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  A very confusing aspect of the US college system is that very few students pay the full sticker price.

At Harvard, that 'very few' is 45%. From the article:

  About 55% of Harvard undergraduates receive some type of financial aid, according to the university.

You say:

  but it allows universities to admit a much wider range of students than they normally would.

The high sticker prices combined with variable discounts aren't there to change the pool of students. Their purpose is to ensure that each student (or their family) pays close to the maximum they'd be willing to pay.

Do you like it when you visit a SaaS product's pricing page and it says 'call for pricing'?

Well, how about if it was totally normal that, before a SaaS provider was willing to quote you a price, you had to provide them with a list of your assets and a copy of your most recent tax return?

If they were maximizing for revenue, they’d just only admit people who could afford it.

They could easily fill all of their slots with people who can afford to pay the full tuition.

I didn't say they're trying to maximize total revenue. I said they're trying to maximize revenue from each student.

Those two are not the same.

They're not stupid. They're not going to destroy the university's reputation by admitting only people who can pay a lot. That would work for a couple of years, but eventually it would be known a party school.

They clearly also aren’t maximizing revenue from each student because it maxes out at only $60k a year. There are many students at Harvard whose families would pay more than that.

On the lower end there’s no way that 25% of the students are willing to pay nothing at all.

If they really wanted to maximize what each student pays they wouldn’t publicly disclose the formula. They’d let you in, look at your financials, and then give you an individualized quote that takes “you’re unique circumstances into account.” (They do that to some extent by offering additional scholarships to some people, but they wouldn’t give you a formula that defines the ceiling.)

  because it maxes out at only $60k a year

If they were to set the sticker price much higher than that, it would be cheaper to hire a full time tutor for 32 weeks per year. With the price that high, it would be difficult to maintain the charade that 'tuition' fees are primarily set to fund tuition.

  They’d let you in, look at your financials

But they do look at your financials. You don't just say 'hey this is what I have, trust me bro'.

Harvard isn’t even in the top 10 most expensive colleges. They could easily add a $90k tier and no one would bat an eyelash.

>they do look at financials

Of course they do. Did you ignore the rest of what I wrote?

The point was that they wouldn’t give you a price ceiling. Did those revenue maximizing enterprise software companies put “call for a quote, but it’s not gonna be more than $150 a seat”?

  They could easily add a $90k tier and no one would bat an eyelash.

This is a reasonable point. I'm sure they can't deviate too much from other Ivy Plus fees, as it would show they're just being greedy. But this doesn't explain why they don't just nudge up even more over time. Maybe they can't charge $90k this year, but they could add $10k per year for the foreseeable future, as long as other Ivy Plus colleges do the same thing.

This is sort of what has happened, but it appears there's some limit.

My point is that, at some level, it becomes obviously a scam. If you charge someone $60k for a year's tuition, you can sort of justify it.

But at $90k, it would be the same price as hiring a full time (40 hour per week) tutor at $70/hour for 32 weeks. At some point what you're doing becomes totally transparent even to those who would like to believe you.

  The point was that they wouldn’t give you a price ceiling.

Two thoughts about that:

1. If you're rich and your kid doesn't quite meet the bar, you can get in to a top university through donations. I'm not talking about bribing an athletics coach, but donating to the university itself.

2. If there were no sticker price at all, again it would seem very shady. It's hard to explain when you're a university with a huge endowment that gets tax breaks and federal funding, why you can't publish the maximum tuition price.

How do you think they set the sticker price? Do you think they aim to make a certain modest margin on the undergraduate class as a whole? Do you think the total amount they receive in undergraduate fees is a reasonable markup (say, 30%) on the reasonable cost of the services they provide?

>How do you think they set the sticker price?

I think that like any organization, there are different people with different goals. I think some are true believers and are trying to minimize cost while others are interested in building their personal power base by raising tuition to pay for pet projects.

On the whole though I think Harvard has a budget, and they set the sticker price so that when you combine tuition, disbursements from their endowment, and federal grants, they meet the requirements of their budget.

>Do you think the total amount they receive in undergraduate fees is a reasonable markup (say, 30%) on the reasonable cost of the services they provide?

Yeah because the services the provide are insanely expensive. Harvard's operating expenses are more than they get in tuition revenue, so if you look at it from a markup perspective, it's a negative margin.

You can argue that the services they provide aren't worth it, but clearly the people who go there believe they are.

  On the whole though I think Harvard has a budget

Right, but how do they set that budget? The cost part of the budget is the result of decison-making.

  Yeah because the services the provide are insanely expensive.

The 'insanely expensive' isn't something inherent to the services themselves. Harvard can spend tons of money because it has tons of money.

