11 ms·

The Uncharity of College: The Big Business Nobody Understands

292 points by cjmb 8y ago

cjmb 8y ago
Author here. Another long read -- apologies! The TL;DR of this essay might perhaps be: - College degrees are more valuable than ever in post-industrial economies, so applicants to top-tier schools are up 240% over the last 25 years - Meanwhile, available spots at top-tier colleges in America have increased just 2% over the last 25 years (Thanks to Tyler Cowen & others for complaining about this publicly) - Microeconomics 101: Fixed Supply + Increased Demand = Increased Price - That’s the obvious part - The non-obvious part is that this is intentional... - ...because the Charity-status ( 501(c)(3) ) of Colleges in America depends on more-than-half of their students being unable to afford the education (read: “receiving financial aid”) - That Charity-status protects the Investment Returns of College Endowments from Uncle Sam & the IRS - Investment Returns Compound over time, and there is no more powerful force on Earth — anyone not playing the game to maximize Compound-returns will lose to everyone who is - Thus: if Colleges want to keep their Investment Returns tax-free, Tuition MUST remain unaffordable for at least 50% of undergrads
- kermittd 8y ago
  Thanks for the quick breakdown. Reading now...college is a subject I’m endlessly fascinated by.
- assblaster 8y ago
  Do you see a responsibility of the federal government in lending money to students who have no ability to reasonably pay back their loans because their degrees don't have a high rate of return? Do you see a problem with universities increasing the quality of student housing, sports programs like football, and college administration, and that this desire to spend more to get more students to pay more tuition dollars is an undesirable feedback loop that perpetually increases tuition costs over time?
  - Matticus_Rex 8y ago
    > Do you see a responsibility of the federal government in lending money to students who have no ability to reasonably pay back their loans because their degrees don't have a high rate of return? Can we all agree that this is an awful idea societally and for the individuals involved? If you couldn't get credit to go, it's because the market is sending a signal that it's a really bad idea to go. Yeah, it sucks if your dream is to do [insert unmarketable degree here] and there are few jobs for people who do that and the training costs just as much as an engineering degree. The idea that "society" should subsidize that is narcissistic at best.
    - prater 8y ago
      We absolutely cannot all agree on that. As you point out - the fact of the matter is that an undergraduate degree in business, engineering or medicine costs the same as a degree in art, social work or childhood education and pays about 3-4 times as much. So it's individually quite stupid to major in anything _other_ than engineering, business or premed. Do you really think a society is going to function without teachers, psychologists, lawyers and artists? So in that case can we all agree that arranging the incentives so that the only thing Universities produce are engineers, MBA's and medical professionals is an awful idea societally and for the individuals involved?
      - assblaster 8y ago
        But why does the "degree" require paying for college football or fancy dorms or student entertainment? College has lost its focus on education and, nationally, colleges are competing on providing amenities and costs of college are skyrocketing. Wouldn't it make sense to bring college education back to its original purpose?
        CamTin 8y ago
        Which original purpose? The elite school one of allowing the next generation's ruling class to network with one another, or the land grant one of doing the same thing for flyover country, but also discovering new ways of applying fertilizer at the same time?
- travisoneill1 8y ago
  > the Charity-status ( 501(c)(3) ) of Colleges in America depends on more-than-half of their students being unable to afford the education This would still be true even if college cost 10x less than it does now. Very few 18-22 year old full time students can afford any level of tuition.
  - bilbo0s 8y ago
    I guess it might be more precise to say that it depends on the familiies of most students being unable to afford tuition.
- analog31 8y ago
  A minor quibble: The ratio of admissions to applicants is kind of a funny number. Applications could be driven by an external factor such as online application systems and word processing making it easier to apply.
  - hkmurakami 8y ago
    Colleges have amped up their marketing budget to increase the top of the funnel as well.
  - sn41 8y ago
    Foreigner here ... can confirm this. The application process to US universities has gotten much better compared to 20 years ago. Back in the day, we needed to pay application fees+international postage. Now, the second part has gone away. The first part, surprisingly, has not gone up by much.
  - extra88 8y ago
    Yes, and the improvements in financial aid at elite schools makes them as affordable as a state school so applying to them is a low cost gamble.
- ropeladder 8y ago
  "...because the Charity-status ( 501(c)(3) ) of Colleges in America depends on more-than-half of their students being unable to afford the education (read: “receiving financial aid”)" I wasn't aware of this at all. Do you have a source? Non-profits don't generally need to give away their money.
  - cjmb 8y ago
    For sure, you’re totally right that non-profits don’t generally need to give away their money. I tried to touch on this idea in the “Case for Charity: A Charity Case” section, but my approach is to view it idealistically / as things should or might be. And in a hypothetical world where Colleges charge double-digit fractions of a family’s net worth, while generating as much investment profit as our best companies and hedge funds, but where 0% of students received any “aid”...... .....and the institution was still allowed to remain a non-profit and have returns tax-sheltered.... ....I can’t imagine that such a state of affairs would be allowed to continue. Which organizations are allowed to be considered 501(c)(3) and on what basis and what privileges that affords them is a matter that is hypothetically at the prerogative of Congress. I know trust in Congress/the political process is pretty damn low these days. But my point with the “best play it safe” comment was basically...if I were colleges, I wouldn’t roll the dice.
    - firethief 8y ago
      But no one is "colleges", if they're each acting in their own best interest. I don't see how this argument explains their behavior unless colleges are coordinating as a cartel. What's keeping them each in line?
      - mcguire 8y ago
        One of the points in the article is that this tier of colleges have been operating as a cartel since before the 1990s.
        firethief 8y ago
- skybrian 8y ago
  Since you're using MIT as an example, it says here [1] that 90% of students get financial aid. I doubt that's changed much. The "sticker price" for elite colleges has always been too high for most families to afford, but most students' families don't pay that price. If you want to prove that maintaining charity status is a cause of tuition increases, you'll have to try harder. [1] https://web.mit.edu/facts/tuition.html https://web.mit.edu/facts/tuition.html
  - secabeen 8y ago
    The college board publishes a nice charge of net cost of college: https://trends.collegeboard.org/college-pricing/figures-tables/average-net-price-over-time-full-time-students-public-four-year-institution https://trends.collegeboard.org/college-pricing/figures-tabl... Room and Board is a major driver of the increased cost of colleges.
dhruvp 8y ago
Wow this essay is fantastic. The idea that the amount of people who "need" financial aid has stayed constant while tuition prices have increased 170% (way outpacing wage growth) is unreal. Conrad if you wrote a book about this I would buy it. Super fascinating stuff. Colleges are clearly massive financial instruments that need to be analyzed further.
