TL;DR

• Columbia is financially interdependent. Several schools can’t survive on their own. We modeled a three-way institutional split—and the traditional Arts, Humanities, and Social Sciences would be insolvent almost immediately.
• Professional schools print money. They generate major surpluses thanks to high tuition, low aid, and little to no research compliance costs.
• Science & Engineering runs lean. Despite comprising the lion’s share in revenue, tight margins reflect the true cost of research, PhDs, and federal regulation.
• Cross-subsidies are essential. The quiet redistribution of resources is what keeps the whole ecosystem alive and greater than the sum of its parts.
• Unity is survival. Fragmenting the university would weaken everyone. The path forward requires mutual understanding, not siloed grievance.

Own goal week 

It’s been a pretty bad week for Columbia.  In soccer parlance, Columbia made a series of “own goals” this week.

First, while the University is in delicate negotiations with the government, it announced the appointment of Professor Farah Jasmine Griffin to the rank of University Professor—its highest academic honor. No one doubts Professor Griffin’s stature in her field, and specific academic appointments are best left to faculty committees.  But she has publicly aligned herself with BDS and CUAD. The timing of this announcement, whatever its internal logic, is hard to explain, and even harder to justify.

Second, Bloomberg reported (and Columbia confirmed) that a hacker stole 1.6GB of admissions data over several decades including university-issued identification numbers, citizenship status, decisions on their applications and other sensitive data. A blog alleged the hack contained evidence that the University was still practicing race-based affirmative action after the SFFA vs. Harvard ruling that banned it.

Third, Columbia settled a class action suit and paid a $9 million settlement over allegations that it sent incorrect data to U.S. News & World Report that had the effect of inflating its college rankings. After this was exposed by math professor Michael Thaddeus, Columbia stopped submitting data to U.S. News, which then attempted to recalculate rankings based on outside-in public information. As a result, Columbia’s rankings dropped from #2 to #18 and then settled at #13.

Fourth, Acting President Claire Shipman has come under fire for a batch of private text messages from 2023–2024, released in a letter by the House Committee on Education & the Workforce. She has since apologized, acknowledging that what she said was wrong, and that she “should not have written those things.” We are glad to see this, as taking responsibility for mistakes is what leaders do. But none of this changes the urgent reality: Columbia must finish its deal with the government and appoint permanent leadership. That’s where the focus should be.

Exploring a terrible idea further

Many readers commented on last week’s issue exploring the dreaded question: what’s Plan B if there’s no deal? Option #4 “Split research and teaching” seemed to strike a nerve. As one faculty member wrote:

“Biomedical and other science researchers should not be at risk of career-disrupting sanctions delivered to punish the universities with which they are affiliated. Similarly, the University’s ability to engage in searching inquiry and debate on questions that might discomfit those in power should not be subject to prudential concerns for science researchers’ careers.”

That comment, and others like it—particularly those frustrated that the loudest campus voices often seem unconcerned with collateral damage to research and education—got us thinking. What would actually happen, purely as an (awful) thought experiment, if Columbia broke up along these lines? 

So what if Columbia followed suit and reorganized into three separate, standalone, firewalled entities to separate teaching and research as some are now quietly suggesting? Here’s what it might look like:

• Columbia Arts & Humanities: Humanities and Social Sciences divisions of Arts & Sciences (serving CC, GS, and GSAS), plus the School of the Arts.
• Columbia Professional: Law, Business, SIPA, Climate, Journalism, Professional Studies, GSAPP, and Social Work.
• Columbia Science & Engineering: Engineering (undergrad and grad), VP&S, Dental, Public Health, Nursing, and the Natural Sciences divisions of Arts & Sciences (serving CC, GS, and GSAS).

This division groups schools not by their current administrative homes, but by shared characteristics. For example, the School of Professional Studies aligns more with the professional schools (high tuition, no financial aid, older students) than with Arts & Sciences. Similarly, the Natural Sciences division of A&S looks a lot more like its medical and engineering counterparts (high grant volume, intense compliance requirements) than its neighbors in the Humanities and Social Sciences divisions.

