Brown University raising $120M to eliminate all student loans | Hacker News Reader

Brown University raising $120M to eliminate all student loans

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238 pointschampagnepapi151 comments

I feel somewhat ambivalent about this. I'm glad that Brown wants to eliminate student debt, and I'm glad that low income students at ivies often pay no tuition. However, this doesn't change their essential model, which is to enroll a very small number of undergrads[1], deny admission to the vast majority of applicants, and generally lean toward affluent students.

Compare this with an elite public research university like UC Irvine or UC San Diego. I didn't say Berkeley or UCLA on purpose, I said UCI and UCSD because people often aren't aware of what research powerhouses mid tier UCs really are, that they produce far more groundbreaking research than many of the exalted ivies. In addition, these universities enroll a much larger number of undergraduates, and a much higher percentage of low income students. The result is that these institutions do far more for the US and the world - they produce exceptionally valuable research, and act as an engine for social mobility on a large scale. UCLA, for example, enrolls more low income students than the entire Ivy League combined. I believe this is true of several UC campuses, and until very recently, it was true of Berkeley as well.

In short, I don't want to see the ivies patting themselves on the back too much here for offering a sweet deal to low income students. It's a fine enough thing in itself, but let's be clear - the elite private college system is structured to ensure that the absolute number of low income students will always be very low. I'd be more impressed to hear that an ivy is scaling up like UC Irvine and offering a good deal to a high percentage of low income students, than to hear they're remaining tiny, and using a massive endowment to shower benefits on a minuscule number.

[1] Interestingly, Berkeley and Harvard enroll similar numbers of graduate students, who are often very profitable as low paid skilled labor for research labs. The divergence is at the undergraduate level.

I can confirm the general profile of undergraduate students at UC Irvine. I graduated in 2004 as a first-generation high school/college graduate and went on for an advanced degree. A substantial number of my classmates were also the same. I believe in the UC because, for the most part, it maintains its mission of providing Californians access to higher education if you want it.

I recall the rule (not sure if it's still the same) that if you are within the top 10% of your high school class, you will be admitted to a UC campus so long as you meet a minimum SAT score.

This is true except for Berkeley and UCLA. They require you to submit separate applications (at the very least at some high schools, it could be that the elite high schools in California are allowed admittance into any UC).

> I recall the rule (not sure if it's still the same) that if you are within the top 10% of your high school class, you will be admitted to a UC campus so long as you meet a minimum SAT score.

If you are in the top 9% of all California graduates, and you are not accepted at any of the campuses you applied to, you will be offered a space at some other UC campus, if there is space available. [0]

If you are in the top 9% of your California high school class, that's a competitive factor in admissions but not a guarantee of admission. [1]

[0] http://admission.universityofcalifornia.edu/freshman/califor...

[1] http://admission.universityofcalifornia.edu/freshman/califor...

Brown (and most likely all other Ivies) is need-blind (except for international students).

So, unless you think they are lying, your point doesn't stand on limiting low-income students. You point on size of college is an altogether different issue.

"Beginning with the Class of 2007, Brown implemented its need-blind admission policy. Need-blind admission simply means that an applicant's ability to pay for their education will not be a factor in the admission decision"

https://www.brown.edu/about/administration/financial-aid/nee...

I want to start by saying that it's awesome that Brown, Cornell, Yale, and whatever other Ivies are need-blind. That's awesome, and I applaud them for it.

That said, economic status and academic performance correlate closely. A college that's very selective will necessarily filter out a lot of lower-income kids purely because it's hard to do extra-curriculars if you need to work after school and/or if you can't afford them, it's hard to get good grades if you're worried about whether you get to eat this week, etc.

My point being that Brown can be both need blind and not have a lot of lower-income kids there.

>My point being that Brown can be both need blind and not have a lot of lower-income kids there.

This is a very hard problem to solve for a university alone. In India, there is affirmative action AKA "reservation" and trust me that system has it's own perils. I still think meritocracy is the way to go while having systems developed by the govt. to help the under privileged kids meet that bar.

Why should a school select students based on extra-curriculars? Why is "working at a job" not considered an extra-curricular?

Why should a college even choose the highest academic performers? It's an educational institution, not a contest.

At the end of the day, what is a college optimizing for, and why?

Colleges could be selecting for students who the college can provide the most value to, or which students need that college the most, or which students show the most potential for post-college success by the college's metrics.

or which students show the most potential for post-college success by the college's metrics

I think this is what they're doing, and it's really hard to do that for a 17 or 18 year old kid beyond grades, test scores, and extra-curriculars. What would you suggest?

>Why should a college even choose the highest academic performers? It's an educational institution, not a contest.

It will inherently be a contest as long as admission rates are below 100% and schools' reputations are non-uniform. If you shake up admission criteria to be more holistic and less weighted on academic performance, applicants will refocus their attention and compete to satisfy the new set of criteria (at least those within their control).

I definitely wouldn't argue that colleges are optimizing for greatest societal benefit, but it would take a lot to truly align their self-interest with a selection process that doesn't heavily consider academic performance (particularly for private universities).

Still don't understand. By expanding the pool of admissible students (including those with other attributes than academic), don't they increase their rates?

This is a little beside my point, which was that competition will remain as long as schools remain selective ("selective" defined for the sake of this argument as accepting less than 100% of applicants). Even if there was a broad increase in admission rates, people would still compete to be part of the X% accepted to "top" schools.

To address your point, though, I'll assume your use of "admissible" is synonymous with "admitted" students. An increase in rates would require that the number of admitted students increase relative to the size of the applicant pool. If the applicant pool increases with the number of admitted students there isn't necessarily an increase in the rate of admission depending on the relative increase in the size of the applicant pool. If we instead define "admissible" as meeting criteria for admission but not necessarily being admitted, I wouldn't be surprised to see a corresponding increase in admission standards to maintain existing admission rates. Interested to see if anybody has evidence to support or refute this based on historical trends in admission criteria (GPA, SAT, etc.) vs. admission rates.

The college system as a whole does best when it functions as a matching problem for curricular difficulty. Past academic performance is a noisy predictor of future academic performance. Students admitted in the sciences at schools too hard for them transfer into humanities and social sciences at disproportionately high rates. Breaking the system inhibits the ability to provide the most learning overall by ensuring everyone can be challenged appropriately.

