Fanta Aw
Appearances
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
So when you add it up, it starts to become real money. And you can see how critical the research amount is for the operating budget. Research mostly comes from the government. And the way it works is it'll be an agency, the National Institute of Health or a group like that will write a check to the university. The fiduciary of the university is the board of
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
directors of the trustees so that the check gets written to them but it's really being sent to the researcher who came up with a really good idea that impressed a lot of people and made it through a really intense vetting process and the nih or whoever decided this is such a good idea we want to fund this research That money goes to the board and then the school is going to keep a chunk of it.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
They have something called the facilities and administration. And that can be north of 50% because that pays for the labs and the administrators and the electricity. And there's a lot of things that go into running a university. What's left over pays for the grad students, the researcher, whatever is needed to do the research itself.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
One of the things that the Trump administration has done is said, we don't wanna pay 50, 60 percent in facilities and administration. We want that limited to 15 percent. So that was one of the first things that Trump did. And it really threw a monkey wrench in the budgets of these universities because that money is used by the university to keep the lights on. And it's fungible.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
If that money is suddenly getting cut by two thirds, that's just less money coming into the system. And, you know, it has to come from somewhere else.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
So Trump is using a new set of tools to pull grant money. They created this task force that's looking at the contracts that the researchers have received, and they're canceling or freezing those contracts, using language in the contracts, as opposed to going through the Title VI procedures. The Title VI is a civil rights, you have to go through certain things in order to stop funding that way.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
So there's a different tool being used, and that's part of why this is sort of legally on new ground.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
The faculty, the AAUP, which is the Union for the Faculty at Harvard and at Columbia, has filed a lawsuit on the ground that the Trump administration does not have the right to cancel research grants and to tell them what to research and what to teach on campus, that that's a violation of their First Amendment rights.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
And we're moving into uncharted territories here, so the courts are going to have to weigh in on this.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
Right. So there's two actors here. There's the researcher and there's the institution. So there's less money for the institution. So they're figuring out how to cut back. For the researchers, it's calamitous because this is their entire income stream.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
One NIH grant can keep dozens of people employed and an entire research project, which may be spread across several institutions or even around the globe. Now the checks stop cashing. The research comes to an end. People are lose their jobs unless there's a way to tap another source and experiments or projects that may have been going on for years can get canceled.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
And that's why it's such an existential issue for the research community.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
So around two thirds of the costs to run a university are people. They're going to get rid of people. They're not going to fill positions. They're going to hold off on raises. They're going to trim benefits. It's like every other corporation when there's not enough money coming in. The workers are going to feel a pinch. That's going to be the main thing.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
Projects are going to get shelved, things that were going to be built. There was money earmarked for them from a particular donor, but maybe the school had to match a piece of that. Now the school can't match it, so they're going to postpone. That's the sort of thing that's likely to happen.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
Some schools are really dependent on tuition and some schools less so, right? Some schools are getting 75% of their revenue from tuition. But if there's less money in the pot, usually what happens is the chief financial officer says to the admissions director, we need to generate $50 million from this year's class.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
And so you can give scholarships and grants, but we need to get that much money coming through the front door, which means that there's pressure on the admissions folks to bring in enough kids who can pay enough money to hit that number. And ultimately, that will mean some kids will get smaller packages and they won't go to that school.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
And the field will sort of tilt in favor of kids who are able to pay in full. So that's how this will round out at some schools. But you say that there's not that many kids in America, families in America who are able to pay full freight for universities. So the sticker price for schools keeps going up, but the net price is now going down because there's fewer people who can afford it.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
So there creates pressure at kind of at every point.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
Boom. Pressure that universities are under is to maintain the money so they're turning more toward adults and people who didn't graduate college. They're trying to be more entrepreneurial. They're trying to attract more adults. They're trying to go more online.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
You see little one-offs, assisted living and senior living popping up near universities so that those people can enjoy what's happening on a college campus and the resources there, which is also a financial benefit for universities. So there's little green shoots happening around the country that universities are experimenting with to bring in more money.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