- dfgert 8y ago
  I doubt analyzing university would do much since its already a common knowledge at this point still nothing is happening. Government and legal institutions are ineffective in solving problem where solution results in loss in profit. Building alternatives to universities that are driven by grass-roots movements are the perfect way forward here. Home schooling, MOOCs and startup businesses are some of the developments that have started diminishing the need of expensive degrees.
  - bumby 8y ago
    What I think will be interesting in the next few decades is if universities will maintain their monopoly on accreditation or if they will lose that like they did on their monopoly of education. As long as there's a need for degrees as a signal for baseline competence/barrier to entry, it seems those needing it will be at the mercy of the systems that provide it.
    - wallace_f 8y ago
      > a need for degrees as a signal for baseline competence/barrier to entry The signal is valuable. The unnatural barrier to entry is, at best, unethical. Ideally, the barrier to the opportunity to earn the credential would not exist. It should be available to everyone worldwide. Individual research positions should be applied for. Certain practical skills must be taught in labs, etc. But the vast majority of intellectual effort in a Harvard degree should already have all its coursework and testing available to everyone, and at reasonable cost. Otherwise it is not an open competition, it is an institution promoting socioeconomi status.
sn41 8y ago
Does anybody know what are the major running costs involved in a university? What I found disturbing in the (public midwestern) university where I studied are the luxurious sports complexes that kept popping up, whereas many classrooms were poorly heated and ventilated. As far as the staff is concerned, I hear that teaching and tenured positions are being reduced in favour of increasing administrative staff and corporate-style bosses. The peripheral processes seem to be eating up the core, much like one of those parasites which thrive as outer shells long after their host trees are gone.
- qaq 8y ago
  the ratio is shifting dramatically toward admin side
  - ams6110 8y ago
    Yes. Administrative staff, and spending on dubious things such as e-textbooks, LMS systems, online learning and IT in general is out of control.
  - secabeen 8y ago
    Do you have a citation for this? The data I have shows that on a real basis, expenditures at state schools for administrative services are largely flat: https://nces.ed.gov/programs/digest/d16/tables/dt16_334.10.asp https://nces.ed.gov/programs/digest/d16/tables/dt16_334.10.a...
    - qaq 8y ago
      https://www.theguardian.com/commentisfree/2017/aug/21/universities-broke-cut-pointless-admin-teaching https://www.theguardian.com/commentisfree/2017/aug/21/univer... I think looking at top level figures could be problematic because we don't really know how classification was done.
      - secabeen 8y ago
        Intetresting. That's UK, which is a totally different system, but still neat.
deleted 8y ago
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rossdavidh 8y ago
Fascinating article. A question I ponder is: given that, as I believe is true, the student loan bubble is going to burst in a messy way sometime in the next few years, what happens to the college industry at that point? The last time it happened they made it illegal to discharge student loan debt in bankruptcy, but the rates of people unable to make payments is going up again, and at some point it will cause a financial problem, I would think. Does any of this calculus change if the student loan industry goes bust?
- unimpressive 8y ago
  What makes you think it's a bubble? Just because something is unpleasant, or even outright evil doesn't make it a bubble. Perhaps at some point an equilibrium is reached where these institutions extract exactly as much as the degree is worth, minus the little bit left that will incentivize people to take the deal. After all, the 'value' of these degrees has only gone up. Overproduced malthusian elitehood[0] has to be better than starving with the unnecessariat[1], maybe[2]. We are after all already at the near-apocalyptic scenario. Economically disenfranchised liberal arts graduates are roaming the earth and using the only skills they have to extract resources from the environment. In practice this amounts to a sort of Trust Me I'm Lying dystopia of manufacturing outrage with one hand and selling solutions on the other. For calibration, many students in the UK have turned to literal prostitution[3]. [0]: https://nationalpost.com/news/world/jonathan-kay-on-the-tyranny-of-twitter-how-mob-censure-is-changing-the-intellectual-landscape https://nationalpost.com/news/world/jonathan-kay-on-the-tyra... [1]: https://morecrows.wordpress.com/2016/05/10/unnecessariat/ https://morecrows.wordpress.com/2016/05/10/unnecessariat/ [2]: https://berthamasonsattic.wordpress.com/2018/10/12/i-applied-to-200-jobs-and-all-i-got-was-this-moderate-severe-depression/?src=longreads https://berthamasonsattic.wordpress.com/2018/10/12/i-applied... [3]: https://www.independent.co.uk/news/education/education-news/students-sex-work-prostitution-webcam-university-tuition-fees-education-a8614186.html https://www.independent.co.uk/news/education/education-news/...
  - antt 8y ago
    Anything that grows exponentially is a bubble. The only question is when it stops growing because it has run out of space. A simple example is that if Caesar had invested one gram of gold after the conquest of Gaul at 3% compound interest today it would be worth 2.64e24 dollars. Or a trillion times larger than the world economy today.
absherwin 8y ago
The underlying assertion is that universities must provide financial assistance to the majority of their students to be considered tax exempt. No citation is provided. 26 USC 501(c)(3) explicitly lists an organization operated exclusively for educational purposes as being tax exempt. Charitable organization is listed as a separate type. Also worth considering is the example of Cooper Union: It charged no tuition and therefore offered no financial aid for most of its history. While one could argue that that is a form of aid so too would any other tuition reduction enabled by an endowment. This further suggests that universities do not set tuition in order to maintain tax exempt status.
- elliekelly 8y ago
  I believe the post is referring to the 501(c)3 status of the endowment, which is basically a trust fund, and is not operated exclusively for educational purposes.
  - absherwin 8y ago
    Two thoughts: Funds are explicitly mentioned as acceptable entities in 501(c)(3). For what non-educational purpose are endowments used? While some uses may seem tenuously connected to a given observer, all are determined to further the university’s mission in some way.
    - elliekelly 8y ago
      > For what non-educational purpose are endowments used? Most of the money is used to make more money tax free. i.e., it's invested & managed by Wall Street. Edit to add I wasn't suggesting the type of entity mattered re: 501(c)3 status but rather was pointing out that the endowment fund is an entity separate and apart from the educational institution.
      - absherwin 8y ago
        The point you’re raising is that an endowment could simply exist to make money for its own sake. The IRS combats this by requiring a minimum distribution of 2/3 of the endowment’s minimum return (which tends to be lower than actual). See https://www.irs.gov/charities-non-profits/private-foundations/private-operating-foundation-endowment-test https://www.irs.gov/charities-non-profits/private-foundation... for details.
wallflower 8y ago
