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It subsidizes everyone else's tuition, and is a critical piece of the value proposition for privates schools: access. By subsidizing the the poor-but-outstandin

It subsidizes everyone else's tuition, and is a critical piece of the value proposition for privates schools: access. By subsidizing the the poor-but-outstanding with money from the still-accepted rich-but-dumb, they maintain the opportunity for those two groups to intermingle, granting access to networks that that poorer students would be able to break into otherwise, which the rich also benefit from in the form of having known-competent individuals in their network. That's the primary reason to go to private school. That's what justifies the 2-4x price gap with public universities. All the niceties (not having to enter into a bi-yearly battle royal for seats in limited space classes, not having to put up with overly impacted class sizes, other little luxuries) are just there to maintain the appearance of prestige. The actual value comes from the admissions department.

robocat 4y ago
> It subsidizes everyone else's tuition I think that is a myth, unless the student is paying more than say $100k per year. Elsewhere I read that average fees were about $50k, but I presume there is quite some variation. Total operating expenses = $5.4 billion[1] Operating Revenue: Endowment income 36%, Education/Tuition 21%, Research 17%, Gifts 9%, Other 17%[1] The 21% Education/Tuition income is split: Degree Seeking Education 13%, and Continuing and Executive Education: 7%[3] Student income 1.2 billion[3] There are 30,391 students including 8,527 undergraduate and 21,864 graduate students at Harvard University for academic year 2020-2021. By attending status, there are 19,030 full-time and 11,361 part-time students[2] Assuming teaching the students costs 2.5 billion (rest is research costs) and 25000 full-time-equivalent students, then if each rich student pays enough to fully subsidise a second poor student, the rich student would need to pay $200k, and you trend towards a larger percentage of the students being rich. Argued from a different perspective (with a similar outcome): https://news.ycombinator.com/item?id=33838201 https://news.ycombinator.com/item?id=33838201 [1] https://finance.harvard.edu/financial-overview https://finance.harvard.edu/financial-overview [2] https://www.univstats.com/colleges/harvard-university/student-population/ https://www.univstats.com/colleges/harvard-university/studen... [3] https://finance.harvard.edu/files/fad/files/fy22_harvard_financial_report.pdf https://finance.harvard.edu/files/fad/files/fy22_harvard_fin...
- OkayPhysicist 4y ago
  Sure, but not all of the subsidized students are paying nothing. Plenty just get enough aid that it works out to being about even with going to a public university, but with the added benefit of a larger percentage of the students being rich (and generally getting a better educational experience). The fact that having those rich kids at the school is actually the primary value proposition for expensive private schools shifts the priorities substantially compared to a "the rich kids aren't paying enough to offset all the other students" rote accounting.
  - robocat 4y ago
    I have reread your comment multiple times, and I am struggling to understand the purpose of both your comments, and the meaning of your recent reply eludes me. Are you are responding at all to the idea that “wealthier full-fee students are not subsidising other students at all”? The closest I can paraphrase your point-of-view would be “rich students are great”, or potentially that poor students gain by associating with rich students?
    - OkayPhysicist 4y ago
      Sorry, I made 2 separate points and didn't delineate them clearly. 1) The view that the value given by over charging the rich students should be based on the number of students' tuition they eliminate is not fairly representing the situation, and understates the impact of having, say, a quarter of the student body paying significantly more than the "true" price. If the school spends say 20k/student, they charge some students 60k and others 10k, then each rich student has subsidized 4 poorer students. If a parent donates a large sum to get their kid into the school, that number is likely much greater. 2) Expensive schools using their high tuition offset by discretionarily providing merit (or need chosen by merit) based aide as a filter to distill the student body to only the high-performing, rich, or both is the main value proposition of expensive schools. Every pairing both within and between those two groups are valuable to the students, relative to say an acquaintance with an economically disadvantaged mediocre student. It subtly turns the universal experience of making new friends at university into a massive opportunity for networking, which many students don't even realize while they're engaging in it. It's not egalitarian, but it is extremely valuable to its beneficiaries.
vineyardmike 4y ago
> they maintain the opportunity for those two groups to intermingle, granting access to networks that that poorer students would be able to break into otherwise, which the rich also benefit from in the form of having known-competent individuals in their network. I went to a private school and I saw a lot of friend groups and social structures that find ways to limit those networks to “rich and competent” instead of “just competent”. Eg Fraternal organizations (bonus: also gender limited) like fraternities, finals clubs, or supper clubs with massive fees and tight cultures are one big common example. I was (embarrassingly) in such a club and there was definitely a riff between incomes (“wanna fly to New Orleans for Mardi Gras this week, we’ll only miss a few days of class?”) Obviously spring break trips or not having to work a campus job. Eg Yacht week. Also: expensive clubs with extra dues, equipment A big thing that I didn’t expect, but is something that IMO schools don’t do a good job to address is that many lower-income students just don’t understand that sort of academic world because no one taught them. Eg I met a freshman student who thought professors wanted him to fail and that there was an adversarial relationship. Furthermore, he thought office hours are when the professors shouldn’t be disturbed. Once someone just explained that professors want you to succeed and hold office hours to help you succeed, he became more successful, less stressed, and spent less time studying alone. My parents taught me all this, and my high school held office hours… but many students never learn how this world works!