Actually, this has stopped being true in at least some sense. All Universities that take a part in the coalition application are need aware at least for students applying in that way.

note that Brown was decade(s) later than other Ivies in implementing need-blind admission.

need-blind is great, but it's only useful if it's paired with a commitment to make attendance affordable -- which other Ivies have done, and Brown is now trying to do.

>So, unless you think they are lying, your point doesn't stand on limiting low-income students.

You missed the point. Poor kids in general don't go to Math & Science high schools, or high schools that offer college level courses in Calculus I-III, Number Theory, Abstract Algebra, Differential Equations, Linear Algebra, 1-2 semesters worth of programming, Data Structures, etc. These kids don't have have access to private tutors to ensure they ace their SATs, SAT Subjects, ACTs etc. They aren't enrolling in multiple ECs and they don't have teachers with PhDs writing them letters of recommendation. These kids don't have parents that went to colleges and don't have the resources handed to them as the kids that are getting into Brown, Harvard, Princeton, Stanford etc. If you look at the lower level high schools in America, they barely give any of their kids any advantage. They actually put them at a major disadvantage compared to the elite high schools.

It's great elite colleges have these needed based programs. But by virtue of their admissions criteria they are excluding lower income students on a vast scale.

In addition to some other excellent points made on this subthread it's worth adding that matriculation is structurally need-biased, in that attendance requires forgoing a full-time income for 4 years, while also providing for living expenses.

https://www.collegetransitions.com/blog/college-legacy/

> A study of thirty elite colleges, found that primary legacy students are an astonishing 45% more likely to get into a highly selective college or university than a non-legacy. Secondary legacies receive a lesser pick-me-up of 13%. One study revealed that being a legacy was equivalent in admissions value to a 160 point gain on the SATs (on a 1600 point scale).

The end result of the legacy advantage can be seen on elite college campuses across the country. At Harvard, one-third of students offered admission have Crimson lineage. Fellow Ivies, The University of Pennsylvania and Brown also admit upwards of 33% of legacies, double their overall admit rate. Princeton, with its minuscule 7% admissions rate, has been known to admit over 40% of legacy candidates.

We probably disagree about the extent to which need blind admissions, on its own, addresses the problem of low enrollment from income students.

One factor here is that high achieving, low income students apparently are often unaware of the amount of financial aid available to them at elite private universities. They will often opt for a local state university, even though they would likely get a better financial aid package from the private.

https://www.theatlantic.com/politics/archive/2013/12/why-few...

"The reasons are varied, but a lack of finances is critical. Tuition can be prohibitively expensive. Elite schools often offer scholarships to low-income kids, but the schools have done a bad job of letting poor students know such assistance is available.

Professor Caroline Hoxby from Stanford University and other researchers found in a different study that many simply don't apply to elite schools because of something as seemingly minor as not having the application fee. There are fee waivers but, again, many don't know that."

On a related note, about half of UC students pay no tuition (this isn't an accounting trick where most of the costs are hidden "fees" - there are a few, but "no tuition" is what it sounds like in this case).

Another factor in the higher numbers of low income students at UCLA and Berkeley (as well as other UC's) is that UC takes a lot of community college transfers. This keeps costs low, and also may help bridge the "awareness" gap by making high talent low income students aware of the possibility of attending UCLA or UCB.

https://www.nytimes.com/2015/09/17/upshot/californias-univer...

"Throughout, the University of California took deliberate steps to attract students of modest means. It kept tuition low and did far more to recruit community-college transfers than most elite state universities. The transfer pipeline is crucial, because many highly qualified low-income students— unaware of how much financial aid is available at some four-year colleges — first enroll at a local community college, where published tuition tends to be low."

UCLA is actually important to note, as from a NYTimes study, they turn the largest population of students who grew up in the bottom 20% to people who are in the top 20% of income earners.

Do you have a source? this is really interesting, would love to read more.

I believe this is the study that's being referred to. It's not by the NYT but they wrote about research by economist Raj Chetty, of Stanford, and others.

https://www.nytimes.com/2017/01/18/opinion/sunday/americas-g...

Not that loan-free educations are bad, but why is Brown raising $120M from alumni and the like, rather than lowering their tuition by $120M?

The student loan crisis is only a crisis because Universities (lead by the Ivy League and similarly elite private colleges) are charging exorbitant prices for tuition, room, and board.

This isn't charity or benevolent. This is just bilking a different class of people.

Efforts to reduce the cost of tuition, rather than shift the cost burden to different people, are the real humanitarian work here.

Here's a story from 2013 on Texas's efforts to create $10,000 Bachelor's degrees. https://www.texastribune.org/2013/01/30/guide-getting-one-te...

You still have to pay market rate for professors, executives, maintenance, etc, if you want to stay relevant.

You can't just decide to reduce your income and expect nothing else to change. They're changing where their getting the income from, probably with the idea that former students of Brown who are now doing very well, will be willing to pay it forward to a new student who is in a similar position as they used to be.

The administrative costs have been the most sizable portion of cost increases for universities over the last few decades. The costs for teaching faculty have decreased, probably due to the use of adjunct professors (who don't get tenure nor benefits).

The exploding cost of education over the last generation doesn't boil down to an increase in teaching or even research staff costs. These costs are stable, largely thanks to the very low cost of junior academics.

In the US, "administration staff" (everyone else) has blown up by 500% or more, proportionally. There have also been increases in non staff related costs. University' are fancier, more expensive and more income focused.

What the OP is saying is that education has become unaffordable because it has become expensive, not because of how it is financed. Fixing Brown students problem with donor financing is great for Brown students, but does not scale even if is sustainable at brown.

Whether through donors, loans, public financing or parental savings, we cannot afford to give everyone a $150k education. Any solution that builds on the premise that we can is an elitist (or at least elite) model.

This is true of many things, but seems to be politically unpopular to notice. The right will claim that prices are what prices are and cannot be changed, and the left will claim it's all in resource allocation.

Well... It's not that financing and cost are unrelated. Economics exists. I (I wrote the comment) do think that prices and costs rose in response to more available money.

