<p>Lots of companies do. It’s called market segmentation. Stores do it via coupons and discounts.</p>
<h2><<lots of="" companies="" do.="" it’s="" called="" market="" segmentation.="" stores="" do="" it="" via="" coupons="" and="" discounts.="">></lots></h2>
<p>How is that economic discrimination? Rich people can scoop up cheap airline seats, perhaps more efficiently than poor people. Poor people can buy up if they so choose, just as rich people can, and ofter do, clip coupons and seek discounts. I certainly don’t expect university Groupons any time soon. No, it is not the same thing.</p>
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<p>I don’t think it implies that at all.</p>
<p>Look, suppose on the advice of his accountant, Thurston Howell III decides he’ll give $1 million annually to charities. In most years he gives some to Harvard, some to a hospital, some to his church, and some to a local soup kitchen. But in years when Harvard comes to him hat in hand asking for a million, Harvard is his priority and the other charities get squat. That’s his choice. But it surely is “crowding out” the other charities he otherwise would have funded. </p>
<p>And Harvard asks for a lot. Very few non-profits have the brass to announce they’re going to raise $6.5 billion in charitable contributions over a compressed time period. According to the National Philanthropic Trust, total charitable giving in the U.S. in 2012 was $316 billion. You can say Harvard’s ask is a small fraction of that, but when you consider there are more than a million charitable organizations in the U.S., it’s pretty clear Harvard is taking up quite a large share. Or when you consider that, according to NPT, 13% of total charitable giving–a bit over $40 billion annually–goes to educational institutions, as in 3,000+ 4-year colleges and universities, who knows how many 2-year colleges, 30,000 high schools and . . . well, you get the picture.</p>
<p>And you think Harvard’s elbowing its way to the front of he line and asking for $6.5 billion isn’t going to result in any “crowding out”? Of course it is.</p>
<p>blclintonk wrote: "According to the National Philanthropic Trust, total charitable giving in the U.S. in 2012 was $316 billion. You can say Harvard’s ask is a small fraction of that, "</p>
<p>Yes, you can say that since the $6.5B is over 5 years - so about 1.3B a year. So not a lot of “crowding out” at all.</p>
<p>someoldguy wrote: “I’ve heard folks say that Harvard has basically become a hedge fund with a university attached. But I also suspect this is probably about the last place on earth where one could have a reasoned discussion about that.”</p>
<p>Because you heard something that was so wrong it is silly, don’t be surprised if people don’t want to discuss it.</p>
<p>Successful institutions have money that they need to wisely invest. Apple has about $120B in cash - it doesn’t mean it is a hedge fund with a product company attached.</p>
<p>Sure financial aid is economic discrimination, which doesn’t happen with other consumer products because when it comes to undergrad tuition, Harvard actually operates as a charity. Economic discrimination, i.e. means testing, happens throughout the public sector on both the government and private sides. The right comparators are not for-profit businesses but churches, Medicaid, public housing, etc. You will definitely get a different answer based on your income if you show up at a retirement center asking to move in at the subsidized rate, or at a faith-based hospital asking for charity care. If you can afford it, you’re going to be charged full fare.</p>
<p>“If endowments served all students equally, tuition would be reduced across the board and more families could afford to pay full fare. Those who cannot would not have as much loan debt as total costs would still be lower.”</p>
<p>No only would I refuse to give a dime to such a Harvard, I would never have wanted to attend. Let’s have millionaires and waitresses alike pay $20k per year to send their kids to Harvard, and that’s fairer because the waitress’s kid will only come out owing $80k instead of $200k? No thanks.</p>
<p>You’re suggesting that Harvard abandon the one purely charitable aspect of its operation in favor of devoting more endowment resources to well-off folks. It doesn’t sound like you want Harvard to act more like a charity to justify its tax exemption. Sounds like you want Harvard to subsidize YOU.</p>
<p>The discussion of tuition re Harvard is interesting but rather meaningless. They admit @ or around 9% Pell eligible students. I don’t see this as particularly discriminatory against anyone other than the poor. </p>
