The common refrain about higher education costs is state governments have cut back on subsidies, so it's interesting seeing this stat for Harvard since it doesn't get the same level of state support, has an endowment, and still saw tuition double.
They can maintain their elite status while heavily discounting tuition to those with financial need, since the very image of "premium product" means that there will always be people willing to pay for it. It is essentially a self-fulfilling idea.
I recall visiting Harvard during a high school debate tournament, and being utterly unimpressed with the facilities compared to what I had seen at non-ivy-league schools. The money you pay for tuition really isn't going into a better education, it's maintaining the illusion that draws big names as both students and professors, and all the networking opportunities that then manifest as better outcomes for graduates.
Besides, the reputation of a school isn't built on its tuition, it is built on the alumni. The only "positive" signal from a high tuition is that it is a filter to reduce the number of poor students that your child might have to interact with and increase their chances of falling in with some other elite rich kids to fast track their way up to the C suite or some lucrative board seats.
That's the primary reason to go to private school. That's what justifies the 2-4x price gap with public universities. All the niceties (not having to enter into a bi-yearly battle royal for seats in limited space classes, not having to put up with overly impacted class sizes, other little luxuries) are just there to maintain the appearance of prestige. The actual value comes from the admissions department.
I went to a private school and I saw a lot of friend groups and social structures that find ways to limit those networks to “rich and competent” instead of “just competent”.
Eg Fraternal organizations (bonus: also gender limited) like fraternities, finals clubs, or supper clubs with massive fees and tight cultures are one big common example. I was (embarrassingly) in such a club and there was definitely a riff between incomes (“wanna fly to New Orleans for Mardi Gras this week, we’ll only miss a few days of class?”)
Obviously spring break trips or not having to work a campus job. Eg Yacht week.
Also: expensive clubs with extra dues, equipment
A big thing that I didn’t expect, but is something that IMO schools don’t do a good job to address is that many lower-income students just don’t understand that sort of academic world because no one taught them. Eg I met a freshman student who thought professors wanted him to fail and that there was an adversarial relationship. Furthermore, he thought office hours are when the professors shouldn’t be disturbed. Once someone just explained that professors want you to succeed and hold office hours to help you succeed, he became more successful, less stressed, and spent less time studying alone. My parents taught me all this, and my high school held office hours… but many students never learn how this world works!
I think that is a myth, unless the student is paying more than say $100k per year. Elsewhere I read that average fees were about $50k, but I presume there is quite some variation.
Total operating expenses = $5.4 billion[1]
Operating Revenue: Endowment income 36%, Education/Tuition 21%, Research 17%, Gifts 9%, Other 17%[1]
The 21% Education/Tuition income is split: Degree Seeking Education 13%, and Continuing and Executive Education: 7%[3]
Student income 1.2 billion[3]
There are 30,391 students including 8,527 undergraduate and 21,864 graduate students at Harvard University for academic year 2020-2021. By attending status, there are 19,030 full-time and 11,361 part-time students[2]
Argued from a different perspective (with a similar outcome): https://news.ycombinator.com/item?id=33838201
[1] https://finance.harvard.edu/financial-overview
[2] https://www.univstats.com/colleges/harvard-university/studen...
[3] https://finance.harvard.edu/files/fad/files/fy22_harvard_fin...
The closest I can paraphrase your point-of-view would be “rich students are great”, or potentially that poor students gain by associating with rich students?
1) The view that the value given by over charging the rich students should be based on the number of students' tuition they eliminate is not fairly representing the situation, and understates the impact of having, say, a quarter of the student body paying significantly more than the "true" price. If the school spends say 20k/student, they charge some students 60k and others 10k, then each rich student has subsidized 4 poorer students. If a parent donates a large sum to get their kid into the school, that number is likely much greater.
