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Comment by thelock85 | Hacker News Reader

If you reduce the choice to public funding vs wealthy alumni stewardship, and there seems to be no meaningful pathway to circumventing the current assault on public funding, then why should you alienate your wealthy alumni?

Obviously the situation is much more complex and nuanced, but this framing (amongst others I’m sure) seems appropriate if you are thinking on a 25,50,100 year time scale in terms of impact of your decision. The country is littered with public and private universities who made poor moral choices across the 19th and 20th centuries but I’m not aware of any institutions suffering long-term reputational harm (or threat of insolvency) as a result of those choices. (Then again, maybe it’s because the harm was swift and final at the time)

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These are some of the richest entities - forget about universities - just entities full stop, in the entire country.

Stanford’s endowment is less than $40bn.

That’s a lot of money on tap, 99.99% of US organizations have less than $1Bn in reserves.

Even among educational institutions there’s a 19+k private schools and 5,300 universities in the US. The vast majority of them don’t operate anywhere close to that scale.

Consider adding for or five more 9s to that. There are 50+ million corporations in the county, and then you need to add all the churches, clubs and nonprofits.

My 4 nines + your 4 or 5 nines = 1 in 100 million to 1 in 1 billion.

Even adding all the churches, clubs, and nonprofits I don’t think it’s that rare. The Mormon church for example has ~293 billion in assets. Even the Church of Scientology is apparently worth ~2 billion.

Maybe 1 in 10 million? What do you think the numerator in denominator are here? I'm guessing less than a hundred organizations with a billion dollars in reserve.

There are less than 2,000 us companies with a billion dollar market cap, out of ~40 million companies.

I expect the reserves would be a substantially less than that. Maybe somewhere in the ballpark of low triple digit organizations with a billion+ dollar reserve. Maybe 200 nationally?

Above 90% = 1/10, 99% = 1/100, 99.9% =1/1,000… the pattern is 1 then a zero for each 9.

So 8 9’s = 100,000,000

yeah, I understand decimals.

If its 200/100,000,000, that would be 99.9998 or 2 more digits.

IMO, it’s going to be in the thousands to 10’s of thousands. Depending on what organizations you exclude and if you’re considering total assets vs net assets vs liquid assets etc.

There’s a surprising number of individual buildings worth 1+ billion each of which are going to be their own org. Add pensions, trusts, nuclear reactors, large dams, government organizations, etc.

Here’s 30 US charitable foundations over 1B which isn’t an exhaustive list. https://en.wikipedia.org/wiki/List_of_wealthiest_charitable_...

So, at full burn, enough to run a national laboratory for half a century. This is what rich looks like.

The national laboratory budget is $14bn/yr.

Sure, if we assume that the total budget for the 17 national labs is $14B, that would imply that the average lab is a bit less than $1B/year to run. Hence $40B can run an "average" lab for around 50 years. Or am I missing your point?

funding is not even per year to year, but your point is still valid

The poor choices started in the early 90's when the SCOTUS decided that MIT didn't have to pay taxes as long as they gave enough charity discounts to students.

Everyone else jumped on it and abused the student loan system by jacking up tuition and then applying charity grants to basically all students. Leading to our current Student Loan crisis.

This is the first time I've seen this framing. Typically folks blame bloated admin and fancy dorms. Where can I learn more about this take on the student loan crisis.

Those are not incompatible statements.

The loan (and hence tuition) crisis is because US taxpayers provide blank checks to students with no underwriting.

As I understand matters, it started in the 70s and 80s as states pulled back from funding public institutions. This funding was the mechanism which allowed public institutions to be affordable to families such that a person could pay for a year of public college by working in a grocery store over the summer.

MIT + the more expensive private colleges are effectively a rounding error in terms of number of students matriculating, but they do play in the same market and will price accordingly. But the big driver of what they can get away with is that a college like University of Tennessee is $35,000 annually, for a total ticket likely north of $150k. (Not picking on them, just chose a state at random.)

Worth noting that this is a deliberate political choice. At any time, a state could choose to return to subsidizing in-state college at its public institutions, perhaps in exchange for working in the state after graduation.

>As I understand matters, it started in the 70s and 80s as states pulled back from funding public institutions.

Yes, absolutely this, and accelerating heavily in the late 00s after the financial crisis. In some states, especially for non-flagship universities, you can overlay the decrease in state funding and tuition increases and they're nearly the same line

Tuition explosion isn't all just the proliferation of assistant deans and VPs (although that is a problem, too), a huge portion of it is that public higher education is essentially public in name only these days

Does subsidizing lower the cost, or just mask it by having it covered from a different wallet, e.g. robbing Peter to pay Paul?

What stops the higher ed players from regulatory capture of the state agency in charge of those subsidies and milking that cow for all it's got?

> What stops the higher ed players from regulatory capture of the state agency in charge of those subsidies and milking that cow for all it's got?