I have not yet read through all of this 2013 IRS Official ”College and Universities Compliance Project - Final Report”. However, nothing so far talks about tuition and 50% attending receiving financial aid. The 50% rule may be based more on 501c(3) spending at least 50% of their income on “their mission”. This seems to be the latest legal reference with regard to colleges and universities retaining 501c(3) status. > Of total endowment distribution, 56 percent were made for scholarships, awards, grants and/or loans in the amount of $3 million. 29 percent of total endowment distributions were made for general university operations in the amount of $3 million. Off-topic: > Half of the systems reported that at least one of its five most highly paid employees received NCAA income. https://www.irs.gov/pub/irs-tege/CUCP_FinalRpt_042513.pdf https://www.irs.gov/pub/irs-tege/CUCP_FinalRpt_042513.pdf
- throwawayjava 8y ago
  A crucial distinction: Of total endowment distribution is VERY different from of total spending. Tuition-dependent colleges and universities tend to look very different from their large endowment counterparts.
secabeen 8y ago
This article is interesting, but it makes the fundamental error of assuming that the primary product of an R1 research university is education for undergraduates, which it is not. The primary product of an R1 research university is research, largely performed by Graduate Students, Postdoctoral Researchers and Professional Researchers. All of these are paid a salary of some form, some market-rate, others less-so. That's where the cost is, along with actual costs of instruments, libraries, consumables and buildings necessary for cutting edge research. Most of the funding for that comes from research grants and you can see how it represents a huge fraction of the budget in his charts. Unfortunately, all of the expenditure data that the Education department puts out combines both R1 and non-R1 institutions, so it's hard to see just how different the top 120 schools are from most of the rest. If you have expenditure data segmented by research intensity, I would love to see it. The undergraduate education is part of the university, but not the primary part. (At UChicago, grad students still outnumber undergrads!) If you want to see what the finances of an institution that primarily educates undergraduates looks like, go to one of the Liberal Arts colleges, or non R-1 state schools, like any of the Cal States in California, or non-flagship schools in other states.
- throwawayjava 8y ago
  > go to one of the Liberal Arts colleges, or non R-1 state schools, like any of the Cal States in California, or non-flagship schools in other states. ...and look at the instructor's salaries. PhD's from top universities who could easily make 300k+ in the private sector but instead take positions that pay 60k-70k. Even with tenure, that's a labor of love. Blaming highly paid admins would be great, except that university presidents at teaching colleges are the highest paid (reminder: branch campuses and liberal arts colleges never have Div 1 sports programs) and still make $50k-100K less than a green phd out of a top 10 CS program (200k is good money for a president of a branch campus or liberal arts college -- and remember, that's typically a person with 30+ years experience and a uniquely positive track record). I worry about what will happen to the American teaching college (public or private) over the next 50 years if the current war on college -- which this article typifies -- wins out in the public mind. If you doubt a single word of this feel free to reply to this comment. I'm extremely familiar with both markets. When I say that (even tenure-track) CS teaching requires a 200k paycut, I really do know what I'm taking about.
smarttack 8y ago
I worked in the industry selling and designing software for Financial Aid offices. You are simply a SSN to them which equals $##,000 in potential revenue
DanielBMarkham 8y ago
This is a nice essay. I learned some things I didn't know before. There's a pattern here in public policy-making that needs further attention. We have slogans and phrases that become untouchable. "Clean water" is one. Who isn't for clean water? I've never met anybody who wanted water to be dirty or poisonous. In the states we've had a very powerful movement called "Mothers Against Drunk Driving". Once again, who the hell would be in favor of allowing drunks to drive? These titles are self-evidently good things. It goes on and on. I'm a fan of learning more about Universal Basic Income. We solve poverty by, well, giving people money. We do it anyway through social programs. Why not give it directly? (I don't know. Let's see what happens in various experiments) "College" is yet another one of these magic phrases. Who isn't for college? Higher education? I just read another commenter on here that said we should stop this "war on colleges" That's why I'm commenting. The pattern is this: there's a phrase or slogan that nobody in their right mind would oppose. Lots of people and emotional energy is put into making sure we have this goodness for everybody. People who provide any sort of feedback at all aside from unanimous support are shunned. And they should be! After all, they're against $GOODNESS_X Then we start spending money and making public policy around the phrase -- and the results can be quite mixed. Since the phrases themselves mean little, it's all about the tiny details, the implementation. Some groups do this thing very well. Some suck at it. Over time, however, in every one of these situations, architectural cruft accumulates and people figure out how to game the system to make it do things nobody ever intended. Well then we're kind of stuck, aren't we? You can't provide any feedback aside from full support, otherwise we'll shun you. We established that when we started this movement. Colleges not working at the things the common person thinks they're supposed to be working at? Prices way up, graduates sometimes deep in debt with useless skills, use of the collegiate corporate structure as a proxy for a modern country club? You point that out and you're one of those anti-intellectuals fomenting a war on colleges. The public discussions around dozens of policy initiatives suck. And they suck because the concepts have been so bowdlerized that we're all forced into false dichotomies. And technology, by continuing to promote the concepts that these huge, intricate, and detailed policy issues can be discussed at in terms of 140-character tweets or something similar? We've got a huge hand in making things as sucky as they have become. We're making a buck off of making people stupider than they would normally be and having them fighting over things they would normally mostly agree about. In my mind this is a terrible thing that my community is mostly responsible for.
Synaesthesia 8y ago
University as a business is not the ideal model for education. It should be publicly owned and funded and all free, like it is in Germany.
- zwaps 8y ago
  This is an interesting assertion, because there is certainly pro's and con's. I am working in Germany now (in a "good" university) and I often visit top tier US universities. Due having money, US universities at a similar relative rank have vastly bigger faculties, vastly better supply of researchers and usually better admin. And it is not even close. Network effects among researchers are much, much stronger. Combine this with the fact that the German system has unecessary deficiencies. The appointment system is f'ed beyond repair and it is virtually impossible to offer positions to good prospective researchers. The "Mittlebau" lacks any and all good career track and is made up of disillusioned and hopeless people on 2-year successive contracts (and nowadays, it is missing entirely). And of course, there is no real tenure track, which means a lot of Profs are really bad and would have never gotten tenure in a meriocratic process. Since we have a couple of privately funded places that do the US system here in Germany, we can see that it just simply works much better. On the other hand, in terms of long term stability and the average quality of education, I agree that the US system has issues. Relying on inflated undergrad fees, especially from international student, seems dangerous in the long term.
