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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 st

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
        >How do you think they set the sticker price? I think that like any organization, there are different people with different goals. I think some are true believers and are trying to minimize cost while others are interested in building their personal power base by raising tuition to pay for pet projects. On the whole though I think Harvard has a budget, and they set the sticker price so that when you combine tuition, disbursements from their endowment, and federal grants, they meet the requirements of their budget. >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? Yeah because the services the provide are insanely expensive. Harvard's operating expenses are more than they get in tuition revenue, so if you look at it from a markup perspective, it's a negative margin. You can argue that the services they provide aren't worth it, but clearly the people who go there believe they are.
  - NoahZuniga 2y ago
    > it would be cheaper to hire a full time tutor for 32 weeks per year. A large part of the value of top universities is that they have top professors. You wouldn't be able to match the quality of all the different professors a student interacts with for $60k per year with a private tutor.
    - rahimnathwani 2y ago
      How much interaction do undergraduates have with those 'top professors'?
      - sarchertech 2y ago
        Depends on the undergrad. I had a ton of interactions with top professors in undergrad because I sought it out. Also the primary benefit of Harvard vs a state school is the network effects and the credentialing of having a degree from Harvard.
        rahimnathwani 2y ago
        Depends on the undergrad. I had a ton of interactions with top professors in undergrad because I sought it out. Yes, because you sought it out. But consider your classmates. What's the median amount of time they spent 1:1 or in a small group (4:1 or smaller) with a 'top professor'? I would be surprised if it were more than 1 hour per week. Also the primary benefit of Harvard vs a state school is the network effects and the credentialing of having a degree from Harvard You've got to the core of it. The network effects and the credential are things Harvard can bestow solely because it's Harvard. The tuition fees students pay don't create the network effects. They don't create the value of the credential. These are almost solely due to the flywheel effect from the selective admissions process. Smart people want to go to Harvard because other smart people want to go to Harvard.

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
      >How do you think they set the sticker price? I think that like any organization, there are different people with different goals. I think some are true believers and are trying to minimize cost while others are interested in building their personal power base by raising tuition to pay for pet projects. On the whole though I think Harvard has a budget, and they set the sticker price so that when you combine tuition, disbursements from their endowment, and federal grants, they meet the requirements of their budget. >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? Yeah because the services the provide are insanely expensive. Harvard's operating expenses are more than they get in tuition revenue, so if you look at it from a markup perspective, it's a negative margin. You can argue that the services they provide aren't worth it, but clearly the people who go there believe they are.
- NoahZuniga 2y ago
  > it would be cheaper to hire a full time tutor for 32 weeks per year. A large part of the value of top universities is that they have top professors. You wouldn't be able to match the quality of all the different professors a student interacts with for $60k per year with a private tutor.
  - rahimnathwani 2y ago
    How much interaction do undergraduates have with those 'top professors'?
    - sarchertech 2y ago
      Depends on the undergrad. I had a ton of interactions with top professors in undergrad because I sought it out. Also the primary benefit of Harvard vs a state school is the network effects and the credentialing of having a degree from Harvard.
      - rahimnathwani 2y ago
        Depends on the undergrad. I had a ton of interactions with top professors in undergrad because I sought it out. Yes, because you sought it out. But consider your classmates. What's the median amount of time they spent 1:1 or in a small group (4:1 or smaller) with a 'top professor'? I would be surprised if it were more than 1 hour per week. Also the primary benefit of Harvard vs a state school is the network effects and the credentialing of having a degree from Harvard You've got to the core of it. The network effects and the credential are things Harvard can bestow solely because it's Harvard. The tuition fees students pay don't create the network effects. They don't create the value of the credential. These are almost solely due to the flywheel effect from the selective admissions process. Smart people want to go to Harvard because other smart people want to go to Harvard.