Anyway, I think that these days the left and right may have changed seats in this regard. The left wants more price/cost control and the centre (centre-right and left, but more right) is talking about resource allocation, in practice defending the market driven system. The right hasn't resolved to a consistent position recently.

I continue to be very curious where all that "administration staff" spending is going. I grew up in the higher education sphere (both parents professors), and I work as a staff member at a university now. What I see here, at least, is a near-crippling lack of care for the staff, such that morale is constantly low and turnover is high.

So where, exactly, is all that extra spending really going? Is it going to six or seven extra deans and associate deans? (We have a bunch of people with "associate dean" or similar in their titles, but some of them are actually fairly junior staff members, and my understanding, incomplete as it is, is that their pay reflects that, rather than being what you'd expect for someone with that title.) Is it going to people who are managing the ever-growing presence of technology in the classroom and throughout the institution? That would actually make some sense, as it's a thing that's been growing at around the same time as the apparent increase in spending on staff/admin.

But in general, based on the limited breakdowns I've seen, I'm still puzzled as to where all this extra money is going, as it seems like most of it is not, in fact, going to inflated salaries for the top administrators (though some of it is), and most of what I've actually seen doesn't support the idea that there are massively more people in administration than are actually needed to support the students. The only way that could be true, based on my experience, is if a huge percentage of them (many more than in previous generations) are utterly incompetent, and pulling their weight so poorly that it takes half the time from the competent people just to keep everything moving. While that's not impossible, it seems implausible that such a significant shift could have occurred so quickly.

> ...we cannot afford to give everyone a $150k education. Any solution that builds on the premise that we can is an elitist (or at least elite) model.

I think that calling it elitist is jumping on a bandwagon of derision for that term, when what it should really be called is "unrealistic," "impractical," or just "stupid." In fact, if anything, it's as anti-elitist as anything can be—it's trying to spread the education to everyone, rather than reserving it to the elite purely based on the inconvenient fact that we don't have enough money in our economy to spend that much on everyone.

I was also in higher education; I think it is a problem of lumping different categories of schools, changing roles, and of people having a political axe to grind :) I'd be very surprised if admin costs at Ivy League universities, or even state schools have changed much ...

You work at a university. Can you think of even one time that someone has been let go for incompetence? I've never seen it happen, and I've seen incompetence so blatant that it's undeniable.

In business, if two companies merge, the redundant positions are eliminated. In a university, if two schools or departments merge, everyone stays and a bunch of new titles are created.

>we cannot afford to give everyone a $150k education.

We most certainly can, easily, we just choose not to.

We could bomb a few less hospitals a year and pay for every single American to go to college for free. We could make our corporations pay more than zero taxes and do the same.

But you are right about the skyrocketing costs, colleges have bloated massively and for really no reason other than that they have begun to be run as businesses rather than as public-focused academic enterprises.

What's causing the explosion in education costs is that states systematically decreased their financial support for education in the last 30-40 years.

> You still have to pay market rate for professors, executives, maintenance, etc, if you want to stay relevant.

I'll venture that it's the executives who are pulling in the big bucks. Looking at the glassdoor numbers, profs are peaking at under $200k, the vast majority well under $100k. Contrast that with Comms directors making $250k.

>>Profs are peaking at under $200k, the vast majority well under $100k. Contrast that with Comms directors making $250k.

Comms directors provide more immediate returns, namely fundraising and spinning. However, top professors can write their ticket just to say they're there and earn a fortune on the side.

The actual problem is people getting into debt without reasonable expectation of paying it, just wishful thinking.

I'm somewhat sympathetic to this position, but that's an unnecessarily extreme way of stating it. "Reasonable" is a weasel word. If I study for 4 years for a job in a lucrative, degree-requiring field with very high jobs demand when I matriculate, and I go into debt to study, is that "reasonable"? What if that field encounters a sea change on the year I graduate, or the economy crashes, leaving me with bleak prospects and debt? Does that make what I did "wishful thinking"?

It seems like that argument easily ends up in the "educations that require significant debt are always useless" position, which is false. Like, sure, it's easy to make fun of literature students who end up $200k in the whole with no marketable skills and no job prospects. But they are just a small fraction of the whole picture. A higher ed degree is by far the highest-chance-of-success way for a lot of people to make it financially (whether or not it should be is a separate discussion), and a lot of positions require degrees for good reasons.

> It seems like that argument easily ends up in the "educations that require significant debt are always useless" position, which is false.

That's not my position.

> "Reasonable" is a weasel word.

You can have a reasonable definition of what is reasonable ;-) It just has to do with the ammount of risk you're willing to take, yes, it involves personal risk.

But you can see, for example, in such and such people that get a degree are >70% unemployed or working in a different area that has nothing to do with it. Then well perhaps it's not a good choice if I don't have the liberty to do it just for the sake of it, without expecting money in return.

Some other career choices probably have better expected outcomes for the average Joe. So maybe if you need the money, chose that.

The bottom line is: it's just silly to live as if you were rich and but then after complain you don't have the money for it.

If your pulling in ~10,000$ per person in tuition, and the average person takes 5 classes with a class size of 30 that's. 60,000$ per professor per year if they teach 4 classes, 75,000$ per professor if they teach 5 and 90k & 6 classes before expenses per class. So, the only way for that to work out is some other subsidies.

However, lectures allow you to use TA's to more cheaply expand class sizes and might make it possible at the undergrad level.

But Brown's tuition for out of state students is just under $50,000 per year per student.

Does that mean they could be paying those professors $300,000?

Aren't there other expenses like maintaining the campus and paying for journal subscriptions and research equipment?

are you just listing off the things you think a university spends money on?

Brown is private, so there is no distinction for out of state students.

That's nominally 50k/student they can then offer scholarships so it's possibly nobody actually pays that much.

Further, just having a teacher without a classroom is not going to get you very far. Still, assuming the average student pays 1/2 that much per year they can probably cut the costs significantly.

Why even use TAs for lectures? There's YouTube. There's automated software for quizzes and testing. Textbooks should be open source documentation, printed-on-demand.

I'm not saying remove the human element entirely, but there's a lot of low hanging fruit in education to consider where technological automation can help improve the productivity of educators.

