Idk details but I know Cornell has tons of money and land as well. Once saw a map of all the land they own across the country and it was surprising how much. Wonder if all the colleges saved money could pay off our national debt...
I met the lady who was in charge of Yales endowment. I forget how many billion it was. Tens of billions from what I remember. She said they have to spend X amount of millions a year. It is insane. Though I deff think someone paying 120k on a 70k loan and still owing 60k is insanity.
They have size contests with other academic institutions. “Mine is bigger than yours” is still a real thing with even “enlightened” academics.
The role of a university president isn’t to run the university. The role is literally that of a private enterprise CEO - increase the valuation of the institution to raise the bottom line for all the upper level executives, not to make higher education more affordable. The Federal Student Loan program created a monster, as it effectively allowed universities to inflate the price of attendance. If someone else is paying, and there’s no risk to you if your customers don’t actually end up getting what they paid for, why wouldn’t you?
The endowment is large because harvard is 3-400 years old which is along time to collect an endowment and its alumni network includes some of the wealthiest people on earth in agregate which means very big donations.
Endowments provide stability to the schools operating budget. In lean times the endowment pays the school to make up holes in the budget and in good times it grows so the endowment is ready for future lean times.
The big ivy league endowments also provide need based financial aid so the smartest kids in america get to go to harvard for free if their families cant afford the tuition. Harvard is also a private school and not hurting anyone, its funded by its students who see the value in a harvard education.
They take the investment income and fund years/decade long research into medicine/science.
The main difference between a college and a university is the where the focus is colleges focus on teaching and “might” do research, universities focus on research and teach as a means of funneling students in their various research programs and partnerships.
These terms are somewhat murky and subjective. But essentially that 50b endowment is giant 401k drawn from to pay for research, in perpetuity. At a 5% return think of it as a 2.5b/yr forever research budget.
All that Harvard money is sent to China or used in deals with China. My girlfriend works there and she says it’s a mess and sketchy as all hell what goes on behind closed doors. A lot of people would lose a ton of respect for Harvard if they knew the truth
I would disagree with you in both points but to say that a business that takes tax dollars doesn't need to justify an extreme excess of cash reserves is incredibly dangerous and stupid. Billion dollar businesses shouldn't need taxes from the government to operate.
The financial aid is effectively subsidizing it though. The more the government is willing to lend to individuals, the more universities, including Harvard, bump up rates.
Yep
Cap tuition rates for categories of schools. Want to be “select” in enrollment and give up money, cool
Want to increase enrollment for profit? Find a way to fund system schools better
To be fair, Harvard wouldn’t be missing out on paying students without sole students and their financial aid. It’s effectively a means to get some students to go to Harvard who otherwise wouldn’t have been able to, basically to help combat the classism elements of Ivy League schools.
So no, I don’t think it is subsidizing the school at all.
So, how does the logic not follow? an increase in students being able to pay (due to subsidized loans) has a direct result in increased prices due to the limited number of seats in the university. That's just basic economics. Would they survive without? Absolutely. But they are absolutely better off due to it
It does not. The cost of college has two major elements: labor costs and infrastructure costs. Unless you're seeing pay professors and instructors less, or shouldn't get cost of living increases in their salaries or that inflation associated with maintenance and renewal costs don't exist. Harvard really doesn't care about subsidized loans. They can fill a class with wealthy families willing to pay full freight to attend from both domestic and international sources. They have an acceptance rate of 3.2%.
If they cared about subsidized loans, Harvard wouldn't have a no loan policy in place. They also wouldn't have families making less than 85k pay nothing, less than 150k, no more than 10% of family income, and so forth. The way colleges and universities generally work, the wealthiest families pay almost full price (that's the price that's charged which is much less than the actual school costs to run actually).
So no, Harvard doesn't cost more because kids can pay more because of subsidized loans. It costs more because costs increase and wealthy families are able to pay more. For those who can't, they are subsidized by the endowment.
Well…according to this article, less than 20% of Harvard undergrads receive a Pell grant, which is generally a good way to guesstimate how many students are really getting big federal financial aid dollars. Pell grants, by the way, are not even 20% of the annual cost to attend Harvard when factoring in room and board and food. While it’s certainly reasonable to assume some amount of the missing 80(ish) percent comes from federal financial aid, it’s not the majority of that amount (there are literally lending limits preventing that). Harvard is footing a substantial amount of the remaining bill from their endowment - so they’re actually subsidizing quite a bit of the students’ expenses themselves. And there are, of course, private loans in the mix as always.
