<p>Shizz, I think you proved my point with your quote of "The gritty research a student does is worth more than the stipend, which barely covers cost of living". That's exactly what I was getting at - that while the department may be paying a good chunk of change, what they're getting back is worth quite a bit more, so you could say that the department is actually making a profit from its graduate students.</p>
<p>And I would question your contention of schools taking you in and teaching/training you for the first two years. This tends to happen in the humanities, and even then, not that much. Usually, graduate students get immediately thrown into RA/TA-ships. At MIT, for example, if you're an engineering graduate student, unless you are a rare student on fellowship, you are basically expected to find funding through a TA/RA-ship from the get-to. The same tends to be true for engineering and natural-science graduate students at most schools. Hence, there is minimal teaching/training involved. The school is extracting value from day 1. </p>
<p>I would also point out that there are plenty of students who work as RA's for 4-6 years and are still nowhere close to getting their PhD. In fact, all their RA work actually harms their efforts to get the PhD, principally because it takes up so much time, time that could be better spent on their own studies. It would be nice to say that it's fair compensation for a person to be an RA for 4-6 years and get the PhD in return, but the sad reality is that many don't. </p>
<p>I would also point out that at most top-ranked schools, master's degree students are financially unsupported. At MIT, for example, if you come in as a master's degree student, you gotta take care of your own bills. Same at Harvard. You can get an RA/TA-ship, but if you don't, then you're racking up debt. Furthermore, if you're coming in as a PhD student, then unless you're on full fellowship (which is rare), then, again, you're expected to work as a RA/TA to pay your way. So for the most part, I don't see the harm in having a person get a master's and then transfer away. The school benefitted during all that time the student was getting the master's - either through regular tuition, or through RA/TA work. The only 'harm' I can see is with those rare students who come in on fellowship and then leave. But that is no different from a guy who mooches off the fellowship and does nothing until the fellowship until it runs out, and then drops out of school to get a job. And I know plenty of graduate students who do just that. The fellowship basically becomes nothing more than a free handout.</p>