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It's typically the opposite of what you say - the true expenses/student that a private university pays is much higher than even the richest kid pays (difference

It's typically the opposite of what you say - the true expenses/student that a private university pays is much higher than even the richest kid pays (difference made up for by the endowment's income) So the better question is why they don't raise prices such that the rich kids have to pay the true full price & have more money for aid for the less-rich.

floor2 3y ago
No that's not the better question. If private universities are truly spending so irresponsibly and profligately that their sticker price isn't covering their expenses, then their entire administration should be thrown out and replaced. It's only incompetence or corruption that could excuse such costs.
- AgentOrange1234 3y ago
  Throwing out the entire administration and then only replacing a small fraction of it would work even better!
StressedDev 3y ago
I have a hard time believing this. Every course I took in college had at least 15 people and usually 30-50 people. Large classes like Calculus 1-2, Linear Algebra, and Differential Equations had at least 300 people. There is no way you cannot pay the salary + legitimate overhead for 1 profess, and 1-10 TAs with these class sizes. My guess is a lot of the money does not go to instruction but goes to administration, sports palaces (stadiums), luxury dorms, etc. Colleges used to be MUCH cheaper in the 1950s, 1960s, and 1970s. The education was just as good but cost far less. The big problem with colleges today is they are "non-profit" in name only. Instead, of giving profits to shareholders, they are giving them to employees and insiders. This hurts students and the United States. However, colleges do not care because they, their employees, and friends benefit.
- wakawaka28 3y ago
  Sports more or less pays for itself in most cases and even brings in profits. That's why even public colleges have active sports programs. You are right about other luxury amenities. But even basic facilities cost pretty serious money, even if they are only built every 50-100 years or so. If I had to estimate, I'd say no school currently pays more than 25% of tuition on actual teaching. Administrators and luxury facilities account for most of the other spending. The real cause of these escalating costs is easy credit for tuition. There would simply be no big market for the current overpriced programs if people couldn't get loans regardless of outcomes. I would like creditors to have to prove how the students will pay for the median salary of a person with the same degree before loaning the money. You should not be able to borrow hundreds of thousands of dollars for stupid stuff that will never pay off.
  - ecshafer 3y ago
    sports only pays for itself in a minority of highly successful schools, and even then typically only Football or Basketball. So sure Penn State and Auburn football pull a profit, but the vast majority do not. Last I checked on these, the number of schools was <20 that were profitable.
    - wakawaka28 3y ago
      You're wrong about that. See this for example: https://sports.usatoday.com/ncaa/finances https://sports.usatoday.com/ncaa/finances Not only is sports usually profitable on the surface but it draws donations and new students. Administrators aren't as stupid as you think.
  - onlypassingthru 3y ago
    There is exactly 1 college sport that typically pays for itself and every other sport at the university, with the slight possibility of a second sport contributing to the coffers ONLY if the college is a D1 school and competes regularly in March Madness. For those unfamiliar with American college athletics, American Football is the money maker via shared revenue from broadcasting rights and Men's Basketball can be a net cash flow positive also via broadcasting if they're an elite team. Every other sport is a net cost for the school because nobody watches all the other sports shown on ESPN Ocho.
lukev 3y ago
Given a typical professor's salary, it is... difficult to imagine that this is true, at least not without fantastically bloated administrative and overhead costs.
- CPLX 3y ago
  > fantastically bloated administrative and overhead costs Indeed. Go check the trends on the ratio of non-teaching staff to students at these major name colleges.
  - ckrapu 3y ago
    “non-teaching staff” includes all the research scientists, postdoc, and techs that help make the research happen. These universities are not especially good at teaching compared to SLACs. They are exceptionally good at research.
    - CPLX 3y ago
      That’s not what most of these people are doing. https://www.mindingthecampus.org/2023/01/05/more-employees-than-students-at-stanford-give-each-student-a-concierge/ https://www.mindingthecampus.org/2023/01/05/more-employees-t...
    - seanmcdirmid 3y ago
      Those people are paid for out of research grants, not tuition.
gumby 3y ago
I don't know -- MIT's tuition and educational expenditures roughly match (it's a slight loss). Of course it's also a minor percentage of the budget. Tuition at my partner's New York private high school (she graduated 35 years ago) just hit $61K. OTOH my own high school (also private) spends over 70K/student and charges 20K tuition, though tuition revenue/student is under 10K. This might be an example of the subsidy.

floor2 3y ago

No that's not the better question. If private universities are truly spending so irresponsibly and profligately that their sticker price isn't covering their expenses, then their entire administration should be thrown out and replaced. It's only incompetence or corruption that could excuse such costs.

