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Harvard is prominent in the news because of its battle with the Trump Administration. The model that Harvard epitomizes is worth fighting for, but fragile. While defending it, we should also be thinking about radical alternatives.
Harvard spends more than $6 billion per year, drawing its revenue from philanthropy (45%), tuition, including executive education (21%), research grants (16%), and an “other” category (18%) that includes clinical fees and intellectual property.
Harvard spends very large sums on scientific research and depends on the federal government and wealthy donors for a majority of its budget. It’s largely an illusion that philanthropy provides financial aid. With an endowment of $2.1 million per student, Harvard could charge zero tuition for all. Instead–and, I think, understandably–it charges a high sticker price for those who are able to pay, offers steep discounts for others, and uses a large proportion of its net revenue for research.
The advantages are whatever benefits society obtains from the research. The vulnerability is the university’s dependence on national politicians and the donors who dominate its board of trustees. From an outsider’s perspective, another drawback is that the university rejects an extraordinary proportion of the people who might want to study or work there. Its exclusiveness makes it a rewarding political target.
Such universities also face internal conflicts when federal grants or endowment funds are threatened, because their funding models vary drastically within the institution. For example, the Harvard Divinity School is really financed by endowment returns, obtaining few grants and little tuition revenue. The much larger Harvard Medical School gets a majority of its funds from grants or clinical revenues and only 27% from endowment. The Law School relies on tuition for 43% of its revenue, as compared to 10% in the Medical School. If the trustees stop donating, the market falls, or the federal government suspends all grants, the repercussions will be very uneven. At Columbia, internal conflicts between STEM programs and the liberal arts contributed to its weak response to the Trump administration.
Of course, the Harvard model is not relevant across academia. Wesleyan, which has been courageously opposing the Trump Administration, received a total of $11 million in government and private grants in 2024, representing four percent of its revenues. Wesleyan does not generate the kind of labor- and capital-intensive research that Harvard produces, so it is much less vulnerable.
Most US college students attend public institutions that are not research-intensive or endowed, where tuition really dominates revenue. If Trump’s assault on higher education succeeds, it will cause massive damage on some campuses and have little effect on others.
Traditionally, one way that Americans have responded to crises is by creating new types of colleges–from Calvinist beacons in the 1600s, to Black institutions in Reconstruction, to the California public system after WWII (and many other examples). However, I have shown that the rate at which new institutions are launched has fallen to an all-time low. And, despite the prevalence of several different basic models, the degree of similarity across categories of universities is striking. Each research-intensive university operates largely like all the others.
Here is an alternative that we might consider today:
A new institution would be a cooperative owned and run by its employees, with considerable involvement by students.
The college would incorporate as a nonprofit but only accept donations into its general fund (no earmarks), and its governing board would be elected by its employees plus some student representatives. Employees and students could accept grants and contracts, but there would be no sponsored research office, so the college would be ineligible for most federal grants.
It would minimize costs. It would not provide housing or many services to students outside of the classroom. (As a result, it would be less appropriate for students who have various kinds of needs.) Faculty, staff, and students would do a lot of the management by rotating on committees.
The base tuition price might be set at $12,000, with a faculty/student ratio of 15:1, producing about $180,000 per instructor, which would be divided between instructors’ salaries, benefits, and additional staff (such as accountants, facilities workers, an IT department, etc.). Financial aid would, for the most part, consist of salaries for student workers who would provide essential support. So more financial aid would equal lower staff costs.
The location would have to be urban or suburban, because this would be a commuter school. It could be located in an underserved city, perhaps one of the cities that ring Appalachia. Or, for symbolic reasons–and because there are educational advantages to studying in Washington–it could take residence in the Nation’s Capital.
This design is meant to maximize autonomy and accessibility and serve as a refuge if the existing models succumb to political pressure.
See also: Society is corrupt? Found a new college!; investing in the Appalachian cities; and a co-op model for a college (written in 2015).