Imagine a SaaS company that has really inefficient operations. Would you be willing to pay a higher price for that product than for a competing one that has equally good features and UX, just because the former is insanely expensive to operate?

  You can argue that the services they provide aren't worth it, but clearly the people who go there believe they are.

People aren't paying for the services. They're paying for the name.

Imagine this. Harvard offers any student a $20k per year discount on fees, with one condition: you don't get the piece of paper, and you can never tell anyone you studied at Harvard, or even imply that you did. Would people take that deal? They'd get all the same services, so why not?

>Right, but how do they set that budget? The cost part of the budget is the result of decison-making.

The same way any organization sets a budget. A bunch of competing interests fight it out.

>The 'insanely expensive' isn't something inherent to the services themselves.

The thing you're missing here is that sure people want the name, and the networking, but they also want and education, and an experience. The experience is very expensive to provide.

>Imagine this. Harvard offers any student a $20k per year discount on fees, with one condition: you don't get the piece of paper, and you can never tell anyone you studied at Harvard, or even imply that you did. Would people take that deal? They'd get all the same services, so why not?

Let's do another thought experiment. All Harvard students get to vote. $20k per year discount, but Harvard gets rid of the multi-billion dollar campus. No rec-center, no marble buildings, no enormous libraries, no stadiums, no manicured landscaping, no pomp and circumstance at all. Just a couple big gray buildings full of classrooms and army barrack style accommodations far enough outside of town that land and construction are cheap. Plus they fire all of their top tier professors and hire lecturers from community colleges.

Harvard students expect amenities. They expect grandeur. And they expect exclusivity, so Harvard can't just bump up their total enrollment to 50k like a big state school.

If you look at big state schools without the name, Harvard tuition sticker price isn't that much higher. University of Massachusetts Boston (ranked #214 in the US) is just under $40k for out of state students.

> it would be cheaper to hire a full time tutor for 32 weeks per year.

A large part of the value of top universities is that they have top professors. You wouldn't be able to match the quality of all the different professors a student interacts with for $60k per year with a private tutor.

How much interaction do undergraduates have with those 'top professors'?

Depends on the undergrad. I had a ton of interactions with top professors in undergrad because I sought it out.

Also the primary benefit of Harvard vs a state school is the network effects and the credentialing of having a degree from Harvard.

  Depends on the undergrad. I had a ton of interactions with top professors in undergrad because I sought it out.

Yes, because you sought it out. But consider your classmates. What's the median amount of time they spent 1:1 or in a small group (4:1 or smaller) with a 'top professor'? I would be surprised if it were more than 1 hour per week.

  Also the primary benefit of Harvard vs a state school is the network effects and the credentialing of having a degree from Harvard

You've got to the core of it. The network effects and the credential are things Harvard can bestow solely because it's Harvard. The tuition fees students pay don't create the network effects. They don't create the value of the credential. These are almost solely due to the flywheel effect from the selective admissions process. Smart people want to go to Harvard because other smart people want to go to Harvard.

As a contrast to the hand waving in the other posts which claims many don't pay full price, the degree I got cost $20k per semester for the 2 years I attended university after community college, paid in full each semeser. That's one data point, I know. And maybe it's an outlier.

I'd be interested to know, of the people who got grants and other support, what percentage of their total tuition was it? And what percentage of people got support?

It's also worth noting, that there's a difference between knowing you'll have support and the uncertainty of not knowing.

Cool, tuition should be taxpayer funded by the American people, namely the super wealthy.

In a sense isn't that exactly what OP is saying is happening today? Only the super wealthy actually pay the sticker price on college, everyone else is subsidized by some combination of taxpayer-funded grants, scholarships (usually provided by the super wealthy), or just straight-up discounts (covered by the wealthy students paying full price).

There are a lot of other things that money should go towards before college tuition. Maybe we start with our abysmal primary and secondary education.

You can’t fund all this stuff only by taxing “the super wealthy.” The math just doesn’t math. That’s why every developed country that has free college also has heavy taxes on middle and upper middle class people.

I’d happily pay more taxes if it meant my country had healthcare and education.

Me too! But nobody is fixing to materially raise my taxes. Somehow, “the top 1%” became “the super wealthy” and “billionaires,” and engineers and lawyers and doctors continue to enjoy tax rates that haven’t materially gone up since Reagan.

If you’re not going to significantly raise my taxes, and instead are ranting about the “super wealthy,” you’re just cosplaying about universal healthcare and free college. The math doesn’t match. People in the top 1% of the wealth distribution have an average wealth of $18 million: https://taxfoundation.org/blog/super-rich-pay-effective-tax-.... They have an average AGI of about $1 million/year. The total income for this segment is about $1.8 trillion. You could double their taxes to over 50%, and that would bring in less than $500 billion a year. It wouldn’t even get halfway to closing the deficit, much less paying for universal anything.