2) Expensive schools using their high tuition offset by discretionarily providing merit (or need chosen by merit) based aide as a filter to distill the student body to only the high-performing, rich, or both is the main value proposition of expensive schools. Every pairing both within and between those two groups are valuable to the students, relative to say an acquaintance with an economically disadvantaged mediocre student. It subtly turns the universal experience of making new friends at university into a massive opportunity for networking, which many students don't even realize while they're engaging in it. It's not egalitarian, but it is extremely valuable to its beneficiaries.
My point is that you are misrepresenting the scale of the figures. I suspect the figures are more like $50k fees, and $100k costs? Given those figures as assumptions, rich kids need to pay way way more, and the fees paid by poorer students matters less. Otherwise you just end up with a school with mostly rich kids. I go into my assumptions for the figures in the other post I linked to.
> Expensive schools using their high tuition
Undergrad tuition fees only makes up something like 13% of Harvard income, and some of that is paid for by “poorer” students. I think your argument hinges upon tuition income being the most significant income to the school. Remove 13% of costs (crazy admin staff) and Harvard doesn’t need any tuition income from rich kids any more for undergraduates.
Google result shows “Harvard's 2019 class [snip] a massive 82 percent of those scholars are economically advantaged” i.e. rich kids are obviously not subsidising poor kids.
I am merely trying to point out that you are making deep assumptions, annd your anssumptions appear to be false, although admittedly I have only done some superficial googling.
I presume Harvard is a finishing school, for networking and status signalling. Especially given its 98% pass rate!
> massive opportunity for networking
I would hope that poorer students manage to network into the rich kid networks (I totally agree we should be realistic about how the world works, regardless of how “unfair” it may be). Whether poor students can effectively network is another question. I have certainly seen articles from poor kids explaining how difficult it is to break into wealthy cliques e.g. can’t pony up cash to join sporting events or outings, and don’t understand the social queues.
I admit I don’t really know much about the topic, since I went to a middle class school in a country on the edge of the world, and I have never spent time with wealthy scions. I am relatively wealthy compared with my friends (excluding the friends that I made my wealth with). Note: I’m using undergraduate and graduate in the UK meaning, not the US meaning, which I don’t grok.
Here is a (left-bias?) article that argues that poor kids are not actually being helped: https://www.vox.com/policy-and-politics/2017/2/28/14359140/c...
I presume it is difficult to find right-bias articles looking at equality of opportunity for expensive universities?
The sticker price of Harvard is not what the median applicant pays. Some applicants -- e.g. Jared Kushner -- literally do pay millions [0]. Others pay a small fraction of that [1].
My 2c: lowering the sticker price at elite schools would be great because it would lower the perceived barrier to entry. Those perceptions matter, especially to folks who don't come from the Professional Managerial class and don't have a clear understanding of how the system works.
But I also see why they don't -- they do, after all, want to make sure that rich families pony up.
[0] https://www.propublica.org/article/the-story-behind-jared-ku...
[1] https://college.harvard.edu/admissions/why-harvard/affordabi...
I think the "loans" part should be removed, myself.
Everyone I knew from high school that attended private schools, or “good schools” out of state paid out the nose (or their family did). I grew up in a relatively affluent area, so most people didn’t get much aid. My family could afford to pay for my schooling too, but I had one of the lowest bill of anyone, excluding some in-state public schools, because private schools with big endowments heavily subsidize almost all students that aren’t rich foreigners, 1%er kids, GI bill/someone-else-pays attendants.
TLDR: Schools know who can write a blank check, and they set the sticker price based on those students. Everyone else is subsidized.
https://www2.montgomeryschoolsmd.org/siteassets/schools/high...
So it can be strangely worthwhile to sell all your non-retirement investments and buy the biggest house you can find.
So for example: for incomes in the $65-100k range, the median net cost is $5,701 with 99% receiving aid.
I think this is the correct route. I don't see anything wrong with wealthy families paying a high sticker price as long as admissions is mostly need-blind, and students with less resources get a break.
pay as much as you and your parents can pay and/or borrow[1]
TFTY
https://college.harvard.edu/financial-aid/how-aid-works/type...