Yes, you are correct that a corrupt state will deliver poor results. A key bulwark against in many places is effective oversight of public assets and administrations. But a corrupt state also could do much worse than $35k for undergraduate tuition. Which suggests priorities are being set to accomplish a different set of goals.

Also keep in mind that the primary mechanism here is not adding regulation. Rather, it's about things like ensuring universities have enough open slots for the children matriculating through their K-12 programs. Think about it more in the way states are generally capable of managing and subsidizing/funding student education at the K-12 level.

Bigger picture: consider why it should even be seen to be such a massive difference in capability for a state to run a public education program for the 4 years after high school vs the first 13 years.

Has this - “effective oversight of public assets and administrations” - happened in other systems with significant state involvement, like secondary ed, healthcare or infrastructure projects?

My view is skewed towards California, where admittedly examples of cost decreases through economies of scale are lacking.

Yes. Water systems, trash collection, fire departments, parks, etc. generally are cost-effective and well administered that they are typically excluded from these discussions.

K-12 is particular is an area where critics demean public systems, but where we have yet to see anyone scale an alternative at lower cost/higher quality targeting the same goals. (Apologies if someone has done it, I am not aware.)

Note: this means that systems that exclude classes of students do not count as they have different goals. Obviously, one could more cheaply build a private education system for rich kids who all have similar capabilities. But that is not the goal of public systems, who are tasked with educating the poor and rich, the deaf, the blind, those who speak other languages, etc. Generally, they are able to do this for less money per pupil than elite private schools that are not able to serve all students.

Anyway the point getting lost here is that states do subsidize public universities, but not as much as they did in prior decades. The debate you seem to be aiming toward is whether we should have public universities, to which I would say that we should have more of them, and they should cost students less by having taxes cover a larger share of those institutions.

Edit: I want to come back to this for a moment. Water and sewers are really core functions of public governments, and in the US they basically work near 100% of the time. They involve tremendous ongoing logistical work at timescales ranging from emergency pipe burst to capacity planning for decades in the future.

The notion that government involvement means poor/expensive service delivery is a fiction constructed from the outliers of government work.

> The debate you seem to be aiming toward is whether we should have public universities

Apologies if my argument came out that way. I agree with a need for public universities, I just disagree with the need to have them at any cost. Ad absurdium, a public university that costs $1,000 / $10,000 / $100,000 / $1,000,000 per student are all a good deal to a purist because hey, a need is a need.

The current system, however, incentivizes extracting maximum value for the stakeholders (administration) while delivering minimum results to customers (students). With a single-payer there's even a stronger incentive to inflate the operating costs.

If you went through US higher education, you've probably witnessed a few tricks designed for maximum revenue extraction.

* credits from one [cheaper] accredited institution are not transferable to another [expensive one], ensuring that you'd be subjected to a higher tuition

* courses that can be delivered online are not

* courses that are delivered online are paywalled to ensure only those who have registered and paid can view the precious content (something Open Courseware stood up against)

* there's no system where one can test out of pre-requisites by taking similar courses cheaper (or free) elsewhere. E.g., if you self-studied through some MIT or Stanford courses online, you still have to pay full tuition at Fill In The Blank State University

Granted, it's not always about effort duplication and resource waste. California Community Colleges, for instance, is good at centralizing student registration, identity management, and financials, so that each community college doesn't have to run a fully staffed department doing all that.

Ideally, though, an eager high school student should be able to

* load up on as many courses as they can manage online on their own schedule

* have an ability to test out of the courses for a fee that's lower than the full price of the course

* arrive at the university and pay full tuition for the courses that do require in-person training (nursing, medical sciences, any course requiring labs)

You're right, end of the day a public university is an extension of secondary school, but with higher concentrations of students (and hence fewer locations required and all sorts of economies of scale at play). There's no reason that grades 13-16 should cost more than grades K-12, so why do they?

> disagree with the need to have them at any cost.

I think we can all agree with that. I think a sane position is to return to the level of state support of e.g. the 1960s or 1970s. This worked in a substantially poorer US until we chose to stop doing it.

> There's no reason that grades 13-16 should cost more than grades K-12, so why do they?

This is the key point. Like most things, this is driven by policy choices. The choice is made to achieve certain aims, or to ensure other aims are not achieved. We have the object lesson that subsidized college broadly worked in the US until we collectively decided to stop doing it. We can choose differently when there is political will to do so.

FWIW I would suspect that most of the explicit revenue extraction is less about the types of things you indicated and more about the # of full-fare international students a college is able to recruit. There's a huge difference between a $35k in-state student on financial aid and a $55k student who will pay cash.

"We should prefer privatization because public entities are too easily corrupted by those same private companies"

This is my new favorite take on libertarian ideals.

Reagan in to 60's started it by cutting California university funding

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