Back in the mid 20th century, colleges and universities helped America beat down economic inequality. Now they reinforce it.

The American Dream isn’t quite unfolding the way Richard Silva expected. The 20-year-old Silva is currently studying at Cerritos College, a two-year school south of Los Angeles. He graduated from high school in 2009 and anticipated, back then, that he’d be transferring to a four-year school this coming fall.

No way. Cerritos is not offering the courses students like Silva need to graduate. In 2008, the college’s summer session offered 1,352 courses. This summer’s course roster totals about 200. A two-year course of study, protesting Cerritos students charged last week, now takes three to five, even six, years.

“At this rate,” Silva said last week, “I won’t be able to transfer to a four year university until 2013.”

Richard Silva hardly stands alone. Less than half U.S. high school grads today who go on to postsecondary education receive any degree within six years.

American higher ed clearly isn’t working particularly well for students — and it’s not working for faculty either. Colleges and universities, over recent years, have been steadily replacing regular full-time professors with cheaper part-timers, grad students, and full-timers not eligible for tenure.

Part-timers now represent nearly half the nation’s higher ed faculty.

Meanwhile, top college officials are pulling in pay packages that can trip into the seven digits. According to the most recent Chronicle of Higher Education stats, 30 private college presidents are now making over $1 million a year, and 59 presidents at public institutions are collecting at least $500,000.

In effect, observes former Yale faculty member William Deresiewicz in a powerful new Nation analysis, we’ve replicated inside higher ed “a microcosm of the American economy as a whole: a self-enriching aristocracy, a swelling and increasingly immiserated proletariat, and a shrinking middle class.”

We have more than mirror images here. We have interactive images. Inequality in society at large has nurtured the gaping inequality we now see in higher ed — and this inequality in higher ed is driving society at large ever more unequal.

American higher education, in effect, is essentially working only for the rich.

Media coverage of higher ed, ironically, treats the concentration of income and wealth at America’s summit as the answer to the woes that afflict our colleges and universities, not their cause. We read regularly about America’s generous deep pockets and the mega millions they contribute to their dear alma maters.

The University of Pennsylvania, for instance, has been crowing about a $225 million gift — the “largest single contribution in the institution’s 246-year history” — just in from the parents of billionaire private equity kingpin Ronald Perelman.

Overall, six colleges so far this year have received an individual donation of at least $100 million. Yale, in March alone, collected $270 million from its elite alumni, another all-time school record.

All these donations help define our deeply unequal higher ed status quo: Our elite institutions of higher education — the alma maters of America’s economic and political elite — have become fantastically richer. Harvard ended 2010 sitting on a $27.6 billion endowment, Yale on $16.7 billion, Princeton on $14.4 billion.

By contrast, the median American college endowment stands at just $72.9 million. To put these numbers in a sharper perspective: Harvard holds nearly $380 for every $1 that belongs to the typical American college.

In 2007, just before the 2008 financial industry meltdown, the 22 richest U.S. higher ed institutions held more wealth than the entire rest of the 785 institutions the national college business officer association spends time tracking.

No surprise why: The more that wealth in the United States concentrates in elite pockets, the more the wealthy contribute to the nation’s elite universities.

Decades ago, in the mid 20th century, dollars from elite pockets helped bankroll America’s public universities. In those years, states and the federal government taxed the nation’s wealthiest at near triple the tax rate those wealthy face today.

Those tax dollars from the rich made possible an enormous expansion of public higher education in the 1950s and 1960s. For the first time in world history, attending college became a viable option for students from working families.

Now that viable option is disappearing — at Cerritos College and across the United States — as lower tax revenues from wealthy taxpayers translate into state and federal budget cutbacks for two- and four-year public colleges.

Particularly hard hit: Student aid. Thirty years ago, notes analyst Bryce Covert, two-thirds of college student aid came from government grants. Two-thirds currently come from loans, and that means ever greater debt burdens.

This spring’s graduating seniors will march off into the world with $22,900 in average debt. Total student debt hit $530 billion this past December, one reason, Bryce Covert adds, why one-third of all adults under age 33 have no savings.

A half century ago, the United States literally “invented” higher education as a mass phenomenon. For years, the United States sported more college grads than any other nation. The United States, on college grads, now ranks ninth.  

Americans who’ve devoted their careers to higher ed have always sought to create an educated nation. To reach that goal, it seems, we’re first going to have to have a much more equal one.

Sam Pizzigati edits Too Much, the online weekly on excess and inequality published by the Washington, D.C.-based Institute for Policy Studies. Read the current issue or sign up at Inequality.Org to receive Too Much in your email inbox.

Investing recklessness at Harvard is making ‘the best and the brightest’ look awfully silly — almost as silly as a nation that lets staggering quantities of wealth continue to concentrate.

Wild chases after vast riches, last fall’s global meltdown reminded the world, can destroy economies — and corrupt entire societies. Great universities, in theory at least, can serve to slow these chases. They offer a refuge from marketplace passions, a place where sober scholars can reflect thoughtfully on the damage frenzied speculation can do and how that damage can be undone.