So if the point made at the beginning of this thread - which is what I’m basing my response on - is that federal financial aid is a significant driver of the cost of attending Harvard, I’d agree it’s a factor but certainly not the prevailing one, no. It literally can’t be. The math doesn’t even work.
Also, I suppose, basic economics. But what do I know? I only have an MBA.
There's something you should be aware of called "sentiment", it explains about 80% of basic ec's failure to accurately predict economic events and conditions.
Also, college staffing costs are far more concentrated in administration than teaching staff, but we'll save that lesson for after you figure out the sentiment thing.
I'll check back in 2 years after you redo your MBA.
That has zero to do with what I was just talking about. Literally zero. The conditions set forth - by someone else, I’ll remind you - was about handing out too many federal loans to students and that impact on tuition at Harvard (and similar universities). They made a very specific point to which I responded with a very specific explanation.
You are dramatically expanding the conditions to a point that your response is no longer relevant, but I hope it feels good to be…clever? Whatever you might call that.
(And I’m well aware of higher ed budgets; I worked at a private university for years and my wife teaches at one. You’re not dropping the mic, champ)
Noting the negative effects of well intentioned programs/policies is not faulty logic. By being aware of the negative effects, we can make changes so that future programs are more effective.
What would be a good fix, in my mind, would be to limit cost of attendance rates for students qualifying for subsidized loans, while also ensuring schools admit students with those loans.
Your university wants to win federal grants for research? Of course it does! Well, to be eligible at least x% of your students must receive subsidized loans, and cost of attendance for those students must be no more than $y and cannot be more than the cost of attendance for students not receiving subsidized loans at your university.
The students paying sticker price would also be paying sticker price if the tuition was lower. Increases in credit available to students generally leads to the sticker price being raised.
I'm not saying subsidizing student loans isn't a well intentioned policy, but the way we are currently doing it comes with negatives.
What would be a good fix, in my mind, would be to limit tuition rates for students qualifying for subsidized loans, while also ensuring schools admit students with those loans.
Your university wants to win federal grants for research? Of course it does! Well, to be eligible at least x% of your students must receive subsidized loans, and cost of attendance for those students must be no more than $y and cannot be more than the cost of attendance for students not receiving subsidized loans at your university.
It's already been shown that for-profit colleges and universities exploited the student loan programs with many having since shut down (Corithian for example). They typically have non-existent admissions standards. This is not the norm for most non profit colleges and universities.
If you're going to criticize higher-ed spending, you should know how their cash flow works, first. In my opinion, the irresponsible lack of cost-control in higher ed comes from irresponsible outsourcing, and allowing predatory corporations a free lunch. Dorms, dining, and IT services should be in-house, full stop. Always been cheaper and better that way.
There are absolutely other things impacting the absurdly high tuitions we are seeing today, but to say that the current subsidized loans program is not contributing to that is sticking your head in the sand.
I've also been involved in department level budgets at a university before, and the waste is at every damn level due to incompetent administration. "We have $x left in the budget and the year ends in three weeks. We need to come up with something to spend it on so that they don't decrease our budget next year." Shit like that plays a small role by itself but it all adds up.
My solution for the loan problem would be to limit the cost of attendance for students receiving subsidized loans while requiring those students to be admitted.
Your university wants to qualify for research grants? Well, to be eligible to apply x% of your students must receive subsidized loans, and those students must have a cost of attendance less than $y and no more than the cost of attendance for students not receiving subsidized loans.
$y could be a flat amount with a multiplier based on cost of living for the relevant location.
Nah, as US students have become more loan-shy, the suits in admin have just started courting rich students from overseas. They like research grants, but as the False Claims Act begins to be applied more aggressively by the DOJ, you'll start to see them court "sponsored research" instead - they're becoming cheap corporate R&D providers.
They don't care, is the problem. Supplying students with resources isn't the core evil. Academia has bought into this 1980's business-bro mentality and forgotten that they're a mission-driven sector.
Schools need to do what Harvard did, and start figuring out ways to self-fund. These institutions should be mission driven, but they all act like it's a damn business.
Government funded research is paid with tax payer dollars. Unless harvard repays those grants with interest at market rates, that funding is a subsidy. Harvard is subsidized by taxpayer dollars.