- sudden 8y ago
  It should be fully privatised, actually.
namuol 8y ago
This suggests that the "wealth gap" (Endowment gap) of colleges in the US is increasing, probably at an accelerating rate. This is probably not a good thing. I wonder how much of a difference the tax-exempt status is a factor in the growth of e.g. MIT's endowment. Was this tax-exempt status ever in jeopardy? It's unclear from the article whether this status was part of the failed anti-trust suit, but the article does seem to suggest this is the underlying problem.
lordnacho 8y ago
Why hasn't someone done this yet? - You make an organization that just examines people in various subjects. - You hire a bunch of professors in each field. - You make sure everyone thinks the exam is hard. - You make sure the exams are fair. Rent exam halls, get invigilators to pace up and down. Biometric scans. Passports. Etc. - You make the syllabus and practice exams freely available. - You make a secure website to show everyone who passed. There must be something similar, somewhere. Perhaps the Chinese civil service exams. Or the CFA exams.
- lmm 8y ago
  1. Suppose you're an employer. You see a candidate who did some radical education program you haven't heard of and know nothing about the details of, instead of going to university. Your natural assumption (because it's correct in 95% of similar cases) is that this is someone who wasn't good enough for university. It's the same for a professor who got involved - everyone else in the field would assume they couldn't get a university position, or really needed the money. For the people who could give credibility to such a venture, there's only downside. 2. When the exam is cheap and the only source of credit, fraud is a much bigger risk than for normal university exams. Apart from anything else, outright bribery is now a risk at every level in the process, because a good exam result is worth far more in lifetime earnings than you can afford to pay anyone involved.
  - lordnacho 8y ago
    > 1. Suppose you're an employer. You see a candidate who did some radical education program you haven't heard of and know nothing about the details of, instead of going to university. Your natural assumption (because it's correct in 95% of similar cases) is that this is someone who wasn't good enough for university. But you can see the questions yourself. If you did a degree you'd know if it was the sort of level that you'd expect from a university student. If someone can answer university level questions, why do they need to go to university? As for the profs, you can hire them from the same universities. They're allowed to work on the side. > 2. When the exam is cheap and the only source of credit, fraud is a much bigger risk than for normal university exams. Apart from anything else, outright bribery is now a risk at every level in the process, because a good exam result is worth far more in lifetime earnings than you can afford to pay anyone involved. Sure, so rent a hall, make people walk through a metal detector, etc. Make sure the papers are seen by several randomized people. It's a trust building exercise, that's true. But plenty of businesses depend on trust, and it's not like nobody has managed to build trust before.
known 8y ago
Sounds like an example for https://en.wikipedia.org/wiki/Invisible_hand https://en.wikipedia.org/wiki/Invisible_hand
gumby 8y ago
Both MIT and the author are missing the point on tuition — disengenuously in MIT’s case. I get the same budge numbers the author does (thanks, development office!), and while tuition is 10% of revenues (down from 14% a couple of decades ago) spending on education is about 12-15%. So your education isn’t 50% subsidized. The best way to think of MIT is not as a school but as a research lab with a small school attached.
jelliclesfarm 8y ago
Does the fact that universities own insane amount of land and have all sorts of diversified investments to be funded have any bearing on this discussion? I think right after the Catholic Church, universities and colleges collectively hold the massively large tracts of land as investments/REITs and as physical asset. Some of them..like the 2 year community college in my town in Bay Area, CA...are selling it to real estate developers. Federal and bond money ...public money meant for education is going to a speculative activity like real estate I’d wager that most of American education is funded by speculation. Ivy leagues have land in South America and invests outside the country. Even public schools are funded by property taxes(at least in California..)...which to me is a speculation. Considering the insane house prices in California, our burgeoning population and prop 13. Throw in unionized teaching staff, it’s no wonder that most of the best and brightest minds come from outside the country. We attract immigrants because they really can fill a gaping vacuum in the labour and skills market. And they can work for less aka demand less because they don’t have the burden of student loans. I am not sure if any of the above is relevant but those were my first thoughts after reading the article.
- fromthestart 8y ago
  >And they can work for less aka demand less because they don’t have the burden of student loans. Depending on their country of origin, they also are comfortable with lower standards of living. Which puts negative pressure on wages.
- gnicholas 8y ago
  > Even public schools are funded by property taxes (at least in California..)...which to me is a speculation. Local K-12 education is funded by property taxes, but I don't think this applies to the CSUs and UCs. Also, I don't think it's appropriate to refer to this as speculation. Are property taxes in CA driven by high prices? Yes. Is the bottom likely to drop out? Given the "burgeoning population" that you note, probably not. Also, if property values crash, incomes and consumer spending will likely also crater as part of the same event. So if we chose to fund education through income or sales taxes, it would be similarly "speculative".
scarface74 8y ago
So if I’m a Georgia resident (which I am). Why would I pay the exorbitant tuition of MIT when I could pay 1/5 as much to go to the Georgia Tech and have basically the same average outcome? In fact, I could pay even less and do the 2+3 program and go to an even cheaper school for the first two years and stay at home? https://www.nerdwallet.com/blog/loans/student-loans/highest-salaries-engineering-computer-science/ https://www.nerdwallet.com/blog/loans/student-loans/highest-... On the other hand, I graduated from a no name state school in the mid 90s and within three years I was sitting by people who went to “prestigious” schools making just as much as they were making with no student loan debt. My entire four year tuition was less than they spent in one year.
- bluedevil2k 8y ago
  Your example is a one-person example. MIT grads on average earn $223k 10 years after graduation (1) while Georgia Tech grads earn $115k (2). (1) - https://www.paysa.com/blog/harvard-vs-mit-which-tech-grads-make-the-most/ https://www.paysa.com/blog/harvard-vs-mit-which-tech-grads-m... (2) - https://www.ajc.com/news/education/this-how-much-alumni-georgia-colleges-make-average/J3PyBV2E2S0i4I6vm9ouXP/ https://www.ajc.com/news/education/this-how-much-alumni-geor...
  - scarface74 8y ago
    My example included a citation for graduating seniors starting salaries. https://www.nerdwallet.com/blog/loans/student-loans/highest-salaries-engineering-computer-science/ https://www.nerdwallet.com/blog/loans/student-loans/highest-... Not that I’m disputing the 10 year salaries.
- mcguire 8y ago
  "Why would I pay the exorbitant tuition of MIT..." According to the article, 58% of MIT students received aid (averaging to 2/3 of tuition (?)).
  - scarface74 8y ago
    And anyone who meets the requirements to get into GT and is a resident of GA, would also meet the requirements of the GA HOPE scholarship and wouldn’t pay tuition at all.

