<p>It’s been said that Harvard is a hedge fund with a school attached for tax preferences. Hedge funds tend to make high-risk/high-reward investments, much like venture capital funds. Maybe 7 in 10 start-up ventures will fail, but the other 3 will make up for it manyfold.</p>
<p>The kids who get massive subsidies in tuition will also get alumni requests for donations for many decades to come. A few will eventually be in a position to donate millions. One would think someone has crunched the long-term data and found this subsidy to ultimately not be so much a gift as a long-term investment.</p>