8 ms·

MIT is known for having a good financial aid program and a large endowment (MIT's is around a third of Harvard's!) could improve that even further. I can imagin

by jfv 9y ago

MIT is known for having a good financial aid program and a large endowment (MIT's is around a third of Harvard's!) could improve that even further. I can imagine that being very impactful in the long term.

demosthenes111 9y ago
Financial aid is just rebranded price discrimination.
- PhasmaFelis 9y ago
  That is literally the term for providing the same product or service at different prices to different markets depending on their perceived ability to pay, yes. You seem to be implying that it's necessarily a bad thing, though.
nshelly 9y ago
72% of MIT undergraduates complete their degree with no student debt [1] and the rest are from families in the top 1-5% of income [2]. Thus, if directed at financial aid, this pledge would only help those from high-income families. If the pledge were used to give a stipend, could MIT attract more low-income students to apply and accept their offers? Giving students from high income families a tuition discount likely won't change their decision to attend, hence price discrimination. To maximize charitable impact with respect to financial aid, it could be argued that instead the funding should go toward other schools so that these all-star, low-income undergrads have more opportunities closer to home. [1] http://web.mit.edu/facts/tuition.html http://web.mit.edu/facts/tuition.html [2] https://www.nytimes.com/interactive/projects/college-mobility/massachusetts-institute-of-technology https://www.nytimes.com/interactive/projects/college-mobilit...
- entee 9y ago
  I personally know several people who were not in that 1-5% who did go to MIT and most definitely have massive student loans. Maybe they do that now, but they definitely didn't in the past.
  - fny 9y ago
    More acendata: In 2009, I forewent MIT because it would have cost me ~$40K a year whereas every other Ivy I got into asked for $15K to $20K a year.
  - nshelly 9y ago
    Agreed, there could be people outside of the top 5% who have loan payments, and those from families earning more than $200,000 who decided not to pay the full amount. With this pledge, maybe MIT can bump up the free tuition level for those from families earning under $80,000 to $125,000 like at Stanford. The number is somewhat arbitrary and depends on the sliding window of tuition rate. After all for well-endowed, prestigious schools, tuition is unhinged from services received / amount of spending per student.
  - koliber 9y ago
    That would mean that the people you know are in the remaining 18% of people. It does not contradict the parent post.
- jfv 9y ago
  Hmm, don't think I understand your first argument. If 72% of MIT undergraduates graduate without loan debt, this almost certainly includes all of the students (29%) coming from the top 5%. There are certainly people that are dissuaded from MIT for cost reasons, and money could be used to solve that problem.
  - uxp100 9y ago
    No, that doesn't follow. Students coming from the top 5% can have loan debt. The top 5% includes many (mostly?) families that could not afford to pay out of pocket for MIT, and even those that could may choose not to.
  - deleted 9y ago
    [deleted]
- daurnimator 9y ago
  What if the money was used to expand and take more students? (rather than subsidising the ones they already have)
  - nshelly 9y ago
    I think this would work, but university prestige is often based on scarcity so few universities do. This is the same reason that Harvard has almost the same number of undergrads as they did 50 years ago, despite an endowment 20x the size.
    - pm90 9y ago
      Is this really true? I always thought this was due to the ridiculous real estate prices in Cambridge.
      - _acme 9y ago
        Cambridge is certainly no where near as expensive as say, New York, so by your logic Columbia should be smaller than it is? A significant portion of a school's ranking (and overall prestige) is the difficulty of admission and the yield, so schools have an incentive not to expend indefinitely (plus there are other advantages of small/medium size).
    - MagnumOpus 9y ago
      > university prestige is often based on scarcity But it is a combination of scarcity and quantity, interestingly. By any measure that is per-student, Caltech grads for instance are far superior to the average MIT grad. However, MIT has better name recognition and looks far better in stats like "number of publications in top journals" or "number of Nobel price winning alumni", just because it has five times as many researchers and pumps out five times as many alums every year. So the winning strategy is to get as big as possible - but only as long as the majority of your intake is still in the top half-percent of the bell curve...
      - nugget 9y ago
- robbiemitchell 9y ago
  Financial aid packages often assume a parental contribution before loans and grants are considered. When there is none, it's on the student to cough up the difference or withdraw. There might be more room to help prospective students than you think. (Speaking from personal experience.)

by jfv 9y ago

demosthenes111 9y ago

Financial aid is just rebranded price discrimination.