<p>The fact that Harvard gives price breaks to the upper middle class and still has 40% full pay is more interesting. 40% in the 1%. 9% Pell. Leaves 50% middle class. </p>
<p>Is it the poor 9% who are hogging up the spots? Not really</p>
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<p>How about if all H students attend for free. Would you be opposed to donating then?</p>
<p>You are fine with donating to H when it provides significant FA to families making $180,000 per year, but not fine if the families are making more than that? Where do you draw the line of refusal?</p>
<p>I’d draw it at the point where it is unaffordable for the children of waitresses to attend.</p>
<p>Ok, so your objection hinges on how expensive H is for the lower-income students. Do you have any objection to H providing a free education to upper-income students?</p>
<p>Why should H provide free education to upper income students? Parents are apparently willing and ABLE to pay.</p>
<p>Well H already subsidizes up to 180K. </p>
<p>What’s the difference?</p>
<p>95% of the population? </p>
<p>Households earning over 180K (actually it may be 150K) are in the top 5 percent. So Harvard is being incredibly generous to all but the very top earning households.</p>
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<p>Not necessarily. 20-25% of H admits go elsewhere. Quite possibly for monetary reasons. Students admitted to H probably have a myriad of scholarship options at other colleges. If an admitted kid from a $190K household whose parents decide they can’t afford the $200K+ tuition, then he doesn’t get to go. Not that you necessarily care; I’m just pointing that out.</p>
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<p>One could argue that economic discrimination happens with plenty of products. The difference is that it usually aids the rich and creditworthy. Poor people pay more in interest for the same products or services. Wealthy people can obtain credit cards that come with plenty of benefits (think 40,000 to 100,000 free miles on some cards.) Poor people often fall for predatory lending schemes, including indian tribes lending and pawn shops. </p>
<p>Financial aid has also various forms. If a school such as Harvard can offer 100 percent grand aid, most schools offer aid in the form of loans. And we know how that is working currently, and might get worse in the future. </p>
<p>All in all, it is better to be rich. Or rich enough! :)</p>
<p>I read that renovations of dorms will be done with some of this money. Many suites in the dorms require that room mates walk through another room mate’s room to get to the bathroom. The old dorms are charming in their way, but I imagine Harvard wants to update to stay competitive against Yale and Princeton et al. The renovated dorms also feature some technology resources in the dorms.</p>
<p>Small point, but not all freshmen live in the yard.</p>
<p>If you make $180K as a family, I believe it still only costs $18K a year for your student at Harvard.</p>
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<p>Yes, and just because a family is full-pay at H, doesn’t mean they are paying without private loans. Plenty of $190K+ families may be complicit in our national student-loan problem by borrowing to put junior through H. Does it make sense for them to do this, when H is sitting on $30 billion in tax exempt money?</p>
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<p>This is exactly the type of planning that feeds the problem.</p>
<p>My D lived in one of those dorm suites. When paying $50K per year, my reaction was, "Really? for $50,000, my D has to share her bedroom with a roommate and her boyfriend’s trips to the bathroom? (I am told those rooms were originally one-bedroom suites, but now the common area is used as a bedroom and that is why the bathroom access is located in it). If I was paying nothing, or a much more reasonable sum, I probably would not have cared whether she had much privacy, and H would not have to go out and raise and spend more money to keep up.</p>
<p>“Do you have any objection to H providing a free education to upper-income students?”</p>
<p>Yes. I don’t think it would be evil, but I wouldn’t donate to that enterprise. I’m uncomfortable enough with the subsidy full-pay students currently get. I give only a token amount each year to register my satisfaction with what H gave me. I don’t consider it part of my charitable giving.</p>
<p>That makes sense. I imagine it must be very difficult to rationalize H’s FA as “charity” when it comes to families making $180K.</p>