A silly correlation... Harvard tuition and applicants!

Parents Forum
1

<p>I know it means absolutely nothing, but I find it mildly amusing that the tuition costs show a strong correlation to the number of applicants, albeit trailing by a few years. I did not plug all the numbers, but I am sure that the rest follows suit. That should support the theory of exclusivity equals higher prices. Obviously, the fact that Harvard is at the bottom of the price scale among the Ivies deflates the theory. </p>

<p>Year Tuition</p>

<p>1984 $8,752
1985 $9,500
1986 10,266
1987 11,040
1988 11,645
1989 12,310
1990 13,085
1991 13,960 => 13,029 applicants
1992 14,860
1993 15,870
1994 16,856
1995 17,851 => 18,190 applicants
1996 18,838
1997 19,770
1998 20,600
1999 21,342
2000 22,054
2001 22,694 => 19,605 applicants
2002 23,457 => 20,987 applicants<br>
2003 24,630
2004 26,066 => 22,717 applicants </p>

<p>The only number that grows faster at Harvard is the endowment's growth!</p>

2

<p>Not at all a silly correlation. Veblen's theory would hold that the more "exclusive" an item is (whether made exclusive by price or by availability/accessibility), the more desirable it becomes, provided that "style leaders" continue to hold it in high regard. </p>

<p>Now it has been suggested on this board that the cost per student of providing an undergraduate education at Yale (I don't know about Harvard) is already much lower than it is at, say, Williams, and that tuition is already close to being as high as cost per student. I have no idea whether that is true. Nonetheless, I think we'll see tuition continue to rise much faster than inflation until such a time as total tuition intake outstrips cost of providing the education, plus all financial aid. And applications will rise equally quickly.</p>

3

<p>I think that is called collinearity.</p>

4

<p>What I find even more insidious is the college tuition pricing scheme. Colleges set an outrageously high price, knowing they can get it from the rich and discount it as necessary for the middle class. That let's them extract nearly every possible penny from rich and not-so-rich alike. You even have to bare your financial sole so that they know just how much to make it hurt. In nearly every other industry you would go to jail for even attempting to price a product that way - but for colleges it's institutionalized. </p>

<p>The irony is that it's the "customers" or students who are the #1 factor in making the college experience. If all the top calibre students who go to HYPS suddenly decided to save their tuition and go to Podunk U. it would still be a great experience for them. Similarly, a Harvard with marginal students would turn into a marginal experience. I don't mean to knock the profs or the facilities but in my experience, I've had some great teachers at no-name schools and some duds at a prestige school. The only overwhelming difference has been the intellectual drive of the students.</p>

5

<p>"What I find even more insidious is the college tuition pricing scheme. Colleges set an outrageously high price, knowing they can get it from the rich and discount it as necessary for the middle class. That let's them extract nearly every possible penny from rich and not-so-rich alike."</p>

<p>Actually, while I agree it is insidious, what you say isn't entirely correct. At my alma mater, every full-price paying "customer" gets a $23k subsidy each year, or a total of $92k over four years. Doesn't matter if they are the Prince of Bhutan, of the heir to Getty Oil, they get $92k. Subsidies for poorer folks rise from there. </p>

<p>They DON'T extract nearly every possible penny from the rich and almost-rich. In fact, that is precisely why college costs are allowed to rise, and able to, without too much difficulty in attracting applicants. As Xiggi's numbers show, there is colinearity. As tuition rises, so does the number of applicants.</p>

6

<p>Mini: Veblen's theory certainly works for diamonds. In support of Xiggi's they Rice 05 kids will pay a whopping 15% more than 04.</p>

7

<p>You can wear your kid's college admission around your neck for more than a decade! </p>

<p>"If all the top calibre students who go to HYPS suddenly decided to save their tuition and go to Podunk U. it would still be a great experience for them."</p>