292 points by cjmb 8y ago

cjmb 8y ago

Author here. Another long read -- apologies! The TL;DR of this essay might perhaps be: - College degrees are more valuable than ever in post-industrial economies, so applicants to top-tier schools are up 240% over the last 25 years - Meanwhile, available spots at top-tier colleges in America have increased just 2% over the last 25 years (Thanks to Tyler Cowen & others for complaining about this publicly) - Microeconomics 101: Fixed Supply + Increased Demand = Increased Price - That’s the obvious part - The non-obvious part is that this is intentional... - ...because the Charity-status ( 501(c)(3) ) of Colleges in America depends on more-than-half of their students being unable to afford the education (read: “receiving financial aid”) - That Charity-status protects the Investment Returns of College Endowments from Uncle Sam & the IRS - Investment Returns Compound over time, and there is no more powerful force on Earth — anyone not playing the game to maximize Compound-returns will lose to everyone who is - Thus: if Colleges want to keep their Investment Returns tax-free, Tuition MUST remain unaffordable for at least 50% of undergrads

kermittd 8y ago
Thanks for the quick breakdown. Reading now...college is a subject I’m endlessly fascinated by.
assblaster 8y ago
Do you see a responsibility of the federal government in lending money to students who have no ability to reasonably pay back their loans because their degrees don't have a high rate of return? Do you see a problem with universities increasing the quality of student housing, sports programs like football, and college administration, and that this desire to spend more to get more students to pay more tuition dollars is an undesirable feedback loop that perpetually increases tuition costs over time?
- Matticus_Rex 8y ago
  > Do you see a responsibility of the federal government in lending money to students who have no ability to reasonably pay back their loans because their degrees don't have a high rate of return? Can we all agree that this is an awful idea societally and for the individuals involved? If you couldn't get credit to go, it's because the market is sending a signal that it's a really bad idea to go. Yeah, it sucks if your dream is to do [insert unmarketable degree here] and there are few jobs for people who do that and the training costs just as much as an engineering degree. The idea that "society" should subsidize that is narcissistic at best.
  - prater 8y ago
    We absolutely cannot all agree on that. As you point out - the fact of the matter is that an undergraduate degree in business, engineering or medicine costs the same as a degree in art, social work or childhood education and pays about 3-4 times as much. So it's individually quite stupid to major in anything _other_ than engineering, business or premed. Do you really think a society is going to function without teachers, psychologists, lawyers and artists? So in that case can we all agree that arranging the incentives so that the only thing Universities produce are engineers, MBA's and medical professionals is an awful idea societally and for the individuals involved?
    - assblaster 8y ago
      But why does the "degree" require paying for college football or fancy dorms or student entertainment? College has lost its focus on education and, nationally, colleges are competing on providing amenities and costs of college are skyrocketing. Wouldn't it make sense to bring college education back to its original purpose?
      - CamTin 8y ago
        Which original purpose? The elite school one of allowing the next generation's ruling class to network with one another, or the land grant one of doing the same thing for flyover country, but also discovering new ways of applying fertilizer at the same time?
travisoneill1 8y ago
> the Charity-status ( 501(c)(3) ) of Colleges in America depends on more-than-half of their students being unable to afford the education This would still be true even if college cost 10x less than it does now. Very few 18-22 year old full time students can afford any level of tuition.
- bilbo0s 8y ago
  I guess it might be more precise to say that it depends on the familiies of most students being unable to afford tuition.
analog31 8y ago
A minor quibble: The ratio of admissions to applicants is kind of a funny number. Applications could be driven by an external factor such as online application systems and word processing making it easier to apply.
- hkmurakami 8y ago
  Colleges have amped up their marketing budget to increase the top of the funnel as well.
- sn41 8y ago
  Foreigner here ... can confirm this. The application process to US universities has gotten much better compared to 20 years ago. Back in the day, we needed to pay application fees+international postage. Now, the second part has gone away. The first part, surprisingly, has not gone up by much.
- extra88 8y ago
  Yes, and the improvements in financial aid at elite schools makes them as affordable as a state school so applying to them is a low cost gamble.
ropeladder 8y ago
"...because the Charity-status ( 501(c)(3) ) of Colleges in America depends on more-than-half of their students being unable to afford the education (read: “receiving financial aid”)" I wasn't aware of this at all. Do you have a source? Non-profits don't generally need to give away their money.
- cjmb 8y ago
  For sure, you’re totally right that non-profits don’t generally need to give away their money. I tried to touch on this idea in the “Case for Charity: A Charity Case” section, but my approach is to view it idealistically / as things should or might be. And in a hypothetical world where Colleges charge double-digit fractions of a family’s net worth, while generating as much investment profit as our best companies and hedge funds, but where 0% of students received any “aid”...... .....and the institution was still allowed to remain a non-profit and have returns tax-sheltered.... ....I can’t imagine that such a state of affairs would be allowed to continue. Which organizations are allowed to be considered 501(c)(3) and on what basis and what privileges that affords them is a matter that is hypothetically at the prerogative of Congress. I know trust in Congress/the political process is pretty damn low these days. But my point with the “best play it safe” comment was basically...if I were colleges, I wouldn’t roll the dice.
  - firethief 8y ago
    But no one is "colleges", if they're each acting in their own best interest. I don't see how this argument explains their behavior unless colleges are coordinating as a cartel. What's keeping them each in line?
    - mcguire 8y ago
      One of the points in the article is that this tier of colleges have been operating as a cartel since before the 1990s.
      - firethief 8y ago
skybrian 8y ago
Since you're using MIT as an example, it says here [1] that 90% of students get financial aid. I doubt that's changed much. The "sticker price" for elite colleges has always been too high for most families to afford, but most students' families don't pay that price. If you want to prove that maintaining charity status is a cause of tuition increases, you'll have to try harder. [1] https://web.mit.edu/facts/tuition.html https://web.mit.edu/facts/tuition.html
- secabeen 8y ago
  The college board publishes a nice charge of net cost of college: https://trends.collegeboard.org/college-pricing/figures-tables/average-net-price-over-time-full-time-students-public-four-year-institution https://trends.collegeboard.org/college-pricing/figures-tabl... Room and Board is a major driver of the increased cost of colleges.

dhruvp 8y ago

Wow this essay is fantastic. The idea that the amount of people who "need" financial aid has stayed constant while tuition prices have increased 170% (way outpacing wage growth) is unreal. Conrad if you wrote a book about this I would buy it. Super fascinating stuff. Colleges are clearly massive financial instruments that need to be analyzed further.