Check out how Georgia Institute of Technology is offering a real CS Master's Degree for a fraction of the cost using similar stuff: https://www.omscs.gatech.edu/

I'm not saying remove the human element entirely, but there's a lot of low hanging fruit in education to consider where technological automation can help improve the productivity of educators.

This x1000. With all the improvement in educational technology, it's weird that the gold standard of elite education apparently remains the lecture.

I am reminded of the quote: College is a place where a professor’s lecture notes go straight to the students’ lecture notes, without passing through the brains of either.

Part of the issue is that college-as-elite-networking-venue needs to remain scarce, by definition, if it is to retain its value. If everyone can "go to Harvard" (through online delivery, enhanced ed-tech, automation, etc) then the scarcity is lessened. When you go to an elite college, you don't just get an education, you get association with a brand that, you hope, retains and increases in value.

>improvement in educational technology

I'd like to point out that there's also plenty of utterly crappy educational technology that only exists to nickel and dime students for licenses. See MyMathLab.

> it's weird that the gold standard of elite education apparently remains the lecture.

What makes one a good prof/teacher/lecturer for a given department, subject matter or set of students may not make one a good prof/teacher/lecturer for a different department, subject matter or set of students.

The quality of an instructor as a prof/teacher/lecturer for a given department, subject matter or set of students implies nothing about the their quality in any of those attributes for the same setting or the same attribute if the department, subject matter or set of students changes.

I recall having a discussion with another student who had very similar abilities and interests. We agreed about the quality of the profs we had in common except for one where one of us thought he was a great teacher and lecturer but terrible at the rest of being a prof and the other thought he did a great job as a prof but was a terrible teacher/lecturer.

Their is some evidence this simply does not work as well. MOOC's demonstrate you can perhaps get ~80% of the benefit of an introductory lecture online, but they don't carry as well into more interactive styles.

Really face time with a professor is not directly the huge cost you might think. Class participation and helping students during office hours don't scale very well. On top of that it's much simpler to cheat in an online only environment.

Honestly, I think High school is probably a better place for this kind of automation. Setting up a rotation where you have say both a small and double sized classroom seems very possible.

You can have a professor teach more than one class too. Then your math changes significantly.

All professors take many more than 1 class?!

In the UK a professor might take 3-6 lectures and 1-3 classes a week, and they're often staffed by masters students.

Was editing 60k is teaching 4 classes with students paying 10k over 4 years. 90k for 6 classes but that's before expenses such as administration, the buildings etc.

It might be possible to nominally get that number but only if your hiding other costs.

I recently met an American here in Europe that mostly grew up here the last few years who wanted to go to NA (more specifically Toronto) for university when she could basically enrol here in a good university for a fraction of the cost. I pay less than a gran every year for my software engineering master's degree and can't fathom someone going to a different country knowing you're gonna be in debt for a large portion of your life. I'd rather study here and move to Canada after than study there and get a huge ass debt piled up.

I really don't get how these universities manage their cashflow. With such an exorbitant amount of cash you can basically put people on Mars for all I know.

Ivy League schools have massive endowments, which are essentially huge investment funds. They employ people to invest their money.

Canadians university has far lower tuition than the US equivalent. It's also easier to immigrate when you have a Canadian degree so the story might be a bit different for Canada.

Tuition is far lower if you're a Canadian citizen or resident. If you're foreign, it costs $25,000+ per year which isn't that different from public US universities.

I went to UWaterloo CS co-op as an international student and it was less than CA$25000/year all-inclusive and before the money I made from co-op. I am pretty sure comparable education in US costs far more than that.

The trick is that most people don't pay full tuition[1]. It's like hospital prices: most people don't pay the sticker price and those who do are subsidizing those who don't.

[1]http://time.com/money/4777909/private-college-scholarships-2...

Or they're taking out student loans that they'll have no realistic ability to repay.

> This isn't charity or benevolent. This is just bilking a different class of people.

Voluntarily giving some cash to a school endowment is not getting "bilked".

Brown has traditionally been one of the most expensive colleges in America for decades. The "Boys Club" of Brown is through the roof. This is just a weird story to come from Brown.

Because they still want people that can afford to pay $50k/year to pay it. Lowering tuition lowers it for everyone. If your parents make $300k+/year, then you'll still be paying full tuition. But as their income is lower, currently you'll get some need-based financial aid. The problem is that this aid is a combination of "scholarship" and "loans". The goal here is to remove the loan component.

The problem still is that middle-class families get stuck in a gray zone. I went to Brown, and my parents made enough (~$110k) that I didn't get financial aid but they also couldn't pay $40k/year.

While the process sounds good in theory there is an ever increasing gap that people fall into between parents making too much money and parents not making enough. I'm bias because I fell right into the middle of the gap - my parents inherited an illiquid share of real estate that on paper is worth about a million dollars, in reality after taxes it yields maybe 40k/yr that my parents live off of (60+, no college). Because of this I was denied any form of financial aid and had to fend for myself.

Did you explain this to the financial aid office? Generally, elite schools are in the business of finding elite students first and then dealing with FA second. But you have to make your situation clear to them. They offered you admission or you wouldn't be dealing with FA. So they wanted you. But FA is a negotiation even especially if you're in the gap and then you have to negotiate hard because otherwise you pay sticker.

Often financial aid is given out to very needy students (don't even have anything as collateral for loan), and there's sometimes a quota.

There's no collateral on a student loan.

None is necessary since they are both Federally guaranteed and they can’t be discharged by bankruptcy (which is the epitome of stupidity). Indeed, that ‘bargain’ is why Brown is doing this thing.

No collateral is necessary for student debt since they can come after anything you or your cosigners have.

Someone will have to explain to me what is special about this debt that it gets this special treatment.

> None is necessary since they are both Federally guaranteed and they can’t be discharged by bankruptcy (which is the epitome of stupidity). Indeed, that ‘bargain’ is why Brown is doing this thing.

Just because they can't be discharged in bankruptcy doesn't they're actually repaid. Student loans can and do default - an average rate of 15% a few years ago, though some schools have students that default at more than twice that rate.

