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How could MIT sustainably afford to make tuition free? Genuine question. That's a pretty bold assertion.

by vecter 11y ago

tanker 11y ago
That's an interesting problem. I have a few ideas 1) Replace tuition with taking x% of income for y years following graduation. I'm not sure how this would work in regards to low-income degrees / departments. For example, would the low return on investment for an arts department mean it would get less funding? I suppose this would cause universities to optimize their education for earning potential of graduates. Could have interesting effects. Not all beneficial. 2) Could they use their endowments to essentially provide interest free loans? I'm guessing their would be lots of problems with this that I can't see. 3) You pay nothing while in school, but you pay a straightforward fraction of the school's operating costs for the next x years. I like this concept. If you make x long enough, your graduates have an interest in ensuring future students are able to contribute to the cause. Of course, they also have an interest in keeping costs low. That could create poor dynamics. Improvements would have to come from donations, not be a part of the budget.
jon-wood 11y ago
Presumably using the proceeds of the hedge fund they're running on the side.
- vecter 11y ago
  Have you actually done the math to show this works out in the long run?
  - jqgatsby 11y ago
    http://web.mit.edu/facts/financial.html http://web.mit.edu/facts/financial.html In 2015, tuition accounted for only 10% of MIT's yearly revenue (~$331M), so you have to cut the rest of the budget by 10% to give everyone free tuition. One natural area to focus on is yearly administrative costs, which in 2015 were $763M. If you gradually cut administrative costs by building fewer beautiful buildings for undergraduates to be indebted in or hiring fewer administrators, you can afford for every undergraduate to attend tuition free.

How could MIT sustainably afford to make tuition free? Genuine question. That's a pretty bold assertion.

by vecter 11y ago

How could MIT sustainably afford to make tuition free? Genuine question. That's a pretty bold assertion.

That's an interesting problem. I have a few ideas 1) Replace tuition with taking x% of income for y years following graduation. I'm not sure how this would work in regards to low-income degrees / departments. For example, would the low return on investment for an arts department mean it would get less funding? I suppose this would cause universities to optimize their education for earning potential of graduates. Could have interesting effects. Not all beneficial. 2) Could they use their endowments to essentially provide interest free loans? I'm guessing their would be lots of problems with this that I can't see. 3) You pay nothing while in school, but you pay a straightforward fraction of the school's operating costs for the next x years. I like this concept. If you make x long enough, your graduates have an interest in ensuring future students are able to contribute to the cause. Of course, they also have an interest in keeping costs low. That could create poor dynamics. Improvements would have to come from donations, not be a part of the budget.

jon-wood 11y ago

Presumably using the proceeds of the hedge fund they're running on the side.

vecter 11y ago
Have you actually done the math to show this works out in the long run?
- jqgatsby 11y ago
  http://web.mit.edu/facts/financial.html http://web.mit.edu/facts/financial.html In 2015, tuition accounted for only 10% of MIT's yearly revenue (~$331M), so you have to cut the rest of the budget by 10% to give everyone free tuition. One natural area to focus on is yearly administrative costs, which in 2015 were $763M. If you gradually cut administrative costs by building fewer beautiful buildings for undergraduates to be indebted in or hiring fewer administrators, you can afford for every undergraduate to attend tuition free.