The average software engineer makes around 100k. If you have been working for 20+ years, has it been difficult for you to save up enough money for college?
I randomly chose Princeton's financial aid calculator because it was close to the top of Google. For a family with two working parents, two kids (one entering college), and $250k in home equity in Illinois (the middle of the USA):
* For a $100k/year SWE + a $25k/year something else and no college savings the expected family contribution is $30k/year
* The same family with $250k saved in a 529 college savings plan is $45k/year
* For a $125k/year SWE + a $50k/year something else and no college savings the expected contribution is $50k/year
* The same family with $250k saved in a 529 college savings plan is $66k/year
* The same family with $450k in home equity is expected to pay $75k/year (I guess you're expected to take out a home equity loan to pay for college).
* Make the family renters with $50k/year income (30k+20k), and their contribution drops to $4.4k/year.
The point is: The more you save, the more you need to save. And the more you make, the more you need to make.
That's not to say need-based tuition is bad policy. But, it does mean that "surely it's easy to pay for college with your level of income" doesn't really come into play until you reach the top 1-2% of income.
Everyone below that is going to have their tuition adjusted to make the out of pocket cost painful but bearable, and the average SWE isn't a 1%-er.
Depends on the college. MIT says to expect to spend ~ $70K/year. $100K * 20 years = 2 million. Two kids * 4 years = $560K. That's a little over 1/4 (before taxes). So yes, it would have been difficult to save up that much money. I have enough to send them both to a public in-state school debt-free, but not an elite private school.
$50k a year in tuition is still not a bargain, of course.
I really cannot imagine what they’d do with that kind of money. Besides build super fancy buildings of course.
Universities also compete on who has the best food and nicest dorms. Prospective student often tour campuses, so having a pretty one with lots of rose bushes, ivy, and brick is good for recruiting. That all costs money.
Another thing is that elite private universities often have strong need-based financial assistance (discounts). MIT, for example, claims that the average need-based scholarship is about $47k (on tuition of 53k). They also claim 31% attend tuition-free.
Making a small inference: Those who actually pay the full $53k in tuition are helping those who pay nothing.
Possibly, though it's also possible that those who have paid into the University's endowment in the past are helping those who pay nothing.
Another thing to consider is if you're investing $280K in the MIT brand, do they offer any bachelors degrees worth $280K other than maybe CS and pre-med?
The thing is, MIT's tuition is fairly typical for a private university. If anything, MIT (and other elite private universities) offer better discounts than lower-ranked schools.