By House Republicans have a long-term plan to strip elite universities of government funding and federal student loan dollars, Rep. Jim Banks, R-Ind., told a group of business leaders during a private Zoom call Friday.
Banks, an ally of former President Donald Trump, sits on the House Education Committee. The panel recently launched investigations into Harvard, the Massachusetts Institute of Technology and the University of Pennsylvania. The probe announcements followed a Dec. 5 hearing at which leaders of Harvard, MIT and Penn struggled to clarify their positions on antisemitic speech on campus.
Banks told the business leaders the hearing was the first step in a larger effort to take on Ivy League schools. An audio recording of the call was provided to CNBC by an attendee who requested anonymity in order to share a private conversation.
“The second step is the investigation, the subpoenas, gathering all of the documents and the records from these universities to prove the point,” said Banks. “That they’re not just allowing this behavior to occur, they’re fostering it and creating an unsafe environment for Jewish students on their campus because of it,” he said.
“And once we prove it, third, that’s when we defund these universities by cracking down on not backing their student loans, taxing their endowments and forcing the administration to actually conduct civil rights investigations,” said Banks.
Banks’ frank description of lawmakers’ plans offers a previously unreported window into at least some members of Congress’ long-term goals with regard to at least two Ivy League universities and MIT, another elite university. The House Education Committee chair, Rep. Virginia Foxx, R-N.C., said in an interview on NewsNation that the committee is also looking at Columbia University and Cornell University.
“That’s what we are laying the groundwork for. The hearing was the first step,” Banks said when asked about how Congress could focus on revoking federal funding for schools such as Penn and Harvard.
Banks also told participants that the committee has hired a full-time staffer to help lead the probe into Harvard, Penn and MIT. Ari Wisch, a senior counselor to Foxx helping lead the probe, previously worked with the Committee on Oversight and Government Reform.
“As the committee progresses in its investigation, it will be in contact with the Department of Education to ensure enforcement actions are occurring in schools that are failing their students,” a committee spokesperson told CNBC, in response to questions about how defunding schools might work.
“One of those enforcement actions could mean schools losing federal funding,” said the spokesperson.
A Banks congressional aide later told CNBC the lawmaker was speaking only for himself and not for the whole committee. Banks is running in a Republican primary for a U.S. Senate seat.
The idea of taxing selective college endowments has gained traction with at least one other Republican in Congress. Sen. J.D. Vance, R-Ohio, recently introduced a bill that would hit college endowments worth over $10 billion with a 35% tax.
The legislation has little chance of passing the current Democratic majority Senate, or of being signed into law by President Joe Biden. But if there is a Republican in the White House and a GOP-controlled Senate in 2025, the calculus could be very different.
The fallout from a bill like Vance’s would not be limited to Harvard, Penn and MIT, however. Yale University, University of Notre Dame, Columbia University and Duke University all have endowments worth more than $10 billion, according to the National Association of College and University Business Officers.
These schools also rely on significant federal funding. For example, in 2021 Harvard received $625 million in federal funds, or approximately 67% of the school’s total sponsored revenue that year.
From the government side, student financial aid accounts for the lion’s share of federal dollars that go to colleges and universities. In 2018, 65% of the $149 billion total in federal funds received by institutions of higher education went toward federal student aid. This covers scholarships, work-study and loans given to students for their educational expenses, according to USAFacts, a nonprofit site that collects government data.
