Does Wealth Inequality among Universities Pose a Threat to the American Economy? (Part 2)

The Growth of Institutional Wealth

In Part 1 of this series, “It’s Good to Be the King,” I addressed a recent report from Moody’s Investors Services that predicted a growing separation of a relative handful of super-rich universities from the rest of higher education. I also considered the media coverage generated by the Moody’s report, and expressed my bewilderment that the report’s conclusions did not generate deeper analysis and greater concern.

Perhaps the reason that there was not more media attention and review was because Moody’s summation of the institutional wealth of the richest universities did not surprise many people. There is evidently a broad understanding – and perhaps even acceptance – that some universities have amassed significant wealth, and that the universities with the most recognizable names, and/or the strongest reputations, are often the wealthiest universities.

Does Wealth Inequality among Universities Pose a Threat to the American Economy? (Part 1)

It’s Good to Be the King

On April 16 of this year, Moody’s Investors Services published a report entitled “Wealth Concentration Will Widen for U.S. Universities.” This report was the subject of articles on the same day in such major media outlets as the Boston Globe, The Wall Street Journal and BloombergBusiness.

The underlying tone of the Moody’s report was fundamentally positive, as was true of the media reports referenced above. Given Moody’s previous grim reports regarding the perceived financial weakness of much of American higher education (see an earlier blog post in this series, Moody’s Blues, Feb. 14, 2013) a positive report on a few enormously wealthy AAA-rated institutions was presumably welcomed by many readers and investors.