dfgert 8y ago
I doubt analyzing university would do much since its already a common knowledge at this point still nothing is happening. Government and legal institutions are ineffective in solving problem where solution results in loss in profit. Building alternatives to universities that are driven by grass-roots movements are the perfect way forward here. Home schooling, MOOCs and startup businesses are some of the developments that have started diminishing the need of expensive degrees.
- bumby 8y ago
  What I think will be interesting in the next few decades is if universities will maintain their monopoly on accreditation or if they will lose that like they did on their monopoly of education. As long as there's a need for degrees as a signal for baseline competence/barrier to entry, it seems those needing it will be at the mercy of the systems that provide it.
  - wallace_f 8y ago
    > a need for degrees as a signal for baseline competence/barrier to entry The signal is valuable. The unnatural barrier to entry is, at best, unethical. Ideally, the barrier to the opportunity to earn the credential would not exist. It should be available to everyone worldwide. Individual research positions should be applied for. Certain practical skills must be taught in labs, etc. But the vast majority of intellectual effort in a Harvard degree should already have all its coursework and testing available to everyone, and at reasonable cost. Otherwise it is not an open competition, it is an institution promoting socioeconomi status.

sn41 8y ago

Does anybody know what are the major running costs involved in a university? What I found disturbing in the (public midwestern) university where I studied are the luxurious sports complexes that kept popping up, whereas many classrooms were poorly heated and ventilated. As far as the staff is concerned, I hear that teaching and tenured positions are being reduced in favour of increasing administrative staff and corporate-style bosses. The peripheral processes seem to be eating up the core, much like one of those parasites which thrive as outer shells long after their host trees are gone.

qaq 8y ago
the ratio is shifting dramatically toward admin side
- ams6110 8y ago
  Yes. Administrative staff, and spending on dubious things such as e-textbooks, LMS systems, online learning and IT in general is out of control.
- secabeen 8y ago
  Do you have a citation for this? The data I have shows that on a real basis, expenditures at state schools for administrative services are largely flat: https://nces.ed.gov/programs/digest/d16/tables/dt16_334.10.asp https://nces.ed.gov/programs/digest/d16/tables/dt16_334.10.a...
  - qaq 8y ago
    https://www.theguardian.com/commentisfree/2017/aug/21/universities-broke-cut-pointless-admin-teaching https://www.theguardian.com/commentisfree/2017/aug/21/univer... I think looking at top level figures could be problematic because we don't really know how classification was done.
    - secabeen 8y ago
      Intetresting. That's UK, which is a totally different system, but still neat.

deleted 8y ago

[deleted]

rossdavidh 8y ago

Fascinating article. A question I ponder is: given that, as I believe is true, the student loan bubble is going to burst in a messy way sometime in the next few years, what happens to the college industry at that point? The last time it happened they made it illegal to discharge student loan debt in bankruptcy, but the rates of people unable to make payments is going up again, and at some point it will cause a financial problem, I would think. Does any of this calculus change if the student loan industry goes bust?

unimpressive 8y ago
What makes you think it's a bubble? Just because something is unpleasant, or even outright evil doesn't make it a bubble. Perhaps at some point an equilibrium is reached where these institutions extract exactly as much as the degree is worth, minus the little bit left that will incentivize people to take the deal. After all, the 'value' of these degrees has only gone up. Overproduced malthusian elitehood[0] has to be better than starving with the unnecessariat[1], maybe[2]. We are after all already at the near-apocalyptic scenario. Economically disenfranchised liberal arts graduates are roaming the earth and using the only skills they have to extract resources from the environment. In practice this amounts to a sort of Trust Me I'm Lying dystopia of manufacturing outrage with one hand and selling solutions on the other. For calibration, many students in the UK have turned to literal prostitution[3]. [0]: https://nationalpost.com/news/world/jonathan-kay-on-the-tyranny-of-twitter-how-mob-censure-is-changing-the-intellectual-landscape https://nationalpost.com/news/world/jonathan-kay-on-the-tyra... [1]: https://morecrows.wordpress.com/2016/05/10/unnecessariat/ https://morecrows.wordpress.com/2016/05/10/unnecessariat/ [2]: https://berthamasonsattic.wordpress.com/2018/10/12/i-applied-to-200-jobs-and-all-i-got-was-this-moderate-severe-depression/?src=longreads https://berthamasonsattic.wordpress.com/2018/10/12/i-applied... [3]: https://www.independent.co.uk/news/education/education-news/students-sex-work-prostitution-webcam-university-tuition-fees-education-a8614186.html https://www.independent.co.uk/news/education/education-news/...
- antt 8y ago
  Anything that grows exponentially is a bubble. The only question is when it stops growing because it has run out of space. A simple example is that if Caesar had invested one gram of gold after the conquest of Gaul at 3% compound interest today it would be worth 2.64e24 dollars. Or a trillion times larger than the world economy today.

absherwin 8y ago

The underlying assertion is that universities must provide financial assistance to the majority of their students to be considered tax exempt. No citation is provided. 26 USC 501(c)(3) explicitly lists an organization operated exclusively for educational purposes as being tax exempt. Charitable organization is listed as a separate type. Also worth considering is the example of Cooper Union: It charged no tuition and therefore offered no financial aid for most of its history. While one could argue that that is a form of aid so too would any other tuition reduction enabled by an endowment. This further suggests that universities do not set tuition in order to maintain tax exempt status.

elliekelly 8y ago
I believe the post is referring to the 501(c)3 status of the endowment, which is basically a trust fund, and is not operated exclusively for educational purposes.
- absherwin 8y ago
  Two thoughts: Funds are explicitly mentioned as acceptable entities in 501(c)(3). For what non-educational purpose are endowments used? While some uses may seem tenuously connected to a given observer, all are determined to further the university’s mission in some way.
  - elliekelly 8y ago
    > For what non-educational purpose are endowments used? Most of the money is used to make more money tax free. i.e., it's invested & managed by Wall Street. Edit to add I wasn't suggesting the type of entity mattered re: 501(c)3 status but rather was pointing out that the endowment fund is an entity separate and apart from the educational institution.
    - absherwin 8y ago
      The point you’re raising is that an endowment could simply exist to make money for its own sake. The IRS combats this by requiring a minimum distribution of 2/3 of the endowment’s minimum return (which tends to be lower than actual). See https://www.irs.gov/charities-non-profits/private-foundations/private-operating-foundation-endowment-test https://www.irs.gov/charities-non-profits/private-foundation... for details.

