1: http://www.slate.com/articles/business/moneybox/2015/09/harv...
2: http://www.ricethresher.org/article/2016/10/5-billion-rices-...
Like most top universities Rice has a large endowment. It's upwards of $5 billion in their case. If we take a sub market interest rate of 5% that's $250 million a year. Their entire undergrad body is 4k. That's $62,500 per student per year on a conservative return rate. No top universities actually need tuition anymore, but even top universities are increasingly being run as businesses with growth in 'revenue' seen as a positive in and of itself, necessity aside.
And in this case, they'll likely see major returns on it anyhow. Come donation time, I expect those graduates who were able to find a better place in life thanks to a voluntarily free education are going to be quite quick to open their wallets especially knowing that those donations will in turn go to productively helping the next generation of graduates going through the same cycle.
> The original charter of Rice Institute dictated that the university admit and educate, tuition-free, "the white inhabitants of Houston, and the state of Texas". In 1963, the governing board of Rice University filed a lawsuit to allow the university to modify its charter to admit students of all races and to charge tuition.
They also have massive amounts of real-estate and stock grants.
> Our program requires no contribution from Harvard families with annual incomes below $65,000. About 20% of our families have no parent contribution.
I received full a full tuition scholarship when I matriculated in 2008; the number of students in a similar situation was in the dozens.
Potential attendees are accepted based on SAT scores; class rank; extracurricular activities; etc.; and if the applicants make it through all of those bandpass filters, they're awarded full-tuition scholarships.