Is this true? My understanding is that Harvard was a finishing school for much of its history. It only began to transform into a world class research university on the German model after WWI.
They seem to make it possible for anyone to afford to go there. (They’re just very selective about who can.) So I would never say they’re overpriced or expensive. Maybe it costs a lot if you come from a rich family, but for them, the price doesn’t matter. And for those of us who aren’t rich, it wouldn’t be expensive.
This is very abnormal for non-elite private schools. If I’d gotten in to any of the elite schools, I think they would have been the cheapest options by far… even compared to state schools.
Good professors, students, and networking makes a good education though, so yes it is really going to a better education.
Some of the best professors I've had in terms of actually learning things were in tiny departments that had no networking capabilities worth speaking of in terms of post-graduation economic success.
Be warned, though, I may be misremembering. So please do correct me if I am wrong.
I'm not at all arguing in favor of this or saying it is moral that these organizations should be tax-exempt, but this is the current status of American tax law.
This is particularly bad when you consider that it is entirely legal for, say, a political campaign to spend most of its money buying a candidate's books that nobody else buys in order to hand them out for free at rallies, or a church to spend most of its money buying a mansion and private jet fleet for the pastor.
70% have aid of some sort, those with parents earning less than $65k/yaer generally pay very little, and majority pay the same or less as they would have in-state.[1]
1 - https://www.cnbc.com/2019/04/05/it-costs-78200-to-go-to-harv...
And this is real reason tuition has sky-rocketed. It takes all of 5 minutes to fill out and qualify for a government loan. There is very little downward pressure on tuition, and the subsequent proliferation of administrators.
That puts a bit of a dent in your argument.
• Harvard gets 20% of its income from students, and the other 80% comes from investments and other sources (matches what link previously posted implies).
• There are two cohorts of students (A) wealthy but undeserving students, and (B) poor but deserving meritorious students.
• The argument made was that we are better off if wealthy undeserving students subsidise the poor but deserving students (paraphrasing).
• I'm going to pick a number that every student costs the university $100k per annum (incorrect, and assuming zero variability between students . . . I'm just picking this number so I can make my point clearly. Edit: actually $100k matches a back-of-the-envelope calculation from other figures).
Then:
Any wealthy undeserving student paying between $20k[1] to $100k actually reduces the number of deserving students. Said another way: wealthy undeserving students need to be paying more than 5[1] times what their fair prorated fees would be before it helps the poor deserving students.
Also the article is talking about excessive overhead costs - maybe Harvard could trim 20% of administrative costs, and then concentrate 100% on teaching those that merit it the most, regardless of their background.
Edit: Let us assume it is okay to buy your way into Harvard if you also pay for one other deserving student (that can't afford it), then with my hypothetical University costs of $100k for a student for a year, the fees for the rich student would need to be $1 million to meet that 1:1 ratio, and that ratio implies (in the limit) that 50% of students are undeserving rich students!!!
Also note that 98% of Harvard students graduate: https://college.harvard.edu/resources/faq/what-harvards-grad...
[1] Edit 2: low value of $20k here is incorrect. Although 20% of income comes from students, a large percentage of expenses are for research and other non-teaching expenses. See my other comment, with an analysis from a different direction: https://news.ycombinator.com/item?id=33838700
Brain fart: I mean $200k. I had originally re-edited values proportionally and I didn’t correct that.
No, nothing about whether students deserved to be there was part of the argument.
https://malcolmgladwell.bulletin.com/princeton-university-is...
The very high sticker price of tuition exists to let the schools charge each student a customized price by applying discounts (e.g. scholarships and aid) as they choose. They can compete for students this way. The most desirable students (by whatever criteria the school has chosen) are offered more discounts.
This system operates at every level. A student of medium-high desirability, say a well-off white kid with good-but-not-great grades, might be offered discounts from a less well known regional school, but not from a nationally recognized school, even if her family can afford to pay full fare anywhere.
I have only ever heard that it was the availability of non dismissible loans that inflated the price.