robocat 4y ago

> It subsidizes everyone else's tuition I think that is a myth, unless the student is paying more than say $100k per year. Elsewhere I read that average fees were about $50k, but I presume there is quite some variation. Total operating expenses = $5.4 billion[1] Operating Revenue: Endowment income 36%, Education/Tuition 21%, Research 17%, Gifts 9%, Other 17%[1] The 21% Education/Tuition income is split: Degree Seeking Education 13%, and Continuing and Executive Education: 7%[3] Student income 1.2 billion[3] There are 30,391 students including 8,527 undergraduate and 21,864 graduate students at Harvard University for academic year 2020-2021. By attending status, there are 19,030 full-time and 11,361 part-time students[2] Assuming teaching the students costs 2.5 billion (rest is research costs) and 25000 full-time-equivalent students, then if each rich student pays enough to fully subsidise a second poor student, the rich student would need to pay $200k, and you trend towards a larger percentage of the students being rich. Argued from a different perspective (with a similar outcome): https://news.ycombinator.com/item?id=33838201 https://news.ycombinator.com/item?id=33838201 [1] https://finance.harvard.edu/financial-overview https://finance.harvard.edu/financial-overview [2] https://www.univstats.com/colleges/harvard-university/student-population/ https://www.univstats.com/colleges/harvard-university/studen... [3] https://finance.harvard.edu/files/fad/files/fy22_harvard_financial_report.pdf https://finance.harvard.edu/files/fad/files/fy22_harvard_fin...

OkayPhysicist 4y ago
Sure, but not all of the subsidized students are paying nothing. Plenty just get enough aid that it works out to being about even with going to a public university, but with the added benefit of a larger percentage of the students being rich (and generally getting a better educational experience). The fact that having those rich kids at the school is actually the primary value proposition for expensive private schools shifts the priorities substantially compared to a "the rich kids aren't paying enough to offset all the other students" rote accounting.
- robocat 4y ago
  I have reread your comment multiple times, and I am struggling to understand the purpose of both your comments, and the meaning of your recent reply eludes me. Are you are responding at all to the idea that “wealthier full-fee students are not subsidising other students at all”? The closest I can paraphrase your point-of-view would be “rich students are great”, or potentially that poor students gain by associating with rich students?
  - OkayPhysicist 4y ago
    Sorry, I made 2 separate points and didn't delineate them clearly. 1) The view that the value given by over charging the rich students should be based on the number of students' tuition they eliminate is not fairly representing the situation, and understates the impact of having, say, a quarter of the student body paying significantly more than the "true" price. If the school spends say 20k/student, they charge some students 60k and others 10k, then each rich student has subsidized 4 poorer students. If a parent donates a large sum to get their kid into the school, that number is likely much greater. 2) Expensive schools using their high tuition offset by discretionarily providing merit (or need chosen by merit) based aide as a filter to distill the student body to only the high-performing, rich, or both is the main value proposition of expensive schools. Every pairing both within and between those two groups are valuable to the students, relative to say an acquaintance with an economically disadvantaged mediocre student. It subtly turns the universal experience of making new friends at university into a massive opportunity for networking, which many students don't even realize while they're engaging in it. It's not egalitarian, but it is extremely valuable to its beneficiaries.

vineyardmike 4y ago

> they maintain the opportunity for those two groups to intermingle, granting access to networks that that poorer students would be able to break into otherwise, which the rich also benefit from in the form of having known-competent individuals in their network. I went to a private school and I saw a lot of friend groups and social structures that find ways to limit those networks to “rich and competent” instead of “just competent”. Eg Fraternal organizations (bonus: also gender limited) like fraternities, finals clubs, or supper clubs with massive fees and tight cultures are one big common example. I was (embarrassingly) in such a club and there was definitely a riff between incomes (“wanna fly to New Orleans for Mardi Gras this week, we’ll only miss a few days of class?”) Obviously spring break trips or not having to work a campus job. Eg Yacht week. Also: expensive clubs with extra dues, equipment A big thing that I didn’t expect, but is something that IMO schools don’t do a good job to address is that many lower-income students just don’t understand that sort of academic world because no one taught them. Eg I met a freshman student who thought professors wanted him to fail and that there was an adversarial relationship. Furthermore, he thought office hours are when the professors shouldn’t be disturbed. Once someone just explained that professors want you to succeed and hold office hours to help you succeed, he became more successful, less stressed, and spent less time studying alone. My parents taught me all this, and my high school held office hours… but many students never learn how this world works!