<p>I think the dirty little secret is that they are socking it away. At the time I was involved in that research project, growth exceeded draw around 2:1.<br>
Plus, there are plenty of old funds at these top schools that can’t be specifically tapped because there simply are no kids who meet those intended specs. </p>
<p>This is why it is stunning to see H write this in their report: The net result: a sense of vulnerability in Harvard’s finances, highlighted by “endowment dependence and volatility, federal government dependence, non-endowment revenue stagnation, and a highly fixed cost structure.” Mindboggling.</p>
<p>There are still relatively low limits on how many you get from any one source and fees for each ACT, SAT, SAT II or CSS profile sent per school certainly adds up fast. So there is a strong financial incentive not to try for the bigger reaches.</p>
<p>I agree that tons of reaches can’t be on the list, it’s not affordable and most require a lot of extra essays and such so that limits the number a kid can prepare. But many mid-level private colleges don’t charge an app fee at all (or waive it if you apply online, or early),and don’t require much of a supplement, if any.</p>
<p>I’d LOVE to see colleges allow self-reporting of scores with an official confirmation only after acceptance. It seems crazy to me to have to pay all that $$ to send scores, sometimes multiple sittings of each test, when you don’t know if those scores are even going to be a factor, help or hurt your chances of admission.</p>
<p>D applied to a summer program that allowed her to self-report grades, upon acceptance an official transcript was required. This makes sense to me. I’m sure the College Board and ACT wouldn’t like it, but it would make it a lot easier for low SES kids to apply to several schools.</p>
<p>The fee waivers that come from the CB or NACAC (3 each, I think) can often be supplemented with colleges’ own fee waiver forms. They require a school official to confirm that you are on reduced/free lunch, basically.</p>
<p>What many Low SES kids do not get is this information…that there ARE official fee waivers, and that other ones are possible, that some colleges do not require app fees. This info is out there but not really in one spot, as far as I’ve seen.</p>
<p>I don’t think that’s a “dirty little secret”; the colleges and universities with the biggest endowments loudly trumpet how much their endowment has grown. New gifts to the endowment are typically a smallish fraction of that growth; most of it is return on investments, compounded over time and tax-free, and an endowment payout formula calculated to capture only a fraction of earnings growth over time (as long as average annual ROI exceeds 5%, the endowment will continue to grow).</p>
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<p>I don’t find this the least bit surprising. Yes, Harvard reports a $30-some billion endowment. But it’s been widely reported that a large fraction of that endowment is tied up in illiquid private equity funds, the true value of which is difficult or impossible to calculate because–well, because there’s no market for it right now. And they may be subject to very large capital calls on some of it. And they can’t cash in all their liquid assets—stocks, bonds, and such–or they’ll be left with nothing but the illiquid (and potentially worthless) stuff. As a result, Harvard, Yale, and some other big-endowment schools have been forced to issue bonds to raise cash just to cover operating expenses in recent years. There’s a very illuminating thread on this here on CC called something like “Endowment Woes & Liquidity Issues at Top Colleges.” It’s well worth checking out. I’m convinced the crisis is real; Harvard isn’t just woofing here. They have nominally large assets, but many of their assets may be worthless, or close to it.</p>
<p>There are very few schools where the spending per school is more than the tuition. There was a list around somewhere of the spending per pupil and I think the vast majority are under $20K. I took a shot about bottoms-upping the numbers for a couple of schools based on faculty ratios, burden FTE, facilities overhead and I got to about $20K as an estimate. </p>
I guess the question is whether you’d rather pay $50K to get $80K worth of bells and whistles education, or $20K to get $20K worth of education. I’ve said many times that an elite education is a luxury good–but it’s pretty nice when somebody else will pay part of the price of a luxury good.</p>
<p>except, here’s the thing, it’s not for the STUDENTS. It’s for the professors. They spend the money so they can be a prestigious institution, so they can get the students, so if they remain a prestigious school, then they have the reputation from teaching there, which makes them IMPORTANT.</p>
<p>It’s for the professors, for the ego of the administration and the alumni. </p>
<p>So, much like an employer like Chase will buy a better building in Manhattan, for NOBODY but the reputation of CHASE, the schools spend the money for the schools. But, it’s nice they can say it’s for the students. It’s like Chase saying, "hey, you really didn’t earn that interest, we subsidized it, since our overhead in Manhattan is so high. But, we’ve put the ATMs all over the place “for your convenience” "</p>
<p>Williams is probably among the most expensive schools to run, with a small number of students sharing the various resources. A larger school might have the same art museum, but have the cost per student be much less for it. And don’t forget the huge lower division classes at the larger school that make larger schools less expensive.</p>
<p>Then again, other schools may still be giving subsidies. Where can you live in a $600,000 place paying $1,444 per month for room and board? Seems like that is what some new or renovated dorms at Yale are claimed in another post here to cost per bed.</p>
<p>If there’s prestige mania, aren’t tomorrow’s alums today’s students? The ques of how much is actually spent on our kids is valid. But the whole is also part of the attraction. And the rep. And assumptions about the value of one degree over another.</p>
<p>When they figure cost/student, are they including dorms, utilities, security, library, web, activities and all the rest? Or just teaching?</p>
<p>As an academic, I think this is pure fiction. Most academics I know would much prefer to be on a faculty that is highly regarded by other academics in their field–say, at a UC Berkeley or a Michigan if not a Harvard or Stanford–than at some deluxe hothouse for over-pampered undergrads. Among academics, professional prestige is almost entirely measured by the quality of the faculty–by which is mostly meant the quality, quantity, and impact of scholarly research and writing. The quality of the students is secondary at best, if not entirely off the radar. The idea that academics are so motivated to bask in the reflected glory of their brilliant undergraduates that they would demand the administration spend lavishly on said undergraduates is just laughable. Sure, other things equal, most academics would rather work with stronger students, but that’s