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This is a great question. - Why would college tuition decrease? 1) College tuition would decrease if it led to increased profit for the college. This could ha

This is a great question. - Why would college tuition decrease? 1) College tuition would decrease if it led to increased profit for the college. This could happen for many reasons including the case that they can't find enough students willing to pay. - What's actually stopping the elite schools from doubling their tuition in a single year? 2) Mostly the fear that it would reduce profits - for example through bad publicity, increased regulation, or an inability to find students willing to pay -What forces would actually cause colleges to lower their tuition? 3) market forces - on the demand side a decrease in students willing to pay, or maybe on the supply side an increase in competition for students. Or maybe government/regulatory interventions. Or possibly even a reduction in the costs of providing education.

dan-robertson 3y ago
What does it mean for a school like Harvard to make a profit? Why do they want to do that?
- StressedDev 3y ago
  They won't call it a profit. What they will do is spend as much as they can on salaries (especially for the senior employees), increasing the size of the administration (more jobs for insiders), buildings, sports, etc. Basically, people think non-profit means the organization works for the public or puts the public first. Unfortunately, what it often means is money goes to employees and insiders instead of shareholders. For colleges, it means the students (and the Federal Government which issued the student loads) comes last and the college's employees come first. Not great public policy.
  - kristopolous 3y ago
    This is why running things that aren't a business "like a business" is profoundly dangerous and destructive and anybody advocating it should be dismissed as ideologically driven.
    - chii 3y ago
      but on the other hand, these private colleges do not ever claim to be run for the public (tho they are a non-profit, which carries with it the connotation of being run for the public good despite there not being any laws requiring it). If college is expensive, students should choose not to go, or find a cheaper one. Choosing an expensive college, whether the outcomes are good for said student or not, is the choice of said student and therefore, subject to their rational utilitarian calculations. Choosing badly is always possible, just like any other life decisions.
      - kristopolous 3y ago
        That's individual consumer based which is still part of the problem. We need to collectively choose to structure education for the benefit of society because we want people to be educated. It's not about consumer choices or utility functions. That type of thinking has zero place here.
        chii 3y ago
        > We need to collectively choose to structure education for the benefit of society because we want people to be educated. so it is done already with k-12 education. Not everybody agrees that tertiary education should be paid for by the state, but do agree that the state should help subsidize a bit. This is the education loan system that is the collective decision.
        kristopolous 3y ago
        And that 56 year old decision by Governer Reagan should be revisited.* A majority of people get a college degree these days. It isn't some effete luxury of the literati in country club colleges. If someone is willing to do the hard work of educating themselves we should support it without burdening them with a lifetime of debt. You want a doctorate and are willing to put in the years of effort? Good, we need more. It should be free. It's not like information is a scarce resource these days. Spending years of your life to defend a dissertation is a big enough sacrifice. * see https://theintercept.com/2022/08/25/student-loans-debt-reagan/ https://theintercept.com/2022/08/25/student-loans-debt-reaga... or https://www.washingtonpost.com/made-by-history/2022/12/29/history-student-loan-debt/ https://www.washingtonpost.com/made-by-history/2022/12/29/hi... . The same people who whine about h1-b workers also don't want to fund education to get more domestic ones. We need to stop pretending people with such incoherent policies deserve a seat at the table.
  - dan-robertson 3y ago
    I can see the logic of administrators wanting to spend money on their own remuneration, but why should they care about building new buildings?
    - anon291 3y ago
      Well typically employees at a college typically treat the facilities like their private country club. Instead of getting the family membership at the bouldering gym, just build a bouldering wall and now you can go anytime.
    - fancyfredbot 3y ago
      This could just be a case of the profit motive aligning with the good for society as a whole. New buildings can house new students and academics which is good and also helps bring in more money in future. New buildings also preserve the status of the university as a top institution - there is some level of competition for students and talented academics and if Harvard fell behind other universities it would be harder to bring in grants. Of course this is a good thing for the university but it's also good for any administrator who wants to preserve their pay.
- fancyfredbot 3y ago
  Not sure this answers your question but Harvard does make a profit (technically an operating surplus as they are not a for profit) which they then reinvest. Although technically it might not seem like a profit motive I can see how a lot of this money might find it's way into the pockets of the administration of the university (although I'm no expert on this - presenting this as a personal view, not a fact) Https://finance.harvard.edu/financial-overview "The University ended fiscal year 2023 with an operating surplus of $186 million compared to $406 million in fiscal year 2022, on an operating revenue base that increased 5% or $262 million, to $6.1 billion. The reduced surplus was not unexpected and was driven primarily by expenses associated with renewed return to campus activity and strategic investments in our workforce, with increased compensation for faculty and staff, a decrease in vacancy rates, and overall growth in new workers across campus."
  - dan-robertson 3y ago
    Sure, but that money isn’t going to shareholders is it? Why would the school’s management want to make that number bigger?
    - readyman 3y ago
      The same reasons as any other business enterprise under capitalism.
      - School-Cotton 3y ago
        But that’s the point: Harvard literally isn’t a “business enterprise under capitalism”. It’s a non-profit organization with no shareholders. Nobody has equity in Harvard.
        readyman 3y ago
        >Harvard literally isn't a “business enterprise under capitalism” It literally is. "Non-profit" is a particular way of doing accounting, categorizing funds, filing taxes, but the incentives and interests are no different.
- hilux 3y ago
  In big organizations (of any type, including companies, universities, hospitals, military), people's sense of importance is determined primarily by the number of people they manage, and/or the size of their budget. People want to be more important.

dan-robertson 3y ago

What does it mean for a school like Harvard to make a profit? Why do they want to do that?

