). Wealth, cost, and price in American higher education, A brief history. Baltimore, MD: Johns Hopkins University Press.Google Scholar

King, S. (1950). A history of the endowment of Amherst college. Amherst, MA: Amherst College.Google Scholar

Klein, A. J. (1930). Survey of land-grant colleges and universities. Washington, DC: U.S. Department of the Interior.Google Scholar

Kuper, S. (2021, April 29). How the middle class became downwardly mobile. Financial Times. Available at: https://www.ft.com/content/9101fc2c-c342-4a3b-897a-26c44e6c10cc (accessed: April 25, 2022).Google Scholar

Lamont, T. W. (1917, January 8). Letter to E. B. Dane.Google Scholar

Langfitt, T. W. (1990). The cost of higher education: Lessons to learn from the health care industry. Change: The Magazine of Higher Learning, 22(6), 8–15.Google Scholar

Lapovsky, L. (2007). Critical endowment policy issues. New Directions for Higher Education, 140, 99–110.Google Scholar

Looney, A., Wessel, D., & Yilla, K. (2020, January 28). Who owes all that student debt? And who’d benefit if it were forgiven? Policy 2020 Brookings Institution.Google Scholar

McMahon, W. W., & Strein, C. T. (1979). The university as a non-profit discretionary firm. Urbana, IL: University of Illinois Press.Google Scholar

Munk, N. (2009). Rich Harvard, poor Harvard. Vanity Fair, 51(8), 106.Google Scholar

National Association of College and University Business Officers (NACUBO). (2021). Endowment Study 2020.Google Scholar

Nevins, A. (1962). The state universities and democracy. Urbana, IL: University of Illinois Press.Google Scholar

New York Times. (1917, January 26). Average Harvard pay $1,840… endowment committee says, p. 10.Google Scholar

New York Times. (1920, February 8). Universities ask over $200,000,000. E1.Google Scholar

Newfield, C. (2003). Ivy and industry: Business and the making of the American university, 1880–1980. Durham, NC: Duke University Press.Google Scholar

Ohio State University. (2012, October). Ohio State launches $2.5 billion dollar fundraising effort [Published pamphlet].Google Scholar

Piketty, T. (2014). Capital in the twenty-first century. Trans. by A. Goldhammer. Cambridge, MA: Belknap Press.Google Scholar

Pinsker, J. (2019, September 3). Why college became so expensive and what that has meant for America’s middle-class families. Atlantic. Available at: https://www.theatlantic.com/education/archive/2019/09/college-cost-indebted-zaloom/597181 (accessed April 25, 2022).Google Scholar

Powell, A. (2013, September 21). Harvard kicks off fundraising effort. Harvard Gazette. Available at: https://news.harvard.edu/gazette/story/2013/09/harvard-kicks-off-fundraising-effort (accessed December 21, 2021).Google Scholar

Price, C. C., & Edwards, K. (2020). Trends in income from 1975 to 2018. RAND Education and Labor Working Paper. Available at: https://www.rand.org/pubs/working_papers/WRA516-1.html (accessed December 21, 2021).Google Scholar

Putnam, G. Jr. (1953, May 9). Sound investing: A brief comparison of the financial policies of five eastern universities. Harvard Alumni Bulletin, 55, 628–30.Google Scholar

Redd, K. E. (2015, November, 1–6). Forever funds. Business Officer Magazine,Google Scholar

Ross, E. D. (1942). Democracy’s college: The land-grant movement in the formative stage. Ames, IA: Iowa State College Press.Google Scholar

Ryan, C. R. (2016). Trusting U: Examining university endowment management. Journal of College and University Law, 42(1), 159–212.Google Scholar

Sait, E. M. (1929). Democracy. New York: The Century Company.Google Scholar

Saltonstall, R. M. (1917, March). Harvard’s new endowment. Harvard Graduates Magazine, 313–16.Google Scholar

Sattgast, C. R. (1940). The administration of college and university endowments. PhD dissertation. Teachers College, Columbia University.Google Scholar

Scutari, M. (2017, April 10). Mega-gifts are rising and alumni giving is shrinking, which means what exactly? Inside Philanthropy. Available at: https://www.insidephilanthropy.com/home/2017/4/10/mega-gifts-universities-fundraising (accessed December 21, 2021).Google Scholar

Seass, A. R. (1937). Endowment income and investments, 1926–35. Washington, DC: The American Council on Education.Google Scholar

Solarzano, L., & Quick, B. E. (1983). Rating the colleges. U.S. News & World Report, 41–43.Google Scholar

Stokes, A. P. (1911, January 20th). Yale’s financial future. Yale Alumni Weekly, 430–31.Google Scholar

Stokes, A. P. (1912). Annual report of the secretary of Yale university 1910–1911. New Haven, CT: Yale University.Google Scholar

Stokes, A. P. (1914). Annual report of the secretary of Yale university 1912–1913. New Haven, CT: Yale University.Google Scholar

Swensen, D. F. (2009). Pioneering portfolio management: An unconventional approach to institutional investment. Rev. ed., New York: Free Press.Google Scholar

Thelin, J. R. (2019). An embarrassment of riches: Admission and ambition in American higher education. Society, 56(4), 329–34.Google Scholar

Trow, M. (1988). American Higher Education. Educational Researcher, 17(3), 13–23.Google Scholar

Twentieth Century Fund. (1975). Funds for the future: Report of the task force on college and university endowment policy. New York: McGraw-Hill.Google Scholar

Ward, A.N. (1930). Making provision for the college of liberal arts; the small college. Being a revision and enlargement of the article printed December 10, 1929. Westminster, MD: Unknown.Google Scholar

Waldeck, S. E. (2009). The coming showdown over university endowments: Enlisting the donors. Fordham Law Review, 77(4), 1795–836.Google Scholar

Weisbrod, B. A, Ballou, J. P., & Asch, E. D. (2008). Mission and money: Understanding the university. New York: Cambridge University Press.Google Scholar

Welles, C. (1967). University endowments: Revolution comes to the ivory tower. Institutional Investor.Google Scholar

Williams, R. (1985). Keywords: A vocabulary of culture and society. Rev. ed., New York: Oxford University Press.Google Scholar

Williamson, J. P. (1993). Funds for the future: College endowment management for the 1990s. 2nd ed., Westport, CT: The Common Fund in cooperation with the American Governing Boards of Universities and Colleges and NACUBO.Google Scholar

Wilson, W. (1917). Address of the president April 2, 1917, 65th Congress of the United States, 1st session. Washington, DC: Government Printing Office.Google Scholar

Yale Alumni University Fund (1915). Twenty-fifth annual report of the board of directors. New Haven, CT: Yale University.Google Scholar

Yale Alumni University Fund (1917). Twenty-seventh annual report of the board of directors. New Haven, CT: Yale University.Google Scholar

Yale Alumni Weekly. (1917, February 2). Alumni make it possible to secure great teachers for Yale, p. 535.Google Scholar

Zaloom, C. (2019) Indebted: How families make college work at any cost. Princeton, NJ: Princeton University Press.Google Scholar

Zunz, O. (2012). Philanthropy in America: A history. Princeton, NJ: Princeton University Press.Google Scholar

Accessibility standard: Unknown

Why this information is here

This section outlines the accessibility features of this content - including support for screen readers, full keyboard navigation and high-contrast display options. This may not be relevant for you.

Accessibility Information

Accessibility compliance for the HTML of this chapter is currently unknown and may be updated in the future.