A Successful Visa Mill, by One Standard, Is Three Times Richer than Harvard

It may be hard to believe, but there's a visa mill on the West Coast, Northwestern Polytechnic University (NPU), that is, by one (admittedly obscure) standard, three times as rich as Harvard University.

NPU is in Fremont, Calif., has a nearly 100-percent F-1 (foreign) student body, and the process by which it became accredited a few years ago was the subject of devastating expose by BuzzFeed News entitled "The college that abolished the F and raked in the cash".

So how could a lightly regarded institution like NPU wind up seeming to be richer than Harvard, probably our best-endowed major university?

Well, we are not talking about the total assets of the two institutions, but a measure of how long each place could finance its operations if neither had any tuition payments, gifts, or investment income. One gets this measure by looking at the Forms 990 both entities file with the IRS, a sort of non-profit 1040, and comparing the total annual expenses to the total assets of each organization.

We now enter the counter-factual world and ask how long Harvard and NPU would be able to finance operations if they had no tuition payments, no gifts, and no access to investment income.

Clearly Harvard has more in investments than NPU. However, when you do the math you will find that Harvard could run for 9.2 years without income, but the nearly unknown NPU could operate as it did in 2017 without income for 28 years!

NPU does not spend much on its faculty, has run a highly profitable operation for years, and placed its money in mutual funds that did nicely for it.

Although its total revenue fell from $72.8 million in calendar year 2016 to $10.7 million in 2017, NPU had such a cushion that while its profits (revenue less expenses) dropped from $53.6 million in 2016 to $3.1 million in 2017, its assets (helped by a rising stock market) rose from $180.8 million to $214.2 million.

The IRS views both Harvard and NPU as non-profit entities.

NPU is not only rich, it is also terribly well insured. While other universities typically devote about 0.5 percent of their expenditures on insurance — it is 0.22 for Harvard — is 8 percent for NPU. This is a huge difference, and it is unknown why its insurance costs are so high. IRS should be curious about this variable.

To get some perspective on both of these measures, we constructed a rough-and-ready sampling of other colleges and universities, picking 13 of them at random, and then examining their assets/expenses ratios and their insurance/expense ratios; only one of the other universities, Sacred Heart University in Fairfield, Conn., devoted more than 1 percent (and just barely) of its total expenses to insurance, as the table that follows shows. No university had an assets/expenses ratio as healthy as either Harvard or NPU.

Though some other visa mills have prospered, obscenely in some cases, no one other than NPU has collected and retained so much loot, and certainly none has anywhere nearly as much heavily insured loot.