External guarantees on loans (in this case federal guarantees) doesn't address the same issue that collateral is typical used for: namely, it doesn't solve the moral hazard problem.

(It's not that Brown has solved the moral hazard problem itself; it's that Brown's able to take on that risk themselves, because it's an incredibly selective, incredibly competitive, and fairly small[0] school).

[0] We're talking specifically about undergraduates

> Just because they can't be discharged in bankruptcy doesn't they're actually repaid.

Exactly. So instead that’s an albatross to be hung around a young person’s neck for all of eternity. Bankruptcy would share the burden between lender and borrower.

What we have now is a system where loans are Federally guaranteed and then not dischargeable through bankruptcy. That leads to $100k cooking schools that promise to turn you into a pro-chef, just sign here, here and here and you can even get a Federally guaranteed loan, sign here.

Yup, and it leads to this perverse economic effect of middle class families that scrape together enough wealth to make a very positive situation, then get it all pulled back pretty hard because of outrageous tuition fees. Not that low-income students have it easy either. Sometimes it just feels like the rules of our society are lined up to keep the middle and lower classes in their place instead of supporting general prosperity.

That prosperity would detract from the wealth of the powerful, so they have incentive to avoid that.

Education is one of the biggest scams and it’s run 99% by the upper middle class. At elite universities, it’s upper middle class people fleecing upper middle class peoplle. At less elite universities, it’s upper middle class people fleecing middle and lower class people.

Yep. My wife would like to be stay-at-home-mom, but she works so we can save $2k/month for two kids college expenses, currently in elementary school. Goal is to have $160k over next 10 years. So by saving, I'm screwing myself. It's equivalent to another mortgage.

You're not screwing yourself, you're taking responsibility. Financial aid comes with strings as well as a highly invasive personal finance anal exam called FAFSA (which database I'm sure will get hacked and disclosed at some point, if it's hasn't already, as most other big government databases have).

If you can pay your own way you avoid all that.

That’s mighty puritanical thinking. When a family works their ass off to be denied financial aid and pay full freight for highly inflated university tuition, that’s not what I would call “taking responsibility” that’s just being taken.

College financial aid is just another policy in the pile of progressive taxation and needs-based benefit programs which conspire to enact a near 100% effective marginal tax rate on the middle class.

The gap is real, but parents with a million dollar house who aren't making enough while on retirement? That's most parents except for that huge asset. You're not in the gap in my view.

The difference is that some assets (in retirement accounts) are protected from financial aid inspection and inherited real estate is not. If that seems unfair, it is because it is.

Most parents aren't in retirement at that point, but yes, I see what you mean now. That is unfair.

The truth is that they should evaluate need not based on your parents income, but on their net worth - the price of their home. If you struggled to make ends meet for 15 years at the beginning of your child life but then suddenly started making 200k a year, you likely don't have the savings you need to pay 200k over 4 years to send your kid to college.

>> Because they still want people that can afford to pay $50k/year to pay it.

That's not quite what I was getting at. My question is: Why are they making alumni find the $120M in grants, when they could just forgive the loan directly?

There's nothing that says a lender has to collect on its debt. It can choose to forgive the debt.

So it's possible for Brown to charge $50K/year generally, collect it from the rich kids, and then forgive the debt incurred by the poor kids.

But that's not what they're doing. They're keeping the money, and asking alumni and other charitable institutions to pay them.

> Why are they making alumni find the $120M in grants, when they could just forgive the loan directly?

They still want/need the money.

The loans don't actually come from the school- they are often government-sponsored, though those typically cap out at $12k a year or something. The rest you have to get through private loans, and the school has no way to forgive them- unless they want to write a check to my loan provider.

Today's elite schools offer myriad resources to students that they didn't before. And today's elite schools are therefore able to serve a much more diverse group of students.

I think administrative costs have gone up too much and have space to cut back. But when articles come out saying administrative costs have ballooned 500%, I don't want people to imagine that it's all wasted - most of the new positions represent new services provided to students.

And in anticipation of the argument that "I don't need those services so they shouldn't exist": see arguments for universal healthcare even if it means raising taxes on healthy people. The whole university functions better and achieves its mission better if there is more diversity and if students have more access to services they need. Lowering tuition would be a trade-off, not just trimming fat.

I don't think anyone's saying it's all wasted, and I agree that a university in 2015 is going to offer a lot more to its students in terms of non-academic services than a university of 1985. But it's hard to argue that even half of that 500% is good spending.

- The year I started my undergrad, there a mini-scandal where tuition was raised by over 10% with little warning and it leaked that the school President, having written a heart felt letter about how hard it was cutting costs in these difficult economic times, made over $400k/yr and the college was paying his mortgage. Nearly $600k adjusted for inflation.

- At that same undergrad institution, the career services officer, responsible for finding people jobs (or at least helping), had never held a job outside of that college, and would do little more than putting your resume on Monster for you.

Just two examples from my limited academic experience (undergrad only) at one small liberal arts school nobody's ever heard of. I'm sure the graduate folks here could throw dozens of examples at you of much more egregious things.

> never held a job outside of that college

This happens a lot at universities. They are great places to work if you're OK with an "adequate" salary (with generally very good benefits and time off) and not being held accountable for very much. So you have staff people who have worked there for decades, if not their entire careers. Often entire families (parents and eventually their children) will be working there. Those sorts of people have no understanding of what the "real world" or private sector is like, so the problem of low productivity and low accountability perpetuates itself. It's normal and they don't know anything else.

And it's horrible. At my alma mater this person was in charge of helping kids who were finishing their degrees find gainful employment. Some kids who came from poverty, were getting the first degree in their family, and finally they had a shot at an upper middle class lifestyle. And they're supposed to get advice from some schlub whose entire resume is "B.A., [Liberal Arts School You've Never Heard Of]" then "Career Services Officer, [Same School]"? I think of the ridiculous advice he gave me ("GPA is incredibly important for your resume even 20 years after you graduate" and "Put hobbies and interests on your resume that show you're a well rounded person!") and shudder to think of the nonsense he was telling people who didn't know any better.

Keep in mind that these are Ivy League universities hoping to attract the best students they can in order to boost their prestige.

