Decades
of schemes.
It is tempting to ascribe this betrayal of implied contract—with students, parents, and donors—to the pressure that the Trump administration is placing on higher education. If this were in fact what is happening, the university’s actions would be lamentable but necessary.
But that would be false. The effect of the administration’s moves on university operations—in Chicago’s case—is likely to be small. The true problem is the debased ideals of the university’s leadership and the extraordinary debt it has taken on in pursuit of them. The university’s trustees and leaders view it preeminently as a tax-free technology incubator, and its debt load is so great that it is abandoning ideals it once held dear in order to sustain that goal. We are simply choosing not to be a university.
The story of the University of Chicago is in one sense unique. No peer institution has borrowed so much in relation to its assets; none spends remotely as large a percentage of tuition on servicing debt. Despite gifts and the surge in the stock market, the University’s endowment has actually shrunk under its current president from 2021 to 2024 because it has been liquidating assets to mask the size of its deficits.
...
And for another, in the process of seeking to maximize its gain from technologies discovered in its labs, the University of Chicago now does more than participate in licensing. It actively invests in start-ups by its faculty, millions of dollars in dozens of investments. Quite apart from the fact that these investments have mostly been a bust, the practice raises serious questions. Can a university make rational decisions about the value of a given employee when it co-invests in commercial ventures with that employee?
And more seriously, where does the money come from? Is the university driving down what it spends to educate its own students so that it can use unrestricted funds to invest in startups? Or is the university functioning as a kind of tax-free pass-through organization? Does it receive third-party money that it invests as a tax-free enterprise, to the benefit of other investors in the same start-up?
Always the ones you most suspect.
