The financialization of US higher education

Datos Bibliográficos

ID4237162
AutoresCynthia Eaton (0000-0002-4973-406X, University of California, Berkeley, autor de correspondencia), Charlie Eaton, Jacob Habinek (0000-0002-7768-539X, University of California, Berkeley), Adam Goldstein (0000-0003-1127-3541, University of California, Berkeley), Cyrus Dioun (0000-0003-3091-8392, University of California, Berkeley), Daniela García Santibáñez Godoy (University of California, Berkeley), Robert Osley-Thomas (0000-0002-9010-6014, University of California, Berkeley)
Año2016
Páginasmwv030
Fecha de publicación2016-02-08
Peer ReviewedSí
Open AccessNo
TipoARTICLE
RevistaSocio-Economic Review (JOURNAL)
Identificadores de la revistaISSN: 1475-1461 • E-ISSN: 1475-147X
EditorialOxford University Press (PUBLISHER • GB)
DOI10.1093/ser/mwv030
OpenAlexW2337377556
IdiomaEN
Citas recibidas30
Referencias citadas36

Research on financialization has been constrained by limited suitable measures for cases outside of the for-profit sector. Using the case of US higher education, we consider financialization as both increasing reliance on financial investment returns and increasing costs from transactions to acquire capital. We document returns and costs across four types of transactions: (i) revenues from endowment investments, (ii) interest payments on institutional borrowing by colleges, (iii) profits extracted by investors in for-profit colleges and (iv) interest payments on student loan borrowing by households. Estimated annual funding from endowment investments grew from $16 billion in 2003 to $20 billion in 2012. Meanwhile financing costs grew from $21 billion in 2003 to $48 billion in 2012, or from 5 to 9% of the total higher education spending, even as interest rates declined. Increases in financial returns, however, were concentrated at wealthy colleges whereas increases in financing costs tended to outpace returns at poorer institutions. We discuss the implications of the findings for resource allocation, organizational governance and stratification among colleges and households.

Business · Capital expenditure · Corporate governance · Economics · Endowment · Financial system · Financialization · Loan · Monetary economics · Payment · Revenue · Economic Theory and Policy · Finance · Financial Literacy, Pension, Retirement Analysis · Housing, Finance, and Neoliberalism