The results

Columbia helpfully publishes its financial statements online, and they’re an oddly enjoyable read. While the reports don’t break out school-by-school finances, some of the most useful data comes from OPIR, particularly the breakdowns by enrollments and financial aid.

A caveat: these numbers are likely wrong in the fine print, due to the high levels of assumptions. But they are also directionally right, offering a reasonable approximation of how Columbia’s schools would perform as standalone entities.

This analysis is built on a series of assumptions (detailed at the end of this issue). Here’s the result:

Here’s another view:

In effect: 

• Columbia Arts & Humanities would be immediately insolvent, running a $320 million deficit on $821 million of revenue. Its current cost structure simply cannot be sustained by tuition and philanthropy alone, even if all financial aid were to be eliminated. However, this is largely driven by the design choice to carve out Professional Studies and the Natural Sciences division due to their differential characteristics; if we analyzed this according to its current administrative grouping, their revenues would mostly, if not completely, subsidize the deficit.
• Columbia Professional runs what is, by university standards, a dream business: a $530 million surplus on $1.3 billion of revenue. These schools serve audiences with relatively low price sensitivity, offer modest financial aid, and avoid structural research costs. As our late friend Michael Sovern once laughingly told us, during the 1950s–80s, the professional school deans were often known as “the barons.”
• Columbia Science & Engineering operates on high volumes and thin margins: a $175 million surplus on $3 billion of revenue. This reflects the triple burden of heavy research activity, extensive financial aid (including full tuition remission for PhD students), and the compliance infrastructure required to administer federal funding. This is why we continue to defend the ~26% “Method 3” indirect cost recovery (ICR) rate Columbia charges on federal grants as not only fair but necessary given the government-imposed regulatory overhead.

We repeat: this is a terrible idea

As mentioned last week, subdividing Columbia is a terrible idea. If each school were forced to survive solely on its own revenue, the outcome would be immediate institutional collapse for some schools, and then long-term decline for everyone else.

“Cross-subsidy” may sound like a dirty word in some circles, but it is the quiet engine behind every great research university. The strategic redistribution of capital across schools and faculties is a feature, not a flaw. High-performing institutions thrive not by isolating their parts, but by managing their interdependence wisely.

There’s a reason Caltech, Rockefeller, and Amherst, however exceptional, don’t occupy the same cultural or global position as the Ivy Plus. The defining innovation of the American university system was the 19th-century fusion of the English residential college with the German research university. What emerged was an intellectual and reputational flywheel: teaching, research, and professional training all amplify one another. That’s what made American universities the envy of the world.

Perhaps most importantly the undergraduate experience—particularly the broad intellectual foundation provided by Columbia’s celebrated Core Curriculum, which is overwhelmingly staffed by the Humanities and Social Sciences—is central to what makes Columbia, and American universities more broadly, exceptional. Unlike systems in other countries that narrow students’ academic focus early, the American model prioritizes breadth before specialization. That breadth is a competitive advantage. Whatever path a student ultimately pursues, the “Arts of reasoning exactly, of writing correctly, and speaking eloquently” in the pursuit of a “a serious, virtuous, and industrious Course of Life” (which our first President Samuel Johnson described in his May 31, 1754 advertisement on the beginning of instruction at King’s College) is indispensable. Preserving that breadth—including in fields that may be economic loss leaders—is wholly worthwhile, if not foundational.

This thought experiment also surfaced something more human: the growing distance between parts of the university that no longer speak the same language. One faculty member wrote in:

“The schools have drifted apart so much that they do not really understand each other. Humanities faculty believe that biomedical researchers agonize for NIH funding because it pays their bloated salaries, whereas faculty from the medical school view humanities faculty as ‘teachers with guaranteed salaries and nothing to worry about.’”

