It’s not a lot of fun being an administrator at an elite, woke university now that we have a new sheriff in the White House.
Instead of coddling campus antisemites as Sleepy Joe Biden did, Donald Trump is demanding their expulsion.
Those with green cards who support Hamas are getting expelled.
Trump is cutting off federal aid to Ivy League hotbeds like Columbia and demanding they drop DEI.
Yet by and large, leftism still rules at our major universities.
But maybe not for long if The Donald uses the ultimate weapon in his arsenal, something that might, just might, make the leftist college crowd turn into born-again MAGAs.
I am talking about going after the college endowment systems at a time when they’ve never been as vulnerable.
The market sell-off plus some ill-timed investments made these once formidable pools of cash massively exposed to wonky investments and the heavy hand of the federal government if Trump is willing to turn the screws for maximum financial pain.
College endowments are a big business, worth nearly $1 trillion in market value, and they’re the lifeblood of most big, elite and lefty schools of so-called higher learning.
I know these places charge an arm and a leg for tuition, but universities need endowments to pay for new buildings, research and all that woke stuff you see in your kids’ core curriculum, plus the salaries of the leftist professors molding young minds.
Their gains have been juiced by tech stocks, IPOs, M&A and particularly private equity, pools of cash that receive favorable tax treatment for taking companies private and selling them, often at a huge markup.
If you want to know why college administrators until recently could thumb their nose at critics over being an arm of the woke left, preaching to students that America is a racist hellhole, it’s because they had endowment money to burn.
Alumni balking
No longer, according to my Wall Street sources who follow the endowment racket.
The stock market’s recent tariff tantrum, the decline in IPOs and M&A volume, which roiled indices further, is just a part of their financial problem.
Particularly at the elite Ivies, alumni are balking at writing big checks, I am told, angered by the endless parade of antisemites protesting in support of the Oct. 7 massacre and abusing Jewish students in the process, a grotesque spectacle that moronic and woke administrators defended as free speech.
Federal funding is being cut off, too, by the president.
I mentioned Columbia, but Johns Hopkins just announced layoffs and the termination of projects after Trump and his people slashed $800 million in funding to the university.
Trump has promised to end federal funding to any university that doesn’t clamp down on antisemitism, which, if you follow the news, means nearly all the nation’s elite colleges.
He wants no more DEI language used in classroom instruction, and no more overt celebrations of race and ethnicity financed by the schools.
Go there and you can lose your federal funding as well.
Anticipating less federal aid, Harvard announced a hiring freeze, as have other top schools.
But again, neither Harvard nor most elite schools have disavowed their progressive leanings.
Here’s how they might.
It’s a little known fact that in recent years endowments have been feasting on private equity, venture capital and other so-called alternative investments.
By some estimates, these investments represent as much as 45% of all holdings.
Their returns are usually good, but there’s evidence they’ve been underperforming.
They’re also some of the most illiquid investments, which means it’s hard to find buyers if you have to sell them immediately because of a cash crunch.
Donald Trump could make that cash crunch happen, unleashing a world of hurt on the lefty university ecosystem unless they’re willing to go into massive and expensive debt, which will only lead to more financial pain.
Or they can do something smart like engaging in the art of the deal with the ultimate dealmaker and change their evil and woke ways.
Recall during the campaign, Trump floated the idea of an endowment tax well above the meager 1.4% they must pay on returns.
(Before a 2017 Trump tax plan, they paid nothing).
Trump’s VP, J.D. Vance, when he was a senator from Ohio, pushed a 35% tax because the American people shouldn’t be subsidizing left-wing brainwashing with their tax dollars.
Republicans in Congress are proposing a 21% tax in new legislation.
You get the picture: The tax on top of market losses and illiquid PE means a Trump-induced cash crunch could defund the university endowment system or force colleges to make a choice.
The choice is theirs
Will it be Western Civ over Middle Eastern studies?
Professors who want to teach as opposed to those who want to brainwash students with leftist politics?
Merit over DEI?
Scholarships to Americans in need as opposed to foreign students?
Research for transgenderism in mice or treatments for cancer?
And above all protect Jewish students on their campuses.
Will he go there?
Trump has said these colleges are coddling “Marxist maniacs,” so presumably he’s open to taxing these funds to the hilt.
The colleges are scrambling because they’re fearing the worst could really happen.
I’m told they’ve hired every flack and lobbyist with GOP street cred and a heartbeat to reach out to Congress with tales of woe if they don’t back off from their precious endowments.
In other words, if Trump and the GOP-controlled Congress really want to move the university system away from all manner of leftism, they have the ultimate weapon at their disposal at the perfect time in history given the state of the markets.
I say go for it.
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