PhasmaFelis 9y ago
That is literally the term for providing the same product or service at different prices to different markets depending on their perceived ability to pay, yes. You seem to be implying that it's necessarily a bad thing, though.

nshelly 9y ago

72% of MIT undergraduates complete their degree with no student debt [1] and the rest are from families in the top 1-5% of income [2]. Thus, if directed at financial aid, this pledge would only help those from high-income families. If the pledge were used to give a stipend, could MIT attract more low-income students to apply and accept their offers? Giving students from high income families a tuition discount likely won't change their decision to attend, hence price discrimination. To maximize charitable impact with respect to financial aid, it could be argued that instead the funding should go toward other schools so that these all-star, low-income undergrads have more opportunities closer to home. [1] http://web.mit.edu/facts/tuition.html http://web.mit.edu/facts/tuition.html [2] https://www.nytimes.com/interactive/projects/college-mobility/massachusetts-institute-of-technology https://www.nytimes.com/interactive/projects/college-mobilit...

entee 9y ago
I personally know several people who were not in that 1-5% who did go to MIT and most definitely have massive student loans. Maybe they do that now, but they definitely didn't in the past.
- fny 9y ago
  More acendata: In 2009, I forewent MIT because it would have cost me ~$40K a year whereas every other Ivy I got into asked for $15K to $20K a year.
- nshelly 9y ago
  Agreed, there could be people outside of the top 5% who have loan payments, and those from families earning more than $200,000 who decided not to pay the full amount. With this pledge, maybe MIT can bump up the free tuition level for those from families earning under $80,000 to $125,000 like at Stanford. The number is somewhat arbitrary and depends on the sliding window of tuition rate. After all for well-endowed, prestigious schools, tuition is unhinged from services received / amount of spending per student.
- koliber 9y ago
  That would mean that the people you know are in the remaining 18% of people. It does not contradict the parent post.
jfv 9y ago
Hmm, don't think I understand your first argument. If 72% of MIT undergraduates graduate without loan debt, this almost certainly includes all of the students (29%) coming from the top 5%. There are certainly people that are dissuaded from MIT for cost reasons, and money could be used to solve that problem.
- uxp100 9y ago
  No, that doesn't follow. Students coming from the top 5% can have loan debt. The top 5% includes many (mostly?) families that could not afford to pay out of pocket for MIT, and even those that could may choose not to.
- deleted 9y ago
  [deleted]
daurnimator 9y ago
What if the money was used to expand and take more students? (rather than subsidising the ones they already have)
- nshelly 9y ago
  I think this would work, but university prestige is often based on scarcity so few universities do. This is the same reason that Harvard has almost the same number of undergrads as they did 50 years ago, despite an endowment 20x the size.
  - pm90 9y ago
    Is this really true? I always thought this was due to the ridiculous real estate prices in Cambridge.
    - _acme 9y ago
      Cambridge is certainly no where near as expensive as say, New York, so by your logic Columbia should be smaller than it is? A significant portion of a school's ranking (and overall prestige) is the difficulty of admission and the yield, so schools have an incentive not to expend indefinitely (plus there are other advantages of small/medium size).
  - MagnumOpus 9y ago
    > university prestige is often based on scarcity But it is a combination of scarcity and quantity, interestingly. By any measure that is per-student, Caltech grads for instance are far superior to the average MIT grad. However, MIT has better name recognition and looks far better in stats like "number of publications in top journals" or "number of Nobel price winning alumni", just because it has five times as many researchers and pumps out five times as many alums every year. So the winning strategy is to get as big as possible - but only as long as the majority of your intake is still in the top half-percent of the bell curve...
    - nugget 9y ago
robbiemitchell 9y ago
Financial aid packages often assume a parental contribution before loans and grants are considered. When there is none, it's on the student to cough up the difference or withdraw. There might be more room to help prospective students than you think. (Speaking from personal experience.)