Building mutual understanding of the roles, pressures, and trade-offs each of us navigate should be a high institutional priority. In their siloed existence, some faculty have come to mistake their insulation for independence, and forgotten that their salaries, offices, and graduate programs are quietly and indirectly sustained by colleagues working in fields with vastly different funding models and external pressures. The infrastructure that sustains unfettered inquiry in one part of the university often rests on the tightly fettered compliance requirements of another. Our job now is to preserve what makes Columbia—united and undivided—more than the sum of its parts.

And because this analysis may ruffle feathers, let us be perfectly clear:

• We believe private-sector financial models should generally not govern how universities are assessed.
• We believe a university’s core mission is the creation and dissemination of knowledge, not revenue generation. Profit margins should not determine how to allocate resources, or what fields are worth studying.
• We believe different schools will naturally yield different economic outcomes, and that thoughtful cross-subsidization is not only defensible, but essential.
• Lastly, we believe in fiscal reality. Not because it’s virtuous, but because vendors, creditors, and payroll processors tend not to accept vibes.

Omissions

An alert reader pointed out that in the category of shrinking the enterprise—in addition to the School of Library Service and College of Pharmaceutical Sciences—Columbia also closed its School of Optometry in 1956. A group of optometrists and philanthropists came together to form the Optometric Center of New York to fill the gap, which eventually evolved into the SUNY College of Optometry. We regret the omission.

Appendix: Key assumptions

Here are the key assumptions informing the analysis:

• Excluded patient care and auxiliary operations (housing, dining, etc.), since those function as standalone business units.
• Excluded depreciation, a non-cash item, in order to approximate something closer to cash costs.
• Reclassified financial aid: although US GAAP treats it as a tuition “discount” and therefore folded into net revenue, we broke it out as an explicit expense to reflect its scale.
• Allocated all government grants and other educational and research activities (patent income) to Science & Engineering, acknowledging that other schools receive some, but at much lower levels.
• Divided operations & maintenance, institutional support, interest payments, and endowment income pro rata by faculty headcount. This isn’t fully accurate—especially since restricted endowments tend to be concentrated in the wealthier schools—but it’s a starting point.
• Counted only the 626 tenured and tenure-track faculty at CUIMC in cost and revenue allocations based on faculty headcount, assuming the ~2,400 other faculty (mostly clinical) are covered by patient care revenue. This may understate costs, as at least one tenured faculty member neither teaches nor conducts research.
• Allocated philanthropic gifts pro rata by enrolled students per school, which also isn’t fully right due to the differential economic outcomes of the schools.
• Divided tuition revenue from CC, GS, and GSAS between Arts & Humanities and Science & Engineering using OPIR’s major breakout and PhD distribution data. We assumed Master’s students in GSAS follow a similar pattern, which may not be true. Where necessary (e.g. computer science major) we allocated tuition revenue to SEAS.
• Assumed these June 30, 2024 numbers still hold true. Columbia’s financial position has likely deteriorated since then given the funding cuts.
• Assumed overhead will remain constant and cleanly subdivided. In reality, it will grow due to duplication and loss of economies of scale, thereby rendering these numbers even worse.
• Ignored Columbia’s internal “tax” system (cross-subsidies among schools), since it’s not well-documented publicly. Our goal was to assess standalone viability.

News Roundup

– July 3, 2025. The WSJ reports that the Trump administration has pushed back a meeting for a panel that normally convenes in July, to October. The group in question is a panel that votes to reapprove (or not) the accreditors that uphold (or not) the accreditation for many American universities, including Columbia’s. Between July and October, six of the 18 panelists will be replaced. It is unclear whether this move was strategic on behalf of the administration to hopefully use the turnover in its favor to push or advance a certain agenda. Trump has referred to accreditation as his “secret weapon” to push for education overhaul among American universities and colleges. 

– July 3, 2025. The Washington Free Beacon wrote a story about the odd statement of an anonymous group called the “Columbia Faculty and Staff Alliance” published a statement on the Substack of another anonymous group called “Rise Up, Columbia.” The statement alleges that then Trustee Co-Chair Claire Shipman’s insensitive remarks were “leaked” to the press. In reality, they were statements provided by the University to Congress under subpoena and then publicly released on the House Committee’s website. One might question the timing of the release, but by definition it wasn’t a “leak.”

