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The largest barrier to entry to starting a new University is prestige. Accreditation is a challenge, but is doable. Gathering enough capital is a challenge, b

The largest barrier to entry to starting a new University is prestige. Accreditation is a challenge, but is doable. Gathering enough capital is a challenge, but is also doable. New institutions of higher education are started all the time. But when was the last time you saw a Harvard started? Imagine the following thought experiment: the entire faulty of Harvard goes off and starts a new University (call it Garvard). Now, obviously, the quality of education at this new school is going to be just as good as Harvard. But which school are parents going to want their children to go to: old Harvard, with a newly hired crop of top professors, or Garvard, with the original professors? I suspect that Garvard would get less applicants, and would likely have to charge less. This market force is why the cost of education is going up quickly while educator salaries are not rising as fast. In higher education right now, branding is more important than product.

nshelly 10y ago
Probably the late 19th-century, when Stanford, MIT and Caltech were founded. They are all now competitors to Harvard. "Good" universities benefit from outsized tax-sheltered endowments, which can be spent on anything from rock climbing walls, employee perks and bonuses, restaurants, accommodation to land acquisition. Let's do another experiment, what if Harvard's $36 billion endowment was swapped with that of a less prestigious university in a major city, say Seattle University (SU). With now an almost $2 billion in annual expenditure, SU could hire some great faculty, and invest heavily in R&D. Meanwhile, Harvard would need to rely on huge tuition increases (via student loans), equaling $160k a year per student, as each student currently indirectly receives an additional $100k per year in endowment spending, and minimal financial aid. Maybe some wealthy alumni could try and prop it up, but I think it would take less than a generation for Harvard's prestige to sag, and SU's to soar.

nshelly 10y ago

Probably the late 19th-century, when Stanford, MIT and Caltech were founded. They are all now competitors to Harvard. "Good" universities benefit from outsized tax-sheltered endowments, which can be spent on anything from rock climbing walls, employee perks and bonuses, restaurants, accommodation to land acquisition. Let's do another experiment, what if Harvard's $36 billion endowment was swapped with that of a less prestigious university in a major city, say Seattle University (SU). With now an almost $2 billion in annual expenditure, SU could hire some great faculty, and invest heavily in R&D. Meanwhile, Harvard would need to rely on huge tuition increases (via student loans), equaling $160k a year per student, as each student currently indirectly receives an additional $100k per year in endowment spending, and minimal financial aid. Maybe some wealthy alumni could try and prop it up, but I think it would take less than a generation for Harvard's prestige to sag, and SU's to soar.