If Princeton for instance decided to lower tuition fees by cutting down on 'luxuries' like smaller class sizes/ unrestricted enrollments in classes, then they'd lose out on the best students to Harvard or Yale.

So the only way to reduce tuition fees would be to do it across the board at once, but the richer universities have no incentive to do so because they can attract enough full-paying students and have a large enough endowment to pay for everyone else.

That seems... backwards. If the standard of admission remains the same (which is unrelated to cost of attending), lowering prices doesn't decrease the quality of the admitted student body, but _increases_ it. Lowering the cost means that additionally to the students who would be admitted and are capable of affording the school, students who are more qualified but would otherwise _not_ be able to afford attending would then be able to apply and attend. Admissions can only benefit from giving opportunities to a larger body of prospective students. The wealth of a student isn't what gives a school prestige--it's their academic prowess and likelihood of becoming successful later that gives the school a good name.

Wealth of the students family probably has some influence on "likelihood of becoming successful later". Especially if one measures success in how much money people donate to their alma mater.

I don't think you're really disagreeing with the parent comment. In order to remain at a constant level of profitability with a price reduction for all students, universities would have to reduce the benefits given to students (e.g., larger class sizes, fewer building upgrades). This would negatively impact the student's likelihood of becoming successful (like you mentioned), and would potentially cause some high-potential students to switch to other schools.

Brown is trying to get the best of all worlds: let the rich pay full price to maximize income, invest heavily in students to optimize chances of later success, and subsidize education for less wealthy students to keep the applicant pool as large as possible.

Princeton went about it the way Brown is striving to do now: meet 100% of a student's financial need with grants and no loans. You don't need to lower tuition (and hurt "prestige") if you can do this.

> Richer universities have no incentive to do so because they can attract enough full-paying students and have a large enough endowment to pay for everyone else.

From personal experience, this statement is wrong. A lot of my classmates at Princeton were not paying the full sticker price. Princeton also has a need-blind admission process so admissions and financial aid are kept (on paper at least) separate.

> Not that loan-free educations are bad, but why is Brown raising $120M from alumni and the like, rather than lowering their tuition by $120M?

Because the Third Associate Dean of Humanities can't fund their $600k salary with the goodwill from a more reasonable tuition.

Snark aside, it's because the administrators are attacking a symptom - high tuition prices - and not the illness - administrative bloat and universities that are not run by academics, but by Professional Educators who in many cases have never taught a class in their lives, or haven't taught in the past n decades.

Are you sure you put the snark aside?

OK maybe some of the snark was still there, but at least I got rid of the hyperbole :)

If their Humanities Dean gets paid that much, their football coach must be a billionaire from salary alone.

I'm no fan of coaches being the most highly paid public employees in most states by any stretch (especially with the athletes earning at most a free ride and a rubber-stamped business degree), but at least the sports teams are bringing in revenue, and people willingly donate to build a new stadium, etc.

The Humanities Dean isn't a revenue center for the college, and nobody is (knowingly) donating so s/he can get a new office.

Revenue is easy. Anyone can bring in revenue. Uber brings in revenue. The more important question is is the athletic department as a whole even profitable? At Berkeley, the football coaches make $16.3M.

http://www.sfgate.com/bayarea/matier-ross/article/Cal-footba...

The law school deans make $333,847. At the same time, Cal Athletics faces largest debt among all college programs.

https://www1.salary.com/CA/Berkeley/Dean-of-Law-salary.html

https://www.bloomberg.com/news/features/2017-01-04/college-f...

So your humanities deans vs revenue digression is just whataboutism.

Most athletic departments fund not only the football coach's salary but the salaries of the coaches and staff for all the other "non-revenue" sports as well as all the scholarships. The big thing that has developed in the past decade are the conference TV deals such as the Big Ten Network. Schools make a LOT of money from that, as well as from other licensed merchandise, ticket sales, and donations.

If Cal Athletics is in debt, they are doing it wrong.

Athletics salaries and facilities are very visible and often breathtaking, but in general they are not the cause of tuition inflation.

Yes, my alma mater is doing it wrong but the vast majority of athletic departments are also doing it wrong. Although I was a ‘tree’ guy when they spent the seed corn on the stadium upgrade, I do see the point of an elite sports program and ours overall is quite elite. And still Cal is doing it wrong.

According to Bain between 1995 and 2010 universities are proportionately spending significantly less on instruction and more on admin and support, and many of the universities spending is unsustainable. https://news.ycombinator.com/item?id=11337193

This parallels the healthcare sector, where administrative costs have outpaced the cost of actual care. Both are markets heavily distorted by the federal government.

I worry that there's no solution to these problems that won't displace very many workers. One man's cost is another man's salary.

Both are markets heavily distorted by the federal government.

That's one way to look at it. Another way to look at it is that those "markets" are fundamentally distorted by the in-elasticity of demand. People generally need education and healthcare.

Coincidentally, that's the way almost all of the non-US world chooses to look at it.

This is a complete misunderstanding of what is happening in higher education. The increase in tuitions for need-blind schools like Brown is essentially forced donations for the families that can afford to pay. Everyone is already given financial aid to meet whatever their need is. Now, however, some of that is in the form of loans.

Alongside the increase in tuitions has been a massive increase in financial aid. Princeton really kicked this off around 2000 when they started drastically reducing loans and increasing grants, essentially competing for the top talent among lower income students.

Regardless of the validity of your claim I think the answer to your question is why would Brown be incentive to lower tuition to eliminate student loans (lower profits) if they could just ask for it from alumni (same profits and free good PR)?

Brown (and all other Ivy League-ish universities) are non-profit; they do not seek (or have) profit

Most universities are run like a business. They are "non-profit" but essentially they are trying to generate "profits" that raise their endowment. Larger endowments mean more $ per year to spend on faculty, admin/staff, and student services/housing. Having more faculty and better student services/housing helps recruit more and stronger students...

Humphrey: Bernard, you know perfectly well there has to be some way to measure success in the Civil Service. British Leyland measure their success by the size of their profits. Or, to be more accurate, they measure the size of their failure by the size of their losses. But, we don’t have profits and losses. We have to measure our success by the size of our staff and our budget. By definition a big department is more successful than a small one.