– July 3, 2025. The NYT reports that the current Democratic candidate running for NYC mayor, Zohran Mamdani, checked the Asian and “Black or African American” boxes on his Columbia college application. He was born in Uganda and is of entirely Indian descent, and not yet an American citizen at the time of his application. He said in his defense that he “doesn’t consider himself Black but said the application didn’t allow for the complexity of his background,” saying, “Most college applications don’t have a box for Indian-Ugandans, so I checked multiple boxes trying to capture the fullness of my background.” He was not admitted to Columbia. 

– July 2, 2025. The WSJ reports that Republican congresswoman Elise Stefanik called for Claire Shipman to relinquish her role as Columbia’s acting president this week after text messages were leaked in which Shipman put down a member of the board of trustees who happened to be Jewish. On Wednesday, Shipman published an apology letter to members of the Columbia community for these messages, writing, “The things I said in a moment of frustration and stress were wrong. They do not reflect how I feel. I have apologized directly to the person named in my texts, and I am apologizing now to you.”

– July 1, 2025. The Yale Daily News reported that Yale has enacted a 90-day hiring freeze, reduced non-salary expenses by 5%, delayed construction projects, and lowered salary increases in response to potential financial strain. The move comes as Congress passed steep increases to the endowment tax rate, which would rise to 8% for Yale under a new tiered system. While the freeze excludes grant-funded and student roles, university leaders warn further cuts may follow depending on legislative outcomes. 

– July 1, 2025. The NYT reported that Columbia will be spending $9 million to settle a lawsuit over US News & World Report rankings. Students filed the suit alleging they felt “overcharged for their education” due to false information that Columbia had supposedly used to up its spot on the rankings list in 2022. The US News & World Report rankings are an important factor in driving college application numbers for American schools. Seeing some discrepancies, Michael Thaddeus, a mathematician from Columbia, wrote a blog post describing his findings and explanations. Columbia subsequently fell to number 18 and then the following year declined to participate at all. 

– July 1, 2025. The NYT reports that Penn has agreed to limit how much transgender athletes can compete on its school teams in a deal made with the Trump administration, deciding that transgender women are not allowed any further to participate on Penn sports teams. The federal government also reported that Penn promised to “adopt biology-based definitions for the words ‘male’ and ‘female’” which align with the administration’s interpretation of Title IX. The agreement stemmed from a civil rights investigation by the Dept. of Education into the participation of a transgender woman on Penn’s swimming team, Lia Thomas; the Dept. of Education said Penn’s supporting the swimmer “had violated the law governing sex discrimination in most educational settings.”

– July 1, 2025. The NYT reports that last week’s cyberattack at Columbia seems to have had a political motivation. The goal appears to have been “furthering a political agenda” to see if Columbia still used affirmative action in its admissions process, despite the ruled illegality of the practice by the Supreme Court in 2023. The school hired a cyber-forensics company which said the hacker seemed to be “highly sophisticated and targeted in its theft of documents.” The school has not yet appraised the full extent of the data theft. The hacker did take at least 1.6 gigabytes of data dating back decades and “representing 2.5 million student applications to Columbia.”

– June 30, 2025. The NYT published an op-ed by Timothy Heaphy, an attorney in private practice who was the university counsel at UVA from 2018 to 2022. He articulated that he would have advised James Ryan, UVA president who just resigned under pressure from Trump, had he been a client, to challenge “what I believe to be a false allegation that the university’s policies are unlawful,” referring to certain DEI initiatives Ryan had supported. He further explains that the law “does not prevent federal contractors, such as universities, from pursuing the goal of creating a diverse community, one that ensures all individuals can participate in the learning environment regardless of race, ethnicity, gender, sexual orientation, national origin or political ideology.