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PaperclipPerfector  1d ago (text post)   5974 thread views

Culture War Roundup for the week of October 21, 2024

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It depends on what you mean by "disbanding" the Department of Education. Its abolition has supposedly been a top priority of Republicans more or less from the day it was established, yet I think its nameplate budget and the implication that Federal bureaucrats are meddling in what is supposed to be a local concern create a perception of it that doesn't square with reality. So it largely means whether you're talking about a symbolic reorganization wherein the Department's functions are simply divided among other government agencies, or elimination of the actual programs the Department administers.

We can easily dismiss the first option, since it wouldn't result in any substantive changes other than the huge bill involved for administrative costs relating to the reorganization. At the very least, I'd need to see some sort of comprehensive study suggesting that the cost savings of such a reorganization would justify the cost of doing it. If we're talking about the second option, we need to look at what the Department actually does.

60% of the Department's budget is related to higher education assistance, split roughly evenly between direct loans and Pell Grants. I imagine we'd both agree that the student loan system in this country is fucked up and probably responsible for the massive cost increases schools have been experiencing for decades, but this isn't something we can just eliminate overnight. I've seen statistics that suggest Federal student loan and tuition assistance accounts for about 18% of revenue for 4-year public universities. At first glance, no institution can afford to lose 18% of revenue overnight. But it's actually more than this. The same statistics show that 28% of revenue comes from "sales and services". This theoretically includes everything from profits made from the bookstore to t-shirt sales, but the vast majority of this is revenue from university-associated hospitals. While this technically counts toward the entire institution's revenue, I'd imagine that hospital fees subsidize education about as much as tuition covers the costs of the hospital. In other words, these are functionally separate entities whose only real overlap is that the hospital is a teaching hospital for the medical school, so I'm keeping this separate. Doing that, Federal support now accounts for up to 25% of revenue. As I said earlier, I'm all in favor of forcing costs down, but a 25% across the board cut will likely result in the kind of emergency cost-cutting measures that are likely to throw the entire higher education system into crisis. Not to mention the fact that a lot of existing students will find themselves with debt from unfinished degrees they can't afford to complete. I'd prefer a system that makes eligibility for federal funding contingent on cost-control, but such a system would require more Federal oversight, not less. This, of course, doesn't even account for all the existing loans that the Department services.

Beyond that huge chunk of the budget, about 15% each goes to Title I grants and special education grants. Title I grants are grants to schools with low-income students to pay for remedial reading and math services. While this may give the impression that the funding goes to low-income school districts, pretty much every school qualifies for some level of targeted funding. Again, the result will be that these programs will be cut entirely or simply replaced by state or local funding, which may be difficult in some areas.

So now we're down to the 10% of the budget that accounts for miscellaneous items like compiling certain statistics, administrative costs, etc. I'm sure there's stuff here that can be cut, but eliminating an entire cabinet-level department in order to trim out a little fat seems like an inefficient way of doing things. Unless we're willing to make some serious changes to education funding and the student loan system in the United States, and talk of eliminating the Department of Education is nothing more than a buzzword that shows we're Serious About Doing Something, so long as that something doesn't actually do anything. If the goal is to eliminate student loans or remedial and special education funding entirely then that's the discussion we should be having, not some red-herring thing where eliminating a department will magically eliminate 200 billion dollars from the budget.

this isn't something we can just eliminate overnight

Why not? It seems rather simple to me to just declare that the offices will be closing and programs will all be ending on such-and-such date.

This is a general point that I'm not aiming at you in particular @Rov_Scam but I've noticed that people (on all sides) use "can't" to mean "shouldn't". The "can't" is hiding an unspoken "because X consequences will result". Sometimes this happens because X is literally unthinkable for the speaker, or because they consider it too obvious to need saying, or because they haven't thought their response through all the way. Sometimes (from professionals) it's a manipulative rhetorical tactic.

You actually elaborate more later, saying that we can't abolish the Department of Educator overnight because it would throw higher education into crisis, and strand students with unfinished degrees. But so many people don't. They say things like, we can't halt immigration, we can't withdraw from green treaty requirements, we can't ignore calls for reparations. I would urge people to write/demand the full argument whenever they find "can't" being used for something that isn't actually physically impossible. I think it encourages more rigorous thinking and more clear lines of debate.

It's not just in political discourse either....

but this isn't something we can just eliminate overnight.

Why not? It seems rather simple to me to just declare that the offices will be closing and programs will all be ending on such-and-such date.

I've seen statistics that suggest Federal student loan and tuition assistance accounts for about 18% of revenue for 4-year public universities. At first glance, no institution can afford to lose 18% of revenue overnight.

So what? If anything, this 18% isn't big enough.

Doing that, Federal support now accounts for up to 25% of revenue. As I said earlier, I'm all in favor of forcing costs down, but a 25% across the board cut will likely result in the kind of emergency cost-cutting measures that are likely to throw the entire higher education system into crisis.