wallflower 8y ago

I have not yet read through all of this 2013 IRS Official ”College and Universities Compliance Project - Final Report”. However, nothing so far talks about tuition and 50% attending receiving financial aid. The 50% rule may be based more on 501c(3) spending at least 50% of their income on “their mission”. This seems to be the latest legal reference with regard to colleges and universities retaining 501c(3) status. > Of total endowment distribution, 56 percent were made for scholarships, awards, grants and/or loans in the amount of $3 million. 29 percent of total endowment distributions were made for general university operations in the amount of $3 million. Off-topic: > Half of the systems reported that at least one of its five most highly paid employees received NCAA income. https://www.irs.gov/pub/irs-tege/CUCP_FinalRpt_042513.pdf https://www.irs.gov/pub/irs-tege/CUCP_FinalRpt_042513.pdf

throwawayjava 8y ago
A crucial distinction: Of total endowment distribution is VERY different from of total spending. Tuition-dependent colleges and universities tend to look very different from their large endowment counterparts.

secabeen 8y ago

This article is interesting, but it makes the fundamental error of assuming that the primary product of an R1 research university is education for undergraduates, which it is not. The primary product of an R1 research university is research, largely performed by Graduate Students, Postdoctoral Researchers and Professional Researchers. All of these are paid a salary of some form, some market-rate, others less-so. That's where the cost is, along with actual costs of instruments, libraries, consumables and buildings necessary for cutting edge research. Most of the funding for that comes from research grants and you can see how it represents a huge fraction of the budget in his charts. Unfortunately, all of the expenditure data that the Education department puts out combines both R1 and non-R1 institutions, so it's hard to see just how different the top 120 schools are from most of the rest. If you have expenditure data segmented by research intensity, I would love to see it. The undergraduate education is part of the university, but not the primary part. (At UChicago, grad students still outnumber undergrads!) If you want to see what the finances of an institution that primarily educates undergraduates looks like, go to one of the Liberal Arts colleges, or non R-1 state schools, like any of the Cal States in California, or non-flagship schools in other states.

throwawayjava 8y ago
> go to one of the Liberal Arts colleges, or non R-1 state schools, like any of the Cal States in California, or non-flagship schools in other states. ...and look at the instructor's salaries. PhD's from top universities who could easily make 300k+ in the private sector but instead take positions that pay 60k-70k. Even with tenure, that's a labor of love. Blaming highly paid admins would be great, except that university presidents at teaching colleges are the highest paid (reminder: branch campuses and liberal arts colleges never have Div 1 sports programs) and still make $50k-100K less than a green phd out of a top 10 CS program (200k is good money for a president of a branch campus or liberal arts college -- and remember, that's typically a person with 30+ years experience and a uniquely positive track record). I worry about what will happen to the American teaching college (public or private) over the next 50 years if the current war on college -- which this article typifies -- wins out in the public mind. If you doubt a single word of this feel free to reply to this comment. I'm extremely familiar with both markets. When I say that (even tenure-track) CS teaching requires a 200k paycut, I really do know what I'm taking about.

smarttack 8y ago

I worked in the industry selling and designing software for Financial Aid offices. You are simply a SSN to them which equals $##,000 in potential revenue

DanielBMarkham 8y ago

This is a nice essay. I learned some things I didn't know before. There's a pattern here in public policy-making that needs further attention. We have slogans and phrases that become untouchable. "Clean water" is one. Who isn't for clean water? I've never met anybody who wanted water to be dirty or poisonous. In the states we've had a very powerful movement called "Mothers Against Drunk Driving". Once again, who the hell would be in favor of allowing drunks to drive? These titles are self-evidently good things. It goes on and on. I'm a fan of learning more about Universal Basic Income. We solve poverty by, well, giving people money. We do it anyway through social programs. Why not give it directly? (I don't know. Let's see what happens in various experiments) "College" is yet another one of these magic phrases. Who isn't for college? Higher education? I just read another commenter on here that said we should stop this "war on colleges" That's why I'm commenting. The pattern is this: there's a phrase or slogan that nobody in their right mind would oppose. Lots of people and emotional energy is put into making sure we have this goodness for everybody. People who provide any sort of feedback at all aside from unanimous support are shunned. And they should be! After all, they're against $GOODNESS_X Then we start spending money and making public policy around the phrase -- and the results can be quite mixed. Since the phrases themselves mean little, it's all about the tiny details, the implementation. Some groups do this thing very well. Some suck at it. Over time, however, in every one of these situations, architectural cruft accumulates and people figure out how to game the system to make it do things nobody ever intended. Well then we're kind of stuck, aren't we? You can't provide any feedback aside from full support, otherwise we'll shun you. We established that when we started this movement. Colleges not working at the things the common person thinks they're supposed to be working at? Prices way up, graduates sometimes deep in debt with useless skills, use of the collegiate corporate structure as a proxy for a modern country club? You point that out and you're one of those anti-intellectuals fomenting a war on colleges. The public discussions around dozens of policy initiatives suck. And they suck because the concepts have been so bowdlerized that we're all forced into false dichotomies. And technology, by continuing to promote the concepts that these huge, intricate, and detailed policy issues can be discussed at in terms of 140-character tweets or something similar? We've got a huge hand in making things as sucky as they have become. We're making a buck off of making people stupider than they would normally be and having them fighting over things they would normally mostly agree about. In my mind this is a terrible thing that my community is mostly responsible for.

Synaesthesia 8y ago

University as a business is not the ideal model for education. It should be publicly owned and funded and all free, like it is in Germany.

zwaps 8y ago
This is an interesting assertion, because there is certainly pro's and con's. I am working in Germany now (in a "good" university) and I often visit top tier US universities. Due having money, US universities at a similar relative rank have vastly bigger faculties, vastly better supply of researchers and usually better admin. And it is not even close. Network effects among researchers are much, much stronger. Combine this with the fact that the German system has unecessary deficiencies. The appointment system is f'ed beyond repair and it is virtually impossible to offer positions to good prospective researchers. The "Mittlebau" lacks any and all good career track and is made up of disillusioned and hopeless people on 2-year successive contracts (and nowadays, it is missing entirely). And of course, there is no real tenure track, which means a lot of Profs are really bad and would have never gotten tenure in a meriocratic process. Since we have a couple of privately funded places that do the US system here in Germany, we can see that it just simply works much better. On the other hand, in terms of long term stability and the average quality of education, I agree that the US system has issues. Relying on inflated undergrad fees, especially from international student, seems dangerous in the long term.
sudden 8y ago
It should be fully privatised, actually.