Aren't universities charging exorbitant prices because of higly available cheap student credit subsidized by the Government?

My guess is to protect the ability to charge more to those who can ostensibly afford to pay more.

PS: It’s led, not its metallic homonym lead.

Actually ... they are probably NOT charging exorbitant prices for tuition, room and board, when you look at their costs; good education is expensive.

Room and board is about $13K, or slightly more than 1K/month, which seems pretty reasonable.

Rate-card Tuition is 52K, but they have a 7:1 teacher-student ratio ; If you assume each teacher makes 100K/year (not unreasonable for PhDs), that's about 13K just in teacher salaries ... add benefits, offices, etc, and you're at about twice that, so 26K just for faculty; add some for facilities and management, and their cost is probably about 40K/year per student, so a 20-25% markup, doesn't sound unreasonable (and then almost no student pays the sticker price).

High-quality liberal-arts education is really expensive, but it is because it is very labor intensive (both in students and faculty).

BTW, other universities will do it cheaper by either paying their faculty much less (which usually leads to quality problems), or having much larger classes, or crummy facilities, or government subsidies (or all of the above). Community colleges do an amazing job for the price they charge, but it's not the same education :)

> High-quality liberal-arts education is really expensive, but it is because it is very labor intensive (both in students and faculty).

Interesting. Wonder why it's more labor intensive compared to engineering or other degrees. 7:1 teacher-student ratio seems very good. Why can't it be 14:1, would that result in a dramatically worse outcome? (Not even sure what I mean by outcome, maybe inability to find a position after graduation...)

I guess it depends on what you mean by outcomes ... if the outcome is finding a job after graduation, probably not; if the outcome is becoming a 'better' human being, probably yes :)

Having a 7:1 teacher/student ratio means that students will have tons of contact with the faculty outside the classroom; they can walk to their offices and chat (and a lot of learning happens that way). It means 'large' classes are 15-20 students, which means there's no 'lecturing' per se, and a lot more discussions.

Doubling that rate means larger classes (40 students means teacher cannot answer all questions, assignments are made to be graded quickly etc), less interaction with faculty inside and outside classroom

Is it worth it ? I think so, and, if needed (and able), would willingly pay it for my kids. If you don't think it's worth it, or can't afford it, good state universities cost 1/2 or 1/3 as much (tuition is probably around 10K for in-state, room and board is still probably 1K/mo). Community/technical colleges are cheap for a reason, but teachers want to teach, and good students will learn from them, and get a degree; and of course, there's tons of free learning resources

Maybe I’m understanding incorrectly: 13k in teacher salaries would be per course taught by a teacher right? Which really means cost should be 1/4th.

52k per student for a 5,000 student college is 260m per year of claimed expenditure. That is quite a lot money for a faculty of 700, even after subtracting boarding and scholarships, no? I do not know where money is going, although the Bain research does seem to support the evidence for concluding that admin is a benefactor of it.

I'm not sure the Ivy schools "lead" in price gouging. They've always been very expensive. I wonder what a comparison of tuition from 20 years ago would look like, compared to a typical public university? The tuition at public universities I know of has gone from something an in-state kid could probably manange by "working his way through school" to something you better hope your parents have been saving for since you were born. And during the same time there's been an explosion of administrative staff, new buildings, extravagant landscaping and green space, brick sidewalks, etc.

> Lead by the Ivy League and similarly elite private colleges

They aren't similar. The Ivy League has ultra-wealthy donors and parents paying the tuition of students of modest means.

Most students don't pay the sticker price

If only they had $120M sitting somewhere they could use. I dunno, like a savings account or something. A really big savings account that's so big they have to hire asset managers to manage. It would be even better if this savings account was made up of money that good people donated to the institution with the intention that it be used to further education.

Yeah, that would be really nice.

Oh, the intention is good PR. Not donating to an already rich school for "further education".

> "The university plans to add $4.5 million to its financial aid budget each year to cover its 6,500 undergraduates."

~$700 per student.

> "In 2016, the average Brown student graduated with a debt of $23,810, compared with $8,908 for Princeton, which adopted the no-loans policy in 2001."

The increased financial aid may not even cover the annual increases in student debt. This change only covers a fraction of Brown student loans.

700->1400->2100->etc. 16 years in, which is how far Princeton is in, it's $11,200

you're assuming that the money is going to dispersed equally which is unlikely. The money is intended to replace the loan portion of financial aid packages. Most students get some amount of tuition covered by grants, and outside scholarships. So for example if tuition is $10000 (not real numbers obviously), and the student get $4,000 from pell grant and another $2,000 from an outside scholarship this new pool of money Brown raises only has to cover the outstanding $4,000 not accounted for by other sources.

>In 2016, the average Brown student graduated with a debt of $23,810...

Considering the sticker price for an undergrad at Brown in 2013-2016 is approximately $250K, along with the higher median debt loads we're seeing from graduates of less prestigious, cheaper universities, it leads me to believe that these types of elite schools are comprised of two very specific types of students:

1. Wealthy privileged students whose parents pick up the majority of the cost out of pocket.

2. Students from low-income families who receive almost a full ride via government subsidies, private money (scholarships / grants), and the school itself.

Similar to federal and state tax burdens, health care costs, etc., the middle class continues to carry the ever-increasing burden of both the very wealthy and the disenfranchised, while they themselves continue sinking.

3. The school uses a sliding scale of "need based", so middle income students are given some aid. More than very wealthy students, but less than very low income students. The end result is that middle income students pay a similar price to what they might pay in in state tuition at a state school.

Why is your first thought that middle-class students are punished, and not that an institute of higher education, full of very smart people, can figure out an equitable way to disperse need based aid?

I will stand corrected if I can find the sliding scale with accurate data fulling explaining the formula.

But what I saw myself years ago at school, and currently hear anecdotally, is that most subsidies - from the feds, states, the university, scholarships and grants, etc. - seem to be distributed in a rapidly diminishing fashion instead of linearly (subsidies vs income).

In other words, the most poor (or certain minority groups), will get nearly a full ride. The truly wealthy at the other end will get very little, of course. But those in the middle get far less than would be expected if the subsidies were linearly scaled. And so once you earn just a bit more than the most disenfranchised, you don't get much, and instead get saddled with loans.