America’s greatest university — Harvard — hasn’t enabled much of that reflection lately. The reason? Harvard has been too busy chasing riches.

Now that chasing has left Harvard, the world’s wealthiest university, enveloped in an embarrassing financial debacle that has cost hundreds of university employees their jobs, frozen the salaries of many others, and stopped campus development projects dead in their tracks.  

“Harvard’s investment managers played some of the same reckless games as the big banks,” says historian David Kaiser, a Harvard alumnus. “The difference is that Harvard isn’t eligible for a bailout.”

Kaiser and other Harvard grads from the class of 1969 have been critiquing Harvard investment practices since they learned six years ago that officials in the Harvard Management Co., the university office that invests Harvard’s endowment, were pulling in enormous Wall Street-style bonuses. In 2002, just six of these investment managers pocketed a combined $107.5 million.

To go about grabbing those millions, Harvard’s financial managers were investing university endowment dollars in exotic “derivatives” that promised high, double-digit annual returns. The higher the returns, the higher the rewards for the investment managers — and the greater the incentive to keep plowing endowment dollars into even shakier investments.

But the risk taking went beyond endowment dollars. Harvard actually began investing general operating funds in the same risky investments, in the process, observed the Boston Globe, violating “one of the most basic rules of corporate or family finance: Don’t gamble with the money you need to pay the daily bills.”

And what were Harvard’s grown-ups doing while all this was happening? They were looking the other way. In May 2002, a staffer at Harvard Management wrote then Harvard president Lawrence Summers a confidential letter to warn about the investing recklessness she saw all around her. Nothing changed. Two months later, she was fired for making “baseless allegations.”

Summers, a controversial figure at the university in his own right, would leave Harvard in 2006. He resurfaced, after last November, as the director of the new Obama administration’s National Economic Council.

By that time, the global financial industry had collapsed. In the wake of that tumble, Harvard’s celebrated endowment — worth $36.9 billion at its peak two years ago — lost nearly $11 billion in just a year. The Harvard general operating fund lost another $1.8 billion.

More bad news came earlier this month. Harvard officials revealed they had shelled out just under $500 million, in the university’s last fiscal year, to a host of big Wall Street banks to cover a “failed bet that interest rates would rise.”

University officials, notes the Class of 1969 Ad Hoc Committee on Harvard’s Endowment, have responded to some alumni complaints. The university, for instance, significantly increased student financial aid several years ago. But Harvard, alumni critics charge, is still refusing to “acknowledge any fundamental mistakes.”

These alumni now want the university to cap investment manager earnings.

“We continue to believe,” the Class of 1969 committee related in a recent letter to Harvard president Drew Faust, “that no Harvard employee should earn more annually than the president of the university and that multi-million dollar bonuses are inappropriate in nonprofit institutions.”

The alumni critics also want Harvard to report how many university dollars have gone to the outside investment firms that have, in recent years, managed as much as two-thirds of the university’s endowment investing.

Outside investment managers typically receive a flat 2 percent annual fee on the billions they invest and a 20 percent cut of the profits they make buying and selling invested assets.

Absolutely “no one,” adds the alumni letter to Harvard’s president, “should be compensated on such an enormous scale for managing nonprofit funds.”

But the angry alumni are seeking an even broader change. They want Harvard to start acting as a great university should.

The reckless investment moves that have cost the university so dearly, the alumni note, essentially mirror “the practices that in the same period brought down most of our major financial institutions, with enormous short-, medium and long-term costs to the United States and the entire world economy.”

“Surely Harvard,” they note, “can find the intellectual, moral, and financial capital to face this fact squarely and begin a public discussion of the weaknesses of our financial practices, not only for the sake of the institution, but to help the society which it serves.”

In the end, the Harvard financial fiasco helps make clear, financial maneuvers that pump up endowment jackpots — and rewards for endowment investment managers — don’t contribute to academic greatness. They undermine it.

Indeed, the staggering concentration of wealth in the Harvard endowment — from $4.7 billion in 1990 to $36.9 billion in 2007 — has taken place over years that have witnessed the overall deterioration of American higher education.

The public colleges and universities that deliver most of that education have been steadily cutting academic services and raising tuition beyond the means of average working families, in no small part because tax cuts for America’s wealthy — the same wealthy who donate so prodigiously to their elite alma maters — have helped drive down state budget support for higher education.

The total average annual cost of attending a public four-year college, the College Board reported earlier this month, has now hit $15,213.

“The level of debt we’re asking people to undertake,” agonizes Patrick Callan of the National Center for Public Policy and Higher Education, “is unsustainable.”

The lesson in all this? In both academe and society at large, as the most learned Sir Francis Bacon pointed out over four centuries ago, wealth — like manure — only does good when you spread it around.

Sam Pizzigati edits Too Much, the online weekly on excess and inequality.

With all the fuss over Wall Street bailouts and AIG bonuses, one banking breakthrough is going unnoticed. Obama’s proposed budget completely eliminates an unnecessary, obsolete bank subsidy: College student loans – where the subsidy goes to the bank, not the student. It’s a stick in the eye of the banking industry, and the banks aren’t taking it lightly.