<p>I can feed, clothe, house, provide, and educate the kids I work with south India for about $120 a year. </p>
<p>I give a measly amount to my alma mater (#1 LAC) so I can feel good about subsidizing the millionaire's kid to the tune of $30k a year, or so they tell me that's what I'm doing.</p>
<p>I just find it rather astonishing how little correlation there is between a huge endowment and an institution's rank in the Washington Monthly poll which arguably measures things like social mobility, research and communty service:
<a href="http://www.washingtonmonthly.com/features/2007/0709.rankings.html%5B/url%5D">http://www.washingtonmonthly.com/features/2007/0709.rankings.html</a></p>
<p>In fact, judging from Harvard's #27 finish out of 33 institutions -- ten of which were private -- one might even predict that the higher the endowment the lower the likelihood an institution will finish near the top.</p>
<p>same thing among the LACs which are nearly all private. A&W are ranked 9th and 8th respectively while Swarthmore is very close to the bottom at #28. Grinnell, which arguably has the highest endowment per student in the country is nowhere on the list.</p>
<p>johnwesley:</p>
<p>Grinnell IS on the list -- at #68, down from #14 last year. If you look at the components of the numbers, it just shows how basically goofy the metrics are. Compare Grinnell to Williams and Amherst, both in the top 10. Grinnell has the same or higher percentage of Pell Grant recipients. It is comparable to Amherst in the PhD category (10 vs. 8 rank), and only a little below Williams (6) -- a ranking which, by the way, explicitly does not adjust for size (it's not percentage of PhDs produced, it's absolute number of PhDs produced). Grinnell smokes both of them in percentage of Peace Corps participants -- #2 vs. ## 107 and 38. None of them have ROTC.</p>
<p>So why is Grinnell ranked 60 places below Williams and Amherst?</p>
<p>(1) Williams and Amherst both beat their predicted graduation rates based on Pell Grant / SAT formulas by 4 or 5%. They both have a 96% graduation rate, i.e., nobody fails. Grinnell has a lower predicted graduation rate, because it has slightly more poor students and lower SATs, and it only beats its bogey by 1%, with 87%. That makes a huge difference in the rankings.</p>
<p>(2) Grinnell, like most LACs (inlcuding Amherst), gets no federal research grants, Williams does. This essentially offsets out Grinnell's advantage vs. Williams in the Peace Corps category.</p>
<p>(3) Amherst spends 31% of its federal work study money on service projects, Williams 16%, and Grinnell only 7%. That wipes out the Peace Corps advantage over Amherst and more.</p>
<p>So, when all is said and done, you get a 60-point ranking difference based on small differences in actual vs. predicted graduation rate, whether the school does federally funded research, and what percentage of work-study money is spent on service projects, offset by percentage of alumni in the Peace Corps. </p>
<p>Ooooh! That's meaningful!</p>
<p>I would suggest that not all those factors are equal. If you are measuring long-term service contribution, Peace Corps volunteers produced means more than how much of your work-study money gets spent on service projects. I wonder whether feeding at the federal research trough means anything. And the graduation-rate data certainly doesn't bear the weight assigned to it in measuring contribution to social mobility.</p>
<p>To provide another perspective, the #1 ranked school, Presbyterian, compared to Amherst, is either the same or vastly inferior in every category except one: it has a big ROTC program. Same for the #5 school, VMI. It has an even larger ROTC program, but it gets downgraded for missing its graduation target by a lot (ranking near the very bottom in that category, as in others). In fact, 4 of the 5 biggest ROTC programs rank in the top 6. That's what matters.</p>
<p>See, this is the thing: this country has been at war for the past five years. Crazy, I know. But, it has. We can argue about weights and emphasis, but, I'd be very hesitant to say, that ROTC is irrelevant in the larger scheme of things.</p>
<p>I'm not arguing otherwise. I don't think it's irrelevant at all, and it ought to be taken into account. But when it means that a big ROTC program basically trumps every other factor, it makes you wonder what the ranking system is telling you.</p>
<p>I think what it <em>may</em> mean is that ROTC is a major funding source for a lot more cash strapped LACs than I would have imagined.</p>
<p>Marite -- Harvard can lose 1% of its endowment since it has gotten very good returns on a number of its alternative (risky) investments. This should be an object lesson to less well endowed institutions, pension funds, etc.</p>
<p>Personally, I find it silly that Harvard and the handfull of mega endowed schools bother to charge tuition. Out of the $35k (?) they give back a big chunk in fnanacial aid, netting 60%. Then they have the expenses the financial aid office, all the forms and records. All the time that gets spent collecting and accounting for the money.</p>
<p>Of course, it is totally unrestriced cash, unlike endowments.</p>
<p>However, other colleges would shun them, and supply and demand being what it is, they could charge a lot more.</p>
<p>I would like to see them drop a couple of sports and auction a few spots to make up for eliminating tuition. I'll bet they could sell 100 places for $1m each.</p>
<p>That would also add a new dimension to the rankings. If all the Ivies did the same thing, you would have a market based ranking criteria. </p>
<p>I am with Mini -- there are a billion or two humans that live on $1/day, and it is hard to see giving institutions that can't really spend their money in a rational fashion even more problems.</p>
<p>Needless to say, it didn't get much traction.</p>
<p>I will give MIT credit with their opencourseware concept.</p>
<p><a href="http://ocw.mit.edu/index.html%5B/url%5D">http://ocw.mit.edu/index.html</a></p>
<p>They sort of figured out that they either couldn't or didn't want to have revenue based e learning -- so they are just giving it away.</p>
<p>LAV -- Harvard's revenue from students last year was about $650 million, a little more than 20% of its operating budget. Somehow I don't think the expenses of collecting and accounting for that money, or having a financial aid office, are high enough to make much of a dent in the $650 million.</p>