<p>Well, not quite Podunk, but it is happening now. As HYPS reject entire classes of students year after year who, the schoolas say, are absolutely as qualified and as good as the classes they are admitting, these students are going elsewhere. The result is that the gap between those diamond schools and the rest has narrowed, and narrowed rapidly. The percentage of Yale grads going to med school has dropped by 2/3rds in the last 25 years (and law school close to the same), not because their grads are any less qualified (if anything, the opposite might be the case), but because 1) med and law school has become relatively less desirable to Yale grads, and 2) the gap between their grads and those of 50-100 other top schools has narrowed radically, even as prices rise.</p>

8

<p>Mini:
and 2) the gap between their grads and those of 50-100 other top schools has narrowed radically, even as prices rise.</p>

<p>I agree that the gap between grads of different schools is narrowing. I think, however, that people tend to conflate highly selective, HYPSM, excellent and expensive. There are many other schools besides HYP that are very selective; there are many other schools besides HYPSM ASW that are excellent; and there are many other schools that are just as expensive, unless a student gets merit aid that is not available at HYPSM. A lot of students who do not get into HYPSM actually end up in schools that are just as expensive (and arguably as good).</p>

9

<p>Mini, your statement that "At my alma mater, every full-price paying "customer" gets a $23k subsidy each year, or a total of $92k over four years." is a classic fundraiser distortion. Depending on the major, presence or absence of a grad school, athletic teams and many other factors, some students may be paying more than their cost of instruction and some much less. There are huge cross subsidies going on at any uni, and none of them actually publish any information about instructional costs.</p>

<p>It is really not fair or honest to take the overall expenses of a uni and divide that by the number of students and then tell folks that's the cost. Why? For one example, the cost of fundraising (development) is carried as one of the uni's expenses, but clearly has nothing to do with instruction. The same could be said for community outreach, athletic teams, alumni chapter costs etc.</p>

10

<p>If I can find, it I'll send you the Williams link. but no, developmental expenses (and new capital expenses) aren't included. And yes, they DO publish information about instructional costs (in aggregate.) Of course various courses of instruction cost different amounts, as do various sports, which the college supports because it thinks it makes for a better environment for ALL students (including those who don't play.) </p>

<p>In this case, the figure was not developed for fundraising purposes, but rather to find ways to rationalize pricing policy. It was the Pres. of Williams who came up with the airline analogy of different priced seats on the plane (which I think is a highly flawed approach, it being simply a way to rationalize accepting more high-paying customers)</p>

<p>What HYP has, and which every school envies, is a bevy (5%, 10%, 15%?) of sons and daughters of society's elite - opinion makers, trendsetting, style makers -- those that middle class members of society envy (even if they know they can never be like them.) Their academic character is irrelevant (who would care what Prince Charles' SAT scores were, if he applied?)</p>

<p>And by attracting a goodly number of said folks, one can save an awful lot of money on financial aid. Neither Harvard nor Princeton nor Stanford are among the top group in aid given out per student attending. Oddly enough, among the top 6, only Amherst is need-blind (doesn't exist), only they are not, as they have made it a point to reach out to Pell Grant recipients (250% more Pell Grant recipients than Harvard.)</p>

<p>But the reality is that, over time, as HYP and the like reject entire classes of students as talented as the ones they accept, things will even out, as they have over the past 25 years. And pricing hasn't yet become an issue - that was the point (I thought) of Xiggi's post. Applications are rising as prices rise, and I expect that could do so, and will do so for quite some time yet. We will look back at $42k/year as a bargain.</p>

11

<p>"And by attracting a goodly number of said folks, one can save an awful lot of money on financial aid."</p>

<p>So, should HPYS not accept students who come from wealthy families? It should be no surprise that people of wealth have the means to afford the best k-12 educations for their children. Doesn't it make sense that a large number of wealthy well-educated, well-qualified kids would apply to the top schools? Should they be denied admittance because they are wealthy?</p>