AgentOrange1234 3y ago
Throwing out the entire administration and then only replacing a small fraction of it would work even better!

StressedDev 3y ago

I have a hard time believing this. Every course I took in college had at least 15 people and usually 30-50 people. Large classes like Calculus 1-2, Linear Algebra, and Differential Equations had at least 300 people. There is no way you cannot pay the salary + legitimate overhead for 1 profess, and 1-10 TAs with these class sizes. My guess is a lot of the money does not go to instruction but goes to administration, sports palaces (stadiums), luxury dorms, etc. Colleges used to be MUCH cheaper in the 1950s, 1960s, and 1970s. The education was just as good but cost far less. The big problem with colleges today is they are "non-profit" in name only. Instead, of giving profits to shareholders, they are giving them to employees and insiders. This hurts students and the United States. However, colleges do not care because they, their employees, and friends benefit.

wakawaka28 3y ago
Sports more or less pays for itself in most cases and even brings in profits. That's why even public colleges have active sports programs. You are right about other luxury amenities. But even basic facilities cost pretty serious money, even if they are only built every 50-100 years or so. If I had to estimate, I'd say no school currently pays more than 25% of tuition on actual teaching. Administrators and luxury facilities account for most of the other spending. The real cause of these escalating costs is easy credit for tuition. There would simply be no big market for the current overpriced programs if people couldn't get loans regardless of outcomes. I would like creditors to have to prove how the students will pay for the median salary of a person with the same degree before loaning the money. You should not be able to borrow hundreds of thousands of dollars for stupid stuff that will never pay off.
- ecshafer 3y ago
  sports only pays for itself in a minority of highly successful schools, and even then typically only Football or Basketball. So sure Penn State and Auburn football pull a profit, but the vast majority do not. Last I checked on these, the number of schools was <20 that were profitable.
  - wakawaka28 3y ago
    You're wrong about that. See this for example: https://sports.usatoday.com/ncaa/finances https://sports.usatoday.com/ncaa/finances Not only is sports usually profitable on the surface but it draws donations and new students. Administrators aren't as stupid as you think.
- onlypassingthru 3y ago
  There is exactly 1 college sport that typically pays for itself and every other sport at the university, with the slight possibility of a second sport contributing to the coffers ONLY if the college is a D1 school and competes regularly in March Madness. For those unfamiliar with American college athletics, American Football is the money maker via shared revenue from broadcasting rights and Men's Basketball can be a net cash flow positive also via broadcasting if they're an elite team. Every other sport is a net cost for the school because nobody watches all the other sports shown on ESPN Ocho.

lukev 3y ago

Given a typical professor's salary, it is... difficult to imagine that this is true, at least not without fantastically bloated administrative and overhead costs.

CPLX 3y ago
> fantastically bloated administrative and overhead costs Indeed. Go check the trends on the ratio of non-teaching staff to students at these major name colleges.
- ckrapu 3y ago
  “non-teaching staff” includes all the research scientists, postdoc, and techs that help make the research happen. These universities are not especially good at teaching compared to SLACs. They are exceptionally good at research.
  - CPLX 3y ago
    That’s not what most of these people are doing. https://www.mindingthecampus.org/2023/01/05/more-employees-than-students-at-stanford-give-each-student-a-concierge/ https://www.mindingthecampus.org/2023/01/05/more-employees-t...
  - seanmcdirmid 3y ago
    Those people are paid for out of research grants, not tuition.

gumby 3y ago

I don't know -- MIT's tuition and educational expenditures roughly match (it's a slight loss). Of course it's also a minor percentage of the budget. Tuition at my partner's New York private high school (she graduated 35 years ago) just hit $61K. OTOH my own high school (also private) spends over 70K/student and charges 20K tuition, though tuition revenue/student is under 10K. This might be an example of the subsidy.