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A very confusing aspect of the US college system is that very few students pay the full sticker price. At Harvard, that 'very few' is 45%. From the article:

A very confusing aspect of the US college system is that very few students pay the full sticker price. At Harvard, that 'very few' is 45%. From the article: About 55% of Harvard undergraduates receive some type of financial aid, according to the university. You say: but it allows universities to admit a much wider range of students than they normally would. The high sticker prices combined with variable discounts aren't there to change the pool of students. Their purpose is to ensure that each student (or their family) pays close to the maximum they'd be willing to pay. Do you like it when you visit a SaaS product's pricing page and it says 'call for pricing'? Well, how about if it was totally normal that, before a SaaS provider was willing to quote you a price, you had to provide them with a list of your assets and a copy of your most recent tax return?

sarchertech 2y ago
If they were maximizing for revenue, they’d just only admit people who could afford it. They could easily fill all of their slots with people who can afford to pay the full tuition.
- rahimnathwani 2y ago
  I didn't say they're trying to maximize total revenue. I said they're trying to maximize revenue from each student. Those two are not the same. They're not stupid. They're not going to destroy the university's reputation by admitting only people who can pay a lot. That would work for a couple of years, but eventually it would be known a party school.
  - sarchertech 2y ago
    They clearly also aren’t maximizing revenue from each student because it maxes out at only $60k a year. There are many students at Harvard whose families would pay more than that. On the lower end there’s no way that 25% of the students are willing to pay nothing at all. If they really wanted to maximize what each student pays they wouldn’t publicly disclose the formula. They’d let you in, look at your financials, and then give you an individualized quote that takes “you’re unique circumstances into account.” (They do that to some extent by offering additional scholarships to some people, but they wouldn’t give you a formula that defines the ceiling.)
    - rahimnathwani 2y ago
      because it maxes out at only $60k a year If they were to set the sticker price much higher than that, it would be cheaper to hire a full time tutor for 32 weeks per year. With the price that high, it would be difficult to maintain the charade that 'tuition' fees are primarily set to fund tuition. They’d let you in, look at your financials But they do look at your financials. You don't just say 'hey this is what I have, trust me bro'.
      - sarchertech 2y ago
        Harvard isn’t even in the top 10 most expensive colleges. They could easily add a $90k tier and no one would bat an eyelash. >they do look at financials Of course they do. Did you ignore the rest of what I wrote? The point was that they wouldn’t give you a price ceiling. Did those revenue maximizing enterprise software companies put “call for a quote, but it’s not gonna be more than $150 a seat”?
        rahimnathwani 2y ago
        They could easily add a $90k tier and no one would bat an eyelash. This is a reasonable point. I'm sure they can't deviate too much from other Ivy Plus fees, as it would show they're just being greedy. But this doesn't explain why they don't just nudge up even more over time. Maybe they can't charge $90k this year, but they could add $10k per year for the foreseeable future, as long as other Ivy Plus colleges do the same thing. This is sort of what has happened, but it appears there's some limit. My point is that, at some level, it becomes obviously a scam. If you charge someone $60k for a year's tuition, you can sort of justify it. But at $90k, it would be the same price as hiring a full time (40 hour per week) tutor at $70/hour for 32 weeks. At some point what you're doing becomes totally transparent even to those who would like to believe you. The point was that they wouldn’t give you a price ceiling. Two thoughts about that: 1. If you're rich and your kid doesn't quite meet the bar, you can get in to a top university through donations. I'm not talking about bribing an athletics coach, but donating to the university itself. 2. If there were no sticker price at all, again it would seem very shady. It's hard to explain when you're a university with a huge endowment that gets tax breaks and federal funding, why you can't publish the maximum tuition price. How do you think they set the sticker price? Do you think they aim to make a certain modest margin on the undergraduate class as a whole? Do you think the total amount they receive in undergraduate fees is a reasonable markup (say, 30%) on the reasonable cost of the services they provide?

sarchertech 2y ago

If they were maximizing for revenue, they’d just only admit people who could afford it. They could easily fill all of their slots with people who can afford to pay the full tuition.

rahimnathwani 2y ago
I didn't say they're trying to maximize total revenue. I said they're trying to maximize revenue from each student. Those two are not the same. They're not stupid. They're not going to destroy the university's reputation by admitting only people who can pay a lot. That would work for a couple of years, but eventually it would be known a party school.
- sarchertech 2y ago
  They clearly also aren’t maximizing revenue from each student because it maxes out at only $60k a year. There are many students at Harvard whose families would pay more than that. On the lower end there’s no way that 25% of the students are willing to pay nothing at all. If they really wanted to maximize what each student pays they wouldn’t publicly disclose the formula. They’d let you in, look at your financials, and then give you an individualized quote that takes “you’re unique circumstances into account.” (They do that to some extent by offering additional scholarships to some people, but they wouldn’t give you a formula that defines the ceiling.)
  - rahimnathwani 2y ago
    because it maxes out at only $60k a year If they were to set the sticker price much higher than that, it would be cheaper to hire a full time tutor for 32 weeks per year. With the price that high, it would be difficult to maintain the charade that 'tuition' fees are primarily set to fund tuition. They’d let you in, look at your financials But they do look at your financials. You don't just say 'hey this is what I have, trust me bro'.
    - sarchertech 2y ago
      Harvard isn’t even in the top 10 most expensive colleges. They could easily add a $90k tier and no one would bat an eyelash. >they do look at financials Of course they do. Did you ignore the rest of what I wrote? The point was that they wouldn’t give you a price ceiling. Did those revenue maximizing enterprise software companies put “call for a quote, but it’s not gonna be more than $150 a seat”?
      - rahimnathwani 2y ago
        They could easily add a $90k tier and no one would bat an eyelash. This is a reasonable point. I'm sure they can't deviate too much from other Ivy Plus fees, as it would show they're just being greedy. But this doesn't explain why they don't just nudge up even more over time. Maybe they can't charge $90k this year, but they could add $10k per year for the foreseeable future, as long as other Ivy Plus colleges do the same thing. This is sort of what has happened, but it appears there's some limit. My point is that, at some level, it becomes obviously a scam. If you charge someone $60k for a year's tuition, you can sort of justify it. But at $90k, it would be the same price as hiring a full time (40 hour per week) tutor at $70/hour for 32 weeks. At some point what you're doing becomes totally transparent even to those who would like to believe you. The point was that they wouldn’t give you a price ceiling. Two thoughts about that: 1. If you're rich and your kid doesn't quite meet the bar, you can get in to a top university through donations. I'm not talking about bribing an athletics coach, but donating to the university itself. 2. If there were no sticker price at all, again it would seem very shady. It's hard to explain when you're a university with a huge endowment that gets tax breaks and federal funding, why you can't publish the maximum tuition price. How do you think they set the sticker price? Do you think they aim to make a certain modest margin on the undergraduate class as a whole? Do you think the total amount they receive in undergraduate fees is a reasonable markup (say, 30%) on the reasonable cost of the services they provide?