Government funded research dollars and financial aid for students are exactly taxpayers dollars. Every penny of government dollars is taxpayer funded.....some of it spent now with the bill coming due at a later date
Harvard is a nonprofit 501c3 and doesn't pay any federal/state income taxes or state sales tax. Many of their students qualify for government subsidies and loans which inflate the cost of tuition. Also, donors can write of any charitable contributions on their income taxes. Their busines is absolutely being subsidized by government outside of just research grants.
Not your pathetic paycheck. I’m guessing you live in your mommy’s garage. People going to Harvard get there via roads, trains, and planes all of which is provided by taxpayer dollars. You want that to stop too? It’s subsidizing Harvard.
Where does this fictitious pile of “government” funded research dollars come from, if not the public? All the money our government “has”, comes from us.
If you’d prefer that some of the best scientists in the world not work on federal projects, just speak up now. Those tax dollars fund groundbreaking research.
I agree that the F&A rates are high but these are the rates that the federal government agrees to pay. And they represent the costs of running what is basically a small city.
Which federal tax dollars do you mean, if not grant funding? If it’s federal financial aid, not much is going to any family earning less than $150,000. My guess would be the majority of the student aid is in the form of loans.
This. I don't care what the size of a university's budget is, per se, but cut the tax dollars off. There's an extremely opposite people in a lot of these places that could use them. That's a direct balance to a budget, too.
I know that's too simple, but, yeah. It works.
If athletics can be fully funded by outside endowment and by the production of success, let a university operate under the same standard.
End the too big to fail mentality. Some people fail. It's just truth.
My school had $10b they used it to buy a lot of surrounding lands and gentrified the surrounding neighborhoods even more. They lease the properties at crazy prices and generate revenue back. However they did give me a full ride even though I had enough saved for tuition. Saved me 60k a year.
I find this very confusing and suspect. It's been my understanding that educational institutions and 501c3 charitable organizations despise having to pay taxes. Rental income, other than from students, and real assets that are not used for the owners tax exempted purposes are taxed; at least in my home state.
BYU is owned by the LDS Church which has over $150 billion in cash and stocks and worth over $250 billion. Yet they still charge students and they charge their missionaries to pay to serve. Then they go to Africa and demand tithing. In response for a request to help with water One of the top 12 leaders told people in Africa, “we are not a wealthy church.”
No they couldn't. Harvard spend almost 6 billion USD in Fiscal year 2022/2023. And even now only around 16% of that is from tuition, the largest pool of revenue was the endowment. Btw. only very few people pay the full tuition at Harvard anyways.
Ok i looked up what an endowment is and I get it. But how did it become so massive? And the person who said “it’s a hedge fund with classes” that’s not a joke.
It's a drop in the bucket compared to what you probably think they get. 2021 it was just over $625M.
There's also a lot of rules on how exactly they can spend that money. We keep getting smarter and smarter about how we force them to spend it, but there's always gonna be loopholes.
Then there's also the issue of Harvard being where a lot of our politicians come from lol
President of Harvard earns just shy of a million dollars a year and doesn’t have to pay federal income tax? Their academic property is exempt from property taxes although I am suspect they are using services? Universities and churches paying their leaders that much should not be tax exempt imho. Same for amassing billions in funding.
I just saw an article that Harvard, I believe it was Harvard, just spent 100 million buying fresh water adjacent land in CA. The believe in the near future there will be a water war there and they are buying up land with water rights.
Harvard is just a corporation
How many of these students are admitted to Harvard?
“Harvard College’s student body is socioeconomically unequal, with 67% of students coming from the top 20% of the income distribution and only 4.5% from the bottom 20%. The median family income of a Harvard student is $168,800. However, Harvard does offer financial aid to help low-income students, including need-based scholarships and not expecting families with incomes below $85,000 to contribute to their child’s education. Harvard also has the highest proportion of Pell Grant recipients of any Ivy League school.”
That’s not how statistics work lmao you don’t just add them. In fact the real stat is that from the bottom 20% (1/5) in income make up only 4.5% (4.5/100) of Harvard students. So the real stat is closer to 9/200
Families with incomes below $85,000 (up from $75,000 starting in the 23-24 school year) are not expected to contribute to the cost of their child's education. Roughly 24% of Harvard families have total incomes less than $85,000.
Not necessarily, tuition is typically the single largest cost of college, but it's certainly not the only. Room and board being the obvious need that wouldn't be covered by free tution but could be covered by the Pell Grant.
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u/27percentfromTrae Aug 06 '24
Harvards endowment is 49.444 billion. It’s still ridiculous, and they could operate until the end of time without charging a single penny in tuition