Meanwhile, people in the top 10% have an average wealth of $3.8 million, and average AGI of $273,000. Their total income is $4.9 trillion. So the people outside the top 1% but inside the top 10% reflect a potential tax base of $3 trillion. And we refuse to raise taxes on these people.

Fun fact: if we taxed all income over $500,000 at a 100% tax rate it wouldn’t even cover our current budget deficit, let alone allow for such a massive spending increase.

Em. People filing returns over $500K reported an aggregate AGI of $3.8 trillion for 2022. After subtracting out the $981 million in income taxes they paid, you'd still be left with about $2.8 trillion, about a trillion more than the deficit.

Not that they wouldn't immediately shield their income if you tried. Still, I don't see any issue with maximizing our tax revenue from the top 1% by increasing their taxes until total revenue starts to drop, though I'd also be happy just dramatically increasing inheritance taxes and eliminating tax shields since billionaires still die regularly.

Source: https://www.irs.gov/statistics/soi-tax-stats-individual-stat... (Table 1.1, row 57)

There are entire skyscrapers filled with people whose job it is to make sure rich people pay as little tax as possible.

Source?

This is sorta why the hysterics by the punditry on Twitter and the media about student loan debt or about college degrees being worthless, are overblown or unfounded. The sticker price is seldom, if ever paid in full.

Not only huge discounts on the tuition-side, but also tons of forbearance and payment plans after graduating. There are many people with homes, 6-figure jobs paying off loans slowly and gradually, while enjoying career success and a high standard of living compared to those who do not have degrees.

It's not as daunting as the large figure of money would suggest when the returns from a degree are still largely positive compared to without a degree.

This is oversimplifying. The path to a good career after graduation is still fraught with many traps and pitfalls.

Ask anyone who finished university in late 2008 to 2010 how their job prospects were compared to those that finished just two years earlier in 2006.

Compounded by the fact that there is no way to discharge the debt if you get exploited into signing up to $100,000+ of debt for a degree that provides no good stable income afterwards.

Close to 90% of all student loans are federal and qualify for income based repayment. The vast majority of students don’t have any private student loans, so if they can’t find a job they pay nothing.

If they make money but not enough, they’ll pay 10% of any income above 1.5x the poverty level.

Plus there are very generous forbearance terms if you’re temporarily struggling.

This is oversimplifying. The path to a good career after graduation is still fraught with many traps and pitfalls.

same for people without degrees. having a degree increases odds of success and pay

"There are many people" is a useless platitude to any number of people who fall through the cracks.

Personally I had to wait until I was 25 to get some loans I needed to finally finish a degree, because my family was paper rich, wasn't paying anything, but was still on speaking / visiting terms with me. The system doesn't accept that as an answer; you have to show an extreme degree of alienation / separation (I can't remember the specifics, but a loan counsellor basically told me to give up).

>There are many people" is a useless platitude to any number of people who fall through the cracks.

And so too is "any number of people who fall through the cracks". For any given situation or context in which the vast majority fare okay at least, there will be a certain number who fall through the cracks (just as there will be some who do very well) and you can't design all the rules around a system to completely eliminate the possibility of falling through the cracks, or at least you cant without risking externalities that make some key part of it worse for many more people.

As a criticism of any complex system, pointing out unusual worst cases is usually little more than a sort of useless hand-wringing for the sake of doing so, unless one has a solution to propose.

I agree with the idea that you can't get rid of all the cracks, and I'm not particularly salty that I did manage to fall through one of them (for a while). It's just one minor problem in, as you said, a complex system that is full of them, as all systems are.

However, I think you're descending a sort of contemptuous name-calling with the "useless hand-wringing for the sake of doing so", considering that the subject was an attempt to make a very large change to the way the system works. That change was rejected (and, as the OP to my comment said, called by many "hysterics"), but it was nonetheless a proposed solution. Now... we're in the process of a massive change of a very different type, with the DoE getting chopped into pieces and universities being threatened (very vaguely for now, since the focus is still on other areas, but I think there's no doubt that their time will come if the current admin can maintain its momentum).

In general, the populace is aware that there are quite a lot of cracks and is, in the haphazard way that democracies do things, trying to apply solutions.

> the returns from a degree are still largely positive compared to without a degree.

Keep in mind that people who do not complete a degree also accumulate student loans.

I also wonder if people who get loans might be different than the people who search for and get aid. It might be more frictionless to get into debt than get a scholarship, even if it would be possible.