And what's so bad about that? Besides, that is, that it doesn't go far enough. The "entire higher education system" doesn't need "thrown into crisis"… it needs to be burned down — somewhere between Henry VIII's dissolution of the monasteries and Qin Shi Huang's burning of books and burying of scholars (including the executions).

May I ask what it is you do for a living?

This is a great steelman and I really appreciate the comprehensive reply.

This is a great example of how the federal bureaucracy uses funding to weave itself into every fiber of an education system that should be, in theory, nearly completely independent of the federal government.

The argument for getting rid of the department, I suppose, hinges on the belief that it will never be easier to expunge than it is right now. In another 20 years it will just be that much harder.

And if we take a targeted and incremental approach, it will be argued about for 4 years, something minor will happen, and then all the changes will be undone the next time there is a political shift in the wind. Instead of cleaning the barnacles from the stuffed pipe, better to remove the pipe entirely, even if it's disruptive.

But obviously this is wishcasting, and we're likely just stuck with more barnacles forever.

I'm all in favor of forcing costs down, but a 25% across the board cut will likely result in the kind of emergency cost-cutting measures that are likely to throw the entire higher education system into crisis.

As of the end of FY 2021, American college and university endowments totaled over $927 billion, up 34% from $691 billion at the start of the fiscal year. That slightly outpaced the S&P 500's growth during the same period, which was only up 26%. Even if FY 2022 and 2023 weren't quite as bumper years, the tertiary education system in the U.S. undoubtedly has at least $1 trillion in the bank, not to mention that most of the top research universities are also state institutions, with direct support from state-level taxpayers.

There's plenty of money to go around.

Endowments aren't piggy banks that schools can raid whenever they need quick cash. They consist of donor-restricted funds that have strict guidelines on how they can be spent and invested; the purpose of the underlying donations is to fund specific things in perpetuity. If a wealthy donor gives you 5 million to fund the George V. Hamilton Professor of East Asian History (who will be making 200k/year), you can't just fire the professor and spend whatever's left in the endowment. If, for whatever reason, you wanted to end the professorship, you'd have to follow whatever procedures were specified in the original donation to end the endowment, usually under the supervision of the state attorney general. Yeah, these numbers are huge. But they're meant for funding things that are, by definition, already funded.

Some endowment donations are subject to that tight of a restriction, sure. However, there are also unrestricted donations which may be put towards general educational purposes, and donations whose restrictions are much more flexible (for example, a donation restricted to the support of a school's history department generally could likely be used for just about anything - professor salaries, administrative support, facilities maintenance, student scholarships/grants, archival and research purchases, etc.)

Of course, far more common is a restriction that the principal of an endowment can't be spent; only the profits flowing from investment of that principal, which makes endowment absolute numbers a bit deceptive. Given the speed with which endowments have been growing recently, I'm not that worried about this.

Ultimately, colleges and universities are known for being masterful in manipulating bureaucratic processes to achieve their desired results, no matter what the black letter law may say (see, e.g. the lengths administrations have gone to in order to enshrine race-based preferences in admissions). I'm confident that they'd find a way to put that money to real productive work if they had to.

If a wealthy donor gives you 5 million to fund the George V. Hamilton Professor of East Asian History (who will be making 200k/year), you can't just fire the professor and spend whatever's left in the endowment.

How true is this? At some point, rules against perpetual trusts must surely apply. And if they don't apply well.. they should.

It's unconscionable for huge chunks of the economy to be tied up by the wishes of long dead people.

It's time to tax the endowments.

The law is excruciatingly clear that perpetuity limits don't apply to charitable donations, or charitable trusts, for that matter. Technically speaking, the Rule Against Perpetuities only applies to contingent remainders and executory interests, and charitable donations have neither. Practically speaking, courts and legislators are reluctant to invoke perpetuity limits on charities as a matter of public policy. I'm on the board of a nonprofit, and large donations to the general fund are rare. You can get this money from annual fundraising events, membership fees, and small donations, but if someone is looking to drop serious cash they're going to want to know in advance what projects you have coming up that it can be used for. If your projects consist of ongoing expenses, like salaries or scholarships, you'll need to raise about 20 times the annual cost and invest it so the money is always available. The alternative is that people just don't donate because they don't want their money going into a black hole. Sometimes you can get out of it, but usually only in extraordinary circumstances, and even then you'll need court approval and have to notify the AG. There's a lot of fuckery surrounding charitable orgs as it is, and removing restrictions without good reason only encourages that kind of fuckery.

Dang. It's worse than I thought. Thanks for the color. Your posts are always very informative.

I wonder what percentage of wealth is controlled by dead hands at this point?

Of course, in reality, it's often worse than dead hands. It's very live hands with a radical agenda and no accountability. Imagine if Henry Ford could see what his foundation is up to today. These endowments simply must be taxed. I'm always blown away by how much wealth they control, and how it's controlled by a group of elites who have almost no checks and balances. (The whole OpenAI fiasco shined a light on non-profit boards that way).

There are random foundations all over the country with billion dollar endowments. For example, the Kellogg foundation in Battle Creek Michigan has $8.8 billion.

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