namuol 8y ago

This suggests that the "wealth gap" (Endowment gap) of colleges in the US is increasing, probably at an accelerating rate. This is probably not a good thing. I wonder how much of a difference the tax-exempt status is a factor in the growth of e.g. MIT's endowment. Was this tax-exempt status ever in jeopardy? It's unclear from the article whether this status was part of the failed anti-trust suit, but the article does seem to suggest this is the underlying problem.

lordnacho 8y ago

Why hasn't someone done this yet? - You make an organization that just examines people in various subjects. - You hire a bunch of professors in each field. - You make sure everyone thinks the exam is hard. - You make sure the exams are fair. Rent exam halls, get invigilators to pace up and down. Biometric scans. Passports. Etc. - You make the syllabus and practice exams freely available. - You make a secure website to show everyone who passed. There must be something similar, somewhere. Perhaps the Chinese civil service exams. Or the CFA exams.

lmm 8y ago
1. Suppose you're an employer. You see a candidate who did some radical education program you haven't heard of and know nothing about the details of, instead of going to university. Your natural assumption (because it's correct in 95% of similar cases) is that this is someone who wasn't good enough for university. It's the same for a professor who got involved - everyone else in the field would assume they couldn't get a university position, or really needed the money. For the people who could give credibility to such a venture, there's only downside. 2. When the exam is cheap and the only source of credit, fraud is a much bigger risk than for normal university exams. Apart from anything else, outright bribery is now a risk at every level in the process, because a good exam result is worth far more in lifetime earnings than you can afford to pay anyone involved.
- lordnacho 8y ago
  > 1. Suppose you're an employer. You see a candidate who did some radical education program you haven't heard of and know nothing about the details of, instead of going to university. Your natural assumption (because it's correct in 95% of similar cases) is that this is someone who wasn't good enough for university. But you can see the questions yourself. If you did a degree you'd know if it was the sort of level that you'd expect from a university student. If someone can answer university level questions, why do they need to go to university? As for the profs, you can hire them from the same universities. They're allowed to work on the side. > 2. When the exam is cheap and the only source of credit, fraud is a much bigger risk than for normal university exams. Apart from anything else, outright bribery is now a risk at every level in the process, because a good exam result is worth far more in lifetime earnings than you can afford to pay anyone involved. Sure, so rent a hall, make people walk through a metal detector, etc. Make sure the papers are seen by several randomized people. It's a trust building exercise, that's true. But plenty of businesses depend on trust, and it's not like nobody has managed to build trust before.

known 8y ago

Sounds like an example for https://en.wikipedia.org/wiki/Invisible_hand https://en.wikipedia.org/wiki/Invisible_hand

gumby 8y ago

Both MIT and the author are missing the point on tuition — disengenuously in MIT’s case. I get the same budge numbers the author does (thanks, development office!), and while tuition is 10% of revenues (down from 14% a couple of decades ago) spending on education is about 12-15%. So your education isn’t 50% subsidized. The best way to think of MIT is not as a school but as a research lab with a small school attached.

jelliclesfarm 8y ago

Does the fact that universities own insane amount of land and have all sorts of diversified investments to be funded have any bearing on this discussion? I think right after the Catholic Church, universities and colleges collectively hold the massively large tracts of land as investments/REITs and as physical asset. Some of them..like the 2 year community college in my town in Bay Area, CA...are selling it to real estate developers. Federal and bond money ...public money meant for education is going to a speculative activity like real estate I’d wager that most of American education is funded by speculation. Ivy leagues have land in South America and invests outside the country. Even public schools are funded by property taxes(at least in California..)...which to me is a speculation. Considering the insane house prices in California, our burgeoning population and prop 13. Throw in unionized teaching staff, it’s no wonder that most of the best and brightest minds come from outside the country. We attract immigrants because they really can fill a gaping vacuum in the labour and skills market. And they can work for less aka demand less because they don’t have the burden of student loans. I am not sure if any of the above is relevant but those were my first thoughts after reading the article.

fromthestart 8y ago
>And they can work for less aka demand less because they don’t have the burden of student loans. Depending on their country of origin, they also are comfortable with lower standards of living. Which puts negative pressure on wages.
gnicholas 8y ago
> Even public schools are funded by property taxes (at least in California..)...which to me is a speculation. Local K-12 education is funded by property taxes, but I don't think this applies to the CSUs and UCs. Also, I don't think it's appropriate to refer to this as speculation. Are property taxes in CA driven by high prices? Yes. Is the bottom likely to drop out? Given the "burgeoning population" that you note, probably not. Also, if property values crash, incomes and consumer spending will likely also crater as part of the same event. So if we chose to fund education through income or sales taxes, it would be similarly "speculative".

scarface74 8y ago

So if I’m a Georgia resident (which I am). Why would I pay the exorbitant tuition of MIT when I could pay 1/5 as much to go to the Georgia Tech and have basically the same average outcome? In fact, I could pay even less and do the 2+3 program and go to an even cheaper school for the first two years and stay at home? https://www.nerdwallet.com/blog/loans/student-loans/highest-salaries-engineering-computer-science/ https://www.nerdwallet.com/blog/loans/student-loans/highest-... On the other hand, I graduated from a no name state school in the mid 90s and within three years I was sitting by people who went to “prestigious” schools making just as much as they were making with no student loan debt. My entire four year tuition was less than they spent in one year.

bluedevil2k 8y ago
Your example is a one-person example. MIT grads on average earn $223k 10 years after graduation (1) while Georgia Tech grads earn $115k (2). (1) - https://www.paysa.com/blog/harvard-vs-mit-which-tech-grads-make-the-most/ https://www.paysa.com/blog/harvard-vs-mit-which-tech-grads-m... (2) - https://www.ajc.com/news/education/this-how-much-alumni-georgia-colleges-make-average/J3PyBV2E2S0i4I6vm9ouXP/ https://www.ajc.com/news/education/this-how-much-alumni-geor...
- scarface74 8y ago
  My example included a citation for graduating seniors starting salaries. https://www.nerdwallet.com/blog/loans/student-loans/highest-salaries-engineering-computer-science/ https://www.nerdwallet.com/blog/loans/student-loans/highest-... Not that I’m disputing the 10 year salaries.
mcguire 8y ago
"Why would I pay the exorbitant tuition of MIT..." According to the article, 58% of MIT students received aid (averaging to 2/3 of tuition (?)).
- scarface74 8y ago
  And anyone who meets the requirements to get into GT and is a resident of GA, would also meet the requirements of the GA HOPE scholarship and wouldn’t pay tuition at all.