StressedDev 3y ago
They won't call it a profit. What they will do is spend as much as they can on salaries (especially for the senior employees), increasing the size of the administration (more jobs for insiders), buildings, sports, etc. Basically, people think non-profit means the organization works for the public or puts the public first. Unfortunately, what it often means is money goes to employees and insiders instead of shareholders. For colleges, it means the students (and the Federal Government which issued the student loads) comes last and the college's employees come first. Not great public policy.
- kristopolous 3y ago
  This is why running things that aren't a business "like a business" is profoundly dangerous and destructive and anybody advocating it should be dismissed as ideologically driven.
  - chii 3y ago
    but on the other hand, these private colleges do not ever claim to be run for the public (tho they are a non-profit, which carries with it the connotation of being run for the public good despite there not being any laws requiring it). If college is expensive, students should choose not to go, or find a cheaper one. Choosing an expensive college, whether the outcomes are good for said student or not, is the choice of said student and therefore, subject to their rational utilitarian calculations. Choosing badly is always possible, just like any other life decisions.
    - kristopolous 3y ago
      That's individual consumer based which is still part of the problem. We need to collectively choose to structure education for the benefit of society because we want people to be educated. It's not about consumer choices or utility functions. That type of thinking has zero place here.
      - chii 3y ago
        > We need to collectively choose to structure education for the benefit of society because we want people to be educated. so it is done already with k-12 education. Not everybody agrees that tertiary education should be paid for by the state, but do agree that the state should help subsidize a bit. This is the education loan system that is the collective decision.
        kristopolous 3y ago
        And that 56 year old decision by Governer Reagan should be revisited.* A majority of people get a college degree these days. It isn't some effete luxury of the literati in country club colleges. If someone is willing to do the hard work of educating themselves we should support it without burdening them with a lifetime of debt. You want a doctorate and are willing to put in the years of effort? Good, we need more. It should be free. It's not like information is a scarce resource these days. Spending years of your life to defend a dissertation is a big enough sacrifice. * see https://theintercept.com/2022/08/25/student-loans-debt-reagan/ https://theintercept.com/2022/08/25/student-loans-debt-reaga... or https://www.washingtonpost.com/made-by-history/2022/12/29/history-student-loan-debt/ https://www.washingtonpost.com/made-by-history/2022/12/29/hi... . The same people who whine about h1-b workers also don't want to fund education to get more domestic ones. We need to stop pretending people with such incoherent policies deserve a seat at the table.
- dan-robertson 3y ago
  I can see the logic of administrators wanting to spend money on their own remuneration, but why should they care about building new buildings?
  - anon291 3y ago
    Well typically employees at a college typically treat the facilities like their private country club. Instead of getting the family membership at the bouldering gym, just build a bouldering wall and now you can go anytime.
  - fancyfredbot 3y ago
    This could just be a case of the profit motive aligning with the good for society as a whole. New buildings can house new students and academics which is good and also helps bring in more money in future. New buildings also preserve the status of the university as a top institution - there is some level of competition for students and talented academics and if Harvard fell behind other universities it would be harder to bring in grants. Of course this is a good thing for the university but it's also good for any administrator who wants to preserve their pay.
fancyfredbot 3y ago
Not sure this answers your question but Harvard does make a profit (technically an operating surplus as they are not a for profit) which they then reinvest. Although technically it might not seem like a profit motive I can see how a lot of this money might find it's way into the pockets of the administration of the university (although I'm no expert on this - presenting this as a personal view, not a fact) Https://finance.harvard.edu/financial-overview "The University ended fiscal year 2023 with an operating surplus of $186 million compared to $406 million in fiscal year 2022, on an operating revenue base that increased 5% or $262 million, to $6.1 billion. The reduced surplus was not unexpected and was driven primarily by expenses associated with renewed return to campus activity and strategic investments in our workforce, with increased compensation for faculty and staff, a decrease in vacancy rates, and overall growth in new workers across campus."
- dan-robertson 3y ago
  Sure, but that money isn’t going to shareholders is it? Why would the school’s management want to make that number bigger?
  - readyman 3y ago
    The same reasons as any other business enterprise under capitalism.
    - School-Cotton 3y ago
      But that’s the point: Harvard literally isn’t a “business enterprise under capitalism”. It’s a non-profit organization with no shareholders. Nobody has equity in Harvard.
      - readyman 3y ago
        >Harvard literally isn't a “business enterprise under capitalism” It literally is. "Non-profit" is a particular way of doing accounting, categorizing funds, filing taxes, but the incentives and interests are no different.
hilux 3y ago
In big organizations (of any type, including companies, universities, hospitals, military), people's sense of importance is determined primarily by the number of people they manage, and/or the size of their budget. People want to be more important.