Which schools are you looking at, anecdotally? Ivies work differently than most other schools by virtue of having larger-than-normal coffers.

For example, Harvard's financial aid works in much the way I describe. Families with incomes below 65K pay nothing, those with incomes 65-150K are "expected to pay between 0 and 10% of annual income", and those above that are evaluated on a case by case basis.

I'd play around with this[1], and see what you think. For a family of 4 with no liquid assets, you need to be making 265K a year to not get any aid. That puts you solidly out of the middle class anywhere except SV/NY, where I expect you could make an argument about CoL adjustments.

[1]: https://college.harvard.edu/financial-aid/net-price-calculat...

I don't sympathize for students graduating Brown with high levels debt as much as I do for students graduating with the same debt from University of Phoenix. Some Universities are predatory in nature and have very low return on investment. Graduating from an Ivy League University will always have a relatively high return on investment. However, this is a step in the right direction for access to higher education in general.

Time for market disruption? How about free online MOOC that ends with a widely recognized (accredited) diploma.

Lectures are free, same for notes. Exams are paid for. You learn on your own or in groups. With additional paid tutoring on request.

Technology allows everyone to get MIT grade education for free.

I always advocated for this when I was in academia ... Make proctored 'exams' (including oral presentations, projects, or whatever faculty thinks demonstrates knowledge), so that uni recoups, or even makes money (probably about $250 now, which is what most industry certification exams cost)

Probably wouldn't work, since prices would still be higher than community colleges, but ...

You assume, wrongly in my opinion, that the main value of a prestigious university is the classes that they provide. From my experience (n=1) there are great instructors to be found at many (most?) universities. Indeed you will likely get better bang for your buck at your state’s public universities. The value of an Ivy League education is in the ressources available to you (e.g. funding for entrepreneurship or to go work in a foreign country during the summer), and access to the network.

Maybe but "funding for entrepreneurship" or "access to the network" is not where most of the tuition money is spent.

Education itself has huge vale: anyone willing to do CS degree is pretty much guaranteed $100k+ salary. In Europe you can get the degree for free / peanuts. Paying for "brand" offers no additional measurable skills / knowledge, it buys you prestige.

What you refer to as "access to network" is mostly cronyism. Paying Harvard fees is essentially buying into the right group of people (rich & powerful) who are vested into this cycle of elite recycling via hiring only "insiders" for best roles. I can't speak for US, but in UK it's been proven this happens a lot.

Can't wait for this to happen, the whole system is so inefficient it hurts.

MIT and edX have already started doing this with the Supply Chain Management MicroMasters [1]. Other universities are coming aboard soon with other MicroMasters [2].

[1] https://www.edx.org/micromasters/mitx-supply-chain-managemen... [2] https://www.edx.org/micromasters

Related, Brown's current endowment is appx $3B.

Brown is a University, so that endowment funds research as well as tuition support.

And even beyond that, comments that bring up endowments usually come from a misunderstanding of what an endowment is. Its not like Brown has a bank account with $3B in it which they can access whenever and however they'd like. Endowments pay out a certain amount of money each year (I think its around 4% each year for most universities), and usually have strict stipulations on how its spent.

How is $120M enough to do this? At a 4% withdrawal rate that's about $5M a year.

They say the average student is graduating with 23,810 in debt. That's about $6k per year assuming a typical 4 year undergraduate schedule.

$5M / $6k = enough to cover ~833 students.

According to https://www.brown.edu/about/facts, Brown has 6,580 undergraduates.

Seems like they'll need about 8x this much money to accomplish their goal?

What happens when the 120M runs out?

Are they putting the alumni permanently on the hook to pay for future incoming students who need financial assistance?

The article doesn't address this issue.

I think the purpose of the 120M is to create an endowment from which ~5% can be taken to provide financial aid every year. If their investments perform as hoped, it should last quite some time.

six million dollars a year, of which some is gobbled up by fees.

Brown has 6500 undergrads...at their current full tuition just the incoming class exceeds that

> Brown has 6500 undergrads...at their current full tuition just the incoming class exceeds that

Well, then they should be able to afford this easily with the size of the fund, because they're not going to be covering 100% of the tuition for 100% of the students. They're just (aiming to) eliminate the portion that would be covered by loans.

What happens when bull market eventually runs out of steam? No more free tuition?

Yes. University endowments are all tied up in investments. This is necessary in order to grow the endowments and make them "permanent", since you need to replace what you spend with the interest you accumulate. However, it also introduces risk from unwise or unlucky investments.

If there is a substantial market correction, and the investments of Brown's endowment are substantially impacted, programs like this will be scaled back or eliminated. Brown will probably be unable to spend the money raised for this purpose on anything else though.

So in a theoretical case of a major recession this fund that exists to help pay for education wouldn't be available - at the time when it would be most needed for families. This is upside down.

"One of the reasons Ivy League schools can do these programs is not only because they have large endowments but also because they have very few low-income students.."

Haha-I see so basically they have pretty much noone who qualifies for free tuition (everyone is making "too much"). Haha that's hilarious.

This doesn't eliminate all loans. It eliminates loans as a component of a financial aid packages.

If you did not qualify for aid & need loans, those will still exist.

I feel there's an "uncanny valley" when it comes to affording college. I came from a family of modest means so was able to attend a top (and expensive) school for very little. As an engineer at a large company I'm pretty sure my kids won't qualify for financial aid, yet it's unlikely we'll be able to afford the sticker price of a top school (~$70k/year/kid).

This applies to undergrads, so I'm assuming they are already in debt from student loans. What's another 10-15 grand? Doesn't seem like they are really helping anyone here.

This article is from September. Has anyone seen or heard any updates? A quick google didn’t show anything.

I am a graduate student at Brown. The deadline for raising one quarter of the funds is December, so I expect we will be updated on this by next week. I have not received any recent emails on this.

They should just do an ICO

/troll

Is that a bounce house in the article photo? WTF? Now we know where the tuition goes. How about graduating debt free by:

1) Going to an affordable school. 2) Slinging packages at FedEx, or some other job that will contribute towards educational expense.

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