So I guess sort of to back up a little bit, the name of the task force is the Task Force to Combat Antisemitism. And the reason it was stood up is because Jewish students on campuses, particularly at Columbia and Harvard, were being harassed. They were getting screamed at on the way to class. And that's the focus of... the task force.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
What Trump and folks in the task force are saying is that, listen, the universities have adopted an ideology that's so progressive and leans so far to the left that they've accepted these notions, which ultimately believe that Israel, Zionism is a form of racism and it's a settler colonial state that doesn't have a right to exist.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
And so this way of thinking has led to people promoting Hamas and these groups that are at war with the United States. And so we have to create a more intellectually diverse environment and we have to make sure that folks who are enemies of America don't have a place in the university and they're not comfortable there. So universities are largely self-governing.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
The faculty determines who is gonna be on the faculty, who is gonna get tenure, and they guard this jealously. They have the freedom to decide what to think, what to study, what to research. Other places don't have that. They have ministers of education, and there's more of a top-down approach that's bottom-up here.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
So if the government says, we want to be the ones who decide who's teaching, what you're teaching, then they're challenging this notion of academic freedom. And that's sacrosanct on college campuses. And that's why people are going crazy. This notion, Donald Trump or anybody else in the federal government gets to determine what should be on a curriculum, on a syllabus.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
That's a First Amendment issue. So on the one hand, you've got overreach from the left. that squashed intellectual debate on college campuses because they said, we'll cancel you if you say certain things, if you believe certain things. And a lot of faculty were aligned with that. And now you've got the right coming in and saying, we're gonna take over and we're gonna be the ones who decide.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
And so there's this sense of overreach from the right. But the university also has an obligation to regulate itself so that it is not so far out of touch with the American public in this case politically, that the support that the American public is giving them makes sense to the public. And so this disconnect is why this is happening.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
Thanks very much.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
So international students who come to the US, granted that they only make up 6% of the total population enrolled in universities, their economic contributions is quite significant. We track that on a yearly basis. And for our most recent data, it's about $43 billion. And it's not only to universities, by the way.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
The 43 billions are to universities, but also to the local economy of where those universities are situated. And it's also over 300,000 jobs that are created as a result of international students coming to the US to study. Most of the students who come to study tends to be graduate students. They study generally in the STEM fields or in the business administration area.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
In terms of their source of funding, the source of funding is mostly students who are self-funded. However, at the graduate level, given the importance of research and given the importance of assistantship and so forth, there are graduate students who come with funding provided to them in return for research and assistantship at the graduate level.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
What we keep hearing from students and from stakeholders is a lot of anxiety, tremendous confusion around the processes and so forth, and the need for greater answers and transparency around these processes. We're constantly hearing that. For students who make the decision to come and study in the United States, that's not a small decision to make.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
Preliminary data has indicated that in several parts of the world where there had been previously a high level of interest in wanting to come and study in the US, that we're seeing about a 40% decline in the number of those students who are looking to the US as a destination. So if universities...
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
Well, it depends, right? Because a good number of them are graduate students. Whether you're talking about business programs and other fields of study, graduate students are bringing in funding to the university. They're bringing tuition dollars to the university. But also, for those universities that are receiving research funding,
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
Often at the graduate level, particularly in fields like the STEM field and others, a lot of times it is graduate students who are working in partnerships with faculty to in many ways be able to fuel the research engine of universities as well.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
And that's another component that could be potentially at risk is the research infrastructure and the ability to be able to conduct the level of research that is often needed with both domestic and international students as we speak.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
I think it can be a hit to the reputation of universities, not in the immediate, because these are universities that have had a long-standing and solid reputation for decades internationally, but I do think over a period of time it could be.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
The other piece about this also is that international students, in many ways, when they come and they study and they've learned more about the United States and they go back home, they become a very important bridge to trade and other relations for the United States. So the loss of that can have other consequences in the long run.
WSJ What’s News
Trump Moves Could Force Universities to Recalculate Their Bottom Lines
Thank you, Alex. Thank you for the opportunity.