Frustrated with how elite colleges are run, a group of wealthy billionaires is coming together to support a brand-new school in Texas called the University of Austin (UATX). This school, which has only 92 students, has already raised about $200 million from high-profile backers like trader Jeff Yass, real estate developer Harlan Crow, and investor Len Blavatnik.

Crow, a well-known donor to the Republican Party, was one of the first supporters of UATX. He believes many universities today ...