<p>Anyway, I would rather Harvard charged the going rate for its services and then did something fabulous with its endowment. Think of the debt we owe Lorenzo de Medici -- not a nice person at all -- for the art he commissioned during his lifetime.</p>
<p>I think they have about 6,715 @ $34k/year tuition. That would put the gross tuition @ about $230 million. After $100 million of financial aid, that would leave $130 million. I would be surprised if they didn't spend $10 million on all the overhead involved with FA.</p>
<p>The modest proposal to see if they could auction off 100 spots for an average of $1 million each would just about take care of things.</p>
<p>Overall, I would prefer if that they use the money to cure cancer to ensure world peace.</p>
<p>As long as I am on a rant, I have an additional beef. Namely the fact that colleges are always talking about the cost of computing. It came up earlier in this thread, but I have seen it other places.</p>
<p>Students are buying their own laptops. Or rather, parents of students are buying laptops. </p>
<p>The cost of bandwidth is relatively low ($50/month, retail) and some schools explicitly charge for this.</p>
<p>Wireless is a cheap technology.</p>
<p>If colleges aren't getting offsetting productivity gains, they should go back to paper and people.</p>
<p>Plus, since most students at the kinds of colleges discussed on CC have their own laptops or desktops, schools should get rid of all the shared computers and computer labs that have built up over the years.</p>
<p>Given Moore's Law, the cost of computing cycles is decreasing rapidly, so the idea that colleges need to spend heavily on IT is silly if they are doing it efficiently.</p>
<p>There is no amount we know of that will cure cancer or ensure world peace.
The funds that HYP have and don't need would be a drop in the bucket of the federal budget.
Still, I don't believe they need most of this money. A Yale economist (I can't reference this...maybe someone else could) opined that the only reason to have an endowment is if you believe you will need the money more in the future than you do now. I don't know of anybody who has argued that the money is more needed in the future.
Re: Lorenzo. I saw an exhibit at the Field Museum of Natural History in Chicago today. A special exhibit on Darwin. It seems he had enough family money to pursue his passion and not worry about making a living. A worthwhile use of excess funds.
I wish I could believe that HYP would choose wisely, even if they have the inclination.</p>
<p>If you use the college's own data at my alma mater (#1 LAC), you will quickly discover that more of the endowment (and alumni contributions) go to subsidizing the education of full-freighters (including the millionaires' kids) than they do for so-called "need-based aid". </p>
<p>The data would show that to be the same for many of the top LACs, and I expect most of the prestige privates as well,</p>
<p>^^ who cares, mini? The point is, neither the education of the millionaires nor that of the full-freighters is being compromised. The millionaires' kids are not getting a better education than the financial aid students (on account of the endowments). Both are getting the same level, quality of education.</p>
<p>Lux:</p>
<p>The cost of computer technology is not in the supplying of computers to students but of maintaining mainframes, of supplying terminals in many places, and of having technical help for both students and faculty and staff. This means, in many cases, renovating classrooms to allow for powerpoint presentations, videos, slide projectors, etc... The typical classrrom is a far cry from what I experienced in college, where classrooms just had a blackboard and pieces of chalk. It also means technical help to create and maintain websites for most courses, to troubleshoot when something goes wrong. All of this is quite expensive.</p>
<p>The point is that tuition rates for millionaires (and many others) are far, far too low, and I resent being asked to contribute to the alumni fund under the ruse that it will be used for scholarships for poor kids. They don't need it for that, and in fact, don't use it that way. If they raised the price to cover the cost of attendance, they then could use the surplus to support middle class kids who couldn't afford it, or use it for other educational purposes. Precisely what "educational" benefit accrues to ANYONE from subsidizing the education of someone who doesn't need the subsidy?</p>
<p>I actually don't mind subsidizing the millionaires' kids; what I resent is the lack of tranparency.</p>
<p>O.K. That's fair; I understand. (And I do agree that more tuition-aid opportunity should be there for the middle class.)</p>
<p>Many expenses for a university run counter to sound business principles. Computers are an excellent example. A business invests in new computer technology to develop economies and to compete. There's a decision that's made that the investment will net a positive return -- or stave off losses.</p>
<p>Not so for colleges. To prepare students for the "real world" the colleges have to remain on the cutting edge of science and technology, regardless of what the "return" is on their investment in the technology. And, of course, the return is nil -- unless you want to point out the attrition and diminished matriculation (lower tuition revenues) that ensues from failing to maintain top tier technology.</p>
<p>So when people insist on colleges being run more like a business, I sort of chuckle (and that's before I point out that 2/3 of all new businesses fail inside of 5 years, so it's not like the business world's approach to survival is some sort of fairy dust). The cost component of running a top college operate more like a Shop Vac, so the idea of trying to develop revenue streams that are equally greedy should come as no surprise.</p>
<p>But they are NOT developing revenue streams that are equally greedy. At least 25% of the student body at my alma mater could afford (and would be happy to pay) the $75k that the college claims it actually costs them to educate each student. Instead, they choose to provide each a $30k subsidy, much of which could otherwise have gone toward being on the "cutting edge" etc.</p>