Isabella Rosen | Oberlin College

More and more frequently, colleges and universities around the country appear to be preoccupied with money. While most elite, private universities are awarded huge endowments by wealthy alumni or other benefactors invested in the success of the school, they also look to other sources to make money. While endowments are tax free, other investments the school makes might not be. Due to this, colleges and universities have been using a loophole called “blocker corporations,” which they use to provide a layer between themselves and companies in which they invest to avoid taxation. These blocker corporations establish themselves in offshore, low tax areas such as the Cayman Islands to keep taxes down and revenue up.

           This scheming from elite, private institutions is problematic for a variety of reasons. Endowments for the schools most often involved in these blocker corporations are overwhelmingly large. Last year, Harvard’s endowment was $34.5 billion, and the University of Texas’ was $24.2 billion. Why is there a need for tax law loopholes and offshore investments with these huge sums of money coming in? What are colleges spending these funds on, while students still struggle to keep up with tuition prices and manage huge amounts of debt?

           Furthermore, a university’s investments should express the feelings and wishes of its students who pay such a high price to attend. When students pick an institution in which to continue their learning, they are making this choice based on a large variety of factors and they struggle to choose a college they feel represents their views and opinions. Some degree of transparency between faculty and students is necessary to assure students they have made a decision they can be proud of. These offshore accounts make it easier to keep details of investments private and out of reach of the students. Many of these investments have been made in oil, gas, and coal, which are products many college students are sure to have strong opinions on. The blocker corporations put in place to prevent taxation for the universities are also gaining money from these accounts, and students have no access to what these corporations are or what they stand for.

These investments are made with the school’s endowment, which is money given to the school with the promise that it is going towards helping the students’ education. Using it to make for-profit investments in controversial products and finance corporations with their own agendas is not staying true to this mission. At Oberlin College, transparency between faculty and students is considered essential and students have been struggling to assure that their voices are heard in decisions the college makes. Students around the country feel the same way, and these blocker corporations and private investments are betraying their trust. 

Hosted on