12

<p>mini - there is no way of determining the "cost" of an undergraduate education because a university does many things and has many sources of revenue. Some examples are licensing, sponsored research, grants, conference hosting, atheletic gate receipts, alumni contributions, naming rights, rents, hospitals, clinics, patents etc. etc.</p>

<p>However if you want to take a stab at a realistic number for a LAC then it is closer to $23,000 a year rather than $60,000. I base that number on publicle available figure for St. Mary's College a highly regarded state LAC in Maryland. Tuition, fees, and room and board run $16,241 a year and the state legislature pomies up $7,100 a year for each FTE. That brings the total to $23,360, Similar numbers for the University of Michigan, a huge state school with vast amounts of externally funded research and other revenue sources as well as an economy of scale is $21,579, At UVa that number is $19,282.</p>

<p>The elite schools are socialism in action. The object is to get everyone who can to pay for somebody elses education. The wealthy pay for the poor and the middle class pays for themselves. It is the redistribution of wealth in practice. I am not sure if I am horrified be it or admire it.</p>

13

<p>Mini, this is not the Shapiro/airline seats article, but this artcile supports your position regarding the true cost at Williams:</p>

<p><a href="http://www.collegenews.org/x1947.xml%5B/url%5D"&gt;http://www.collegenews.org/x1947.xml&lt;/a&gt;&lt;/p>

<p>
[quote]
Costs are the No. 1 concern parents have about higher education.</p>

<p>Zimmerman: That's no surprise but there are some things about those costs that parents and others need to understand. The most important is that no student pays the full cost of his or her education. Everyone is being subsidized. At public colleges and universities, the subsidies come mostly from taxes. And as I said, most students attend public institutions, which remain relatively inexpensive.</p>

<p>At private colleges and universities, the subsidies come mostly from endowment and gifts, past and present. Williams, for a useful example, spends each year about $75,000 per student to provide an education for which students pay on average $24,000. So, the price the average student pays covers less than a third of the cost of the education they receive.

[/quote]
</p>

<p>For more Williams's subsidies numbers, these articles are instructive, albeit a bit dated.
<a href="http://www.williams.edu/wpehe/DPs/DP-37.pdf%5B/url%5D"&gt;http://www.williams.edu/wpehe/DPs/DP-37.pdf&lt;/a> and <a href="http://www.williams.edu/Mellon/DPs/DP-45.pdf%5B/url%5D"&gt;http://www.williams.edu/Mellon/DPs/DP-45.pdf&lt;/a&gt;&lt;/p>

14

<p>"
Posts: 92</p>

<p>"And by attracting a goodly number of said folks, one can save an awful lot of money on financial aid."</p>

<p>So, should HPYS not accept students who come from wealthy families? It should be no surprise that people of wealth have the means to afford the best k-12 educations for their children. Doesn't it make sense that a large number of wealthy well-educated, well-qualified kids would apply to the top schools? Should they be denied admittance because they are wealthy?"</p>

<p>I hope you don't believe I said that. On the contrary - as I have said on more than two dozen occasions (you can search the archives yourself), I'd do exactly what they do, if in the same position. Actually, more so. I would take a certain number of places (maybe 10-15%), and, once it was decided that the students were qualified, I'd auction off the places to the highest bidders. Let the free market work its wonders! Why not a couple of million a year? Why have to wait on those "development dollars"? Then I'd have plenty of money to diversify the student body, offering an even better education to the wealthy than I can now. (I'm being perfectly serious.)</p>

<p>Look - I'm not the one raising the tuition. If you've got a beef, it isn't with me. The institutions are raising the tuition, and attracting more (rather than fewer) applicants in the process. Don't blame the messenger.</p>

<p>(Now, mind you, there are institutions - Amherst immediately comes to mind - whose charter and articles of incorporation call for "the education of INDIGENT young men of piety and talent.". Why the rich kids are there, or how they got there - well, you'll have to ask Amherst.)</p>

15

<p>And Dartmouth was established to educate Indians....</p>