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Yale University President Richard C. Levin has for several years mulled what many of his peers have considered for their colleges--running the place more like a business. ''We have to manage this institution efficiently,'' he says. ''We can't do everything under the sun.'' He would like to pare departments that don't serve a strong need and focus on ''centers of selective excellence.''

But Levin's actions haven't matched his ruminations. Yale's restructuring has been limited to modest reductions in administration, consolidation of biology graduate programs, and enrollment cuts at the divinity school. Even those steps galled alumni and professors, who associate Yale's preeminence with academic abundance.

SURFEIT. Such is life among the elites. While state universities face plummeting government assistance and smaller private colleges struggle to maintain enrollment, Yale and a few dozen other top-tier institutions still thrive. They attract six or more applicants for every freshman slot--a surfeit that has persisted over the past decade despite annual tuition of more than $20,000. They still guarantee financial aid to everyone who needs it. And they spend liberally to attract star faculty and research grants.

These universities remain insulated from market pressures in part because they have established an aura of quality--call it brand strength or snob appeal--that keeps students coming, despite the price. An Ivy League degree doesn't win higher starting salaries than other diplomas, but it does lead more often to top graduate programs and, so, to greater professional attainment. Throw in access to powerful alumni networks, and ''the interest of very able people in going to leading institutions has not only remained strong--it has become stronger,'' says William G. Bowen, president of the Andrew W. Mellon Foundation and ex-president of Princeton University.

Indeed, experts believe these schools could charge far more than they do and still draw top students. Yet they don't have to. Most are insulated by coffers bloated by the stock market that spin off millions in annual operating income. Yale's endowment, swelled by a record $1.7 billion capital drive, is $5 billion. Harvard University, the fund-raising king, has $9 billion.

PUBLIC URGENCY. Such fund-raising feats cushion the effect of ebbing government research assistance. They also reduce universities' reliance on tuition and fees to about 65% of the total budget, compared with 90% or higher at small private schools. So big-endowment institutions can better afford the financial aid that maintains diverse classes even as they plow millions into new technology and upkeep for aging buildings. That perpetuates their reputations as top-drawer academies.

This lesson hasn't been lost on big public universities. These days, ''we cannot do it just with state support and tuition,'' says Judith A. Ramaley, president of the University of Vermont, which recently raised $108 million in its first-ever capital campaign. The University of California at Berkeley, ravaged by state cuts, is seeking $1.1 billion in private gifts by 2000; the Universities of Virginia, Illinois, and Michigan all are mounting fund-raising drives to rival the Ivies'.

Those urgent campaigns, however, typically have followed radical downsizing and restructuring. Secure in their ivory towers, Yale and its peers generally can afford to eschew such strategies. They know that quality sells--whatever the price.

By Susan Jackson in New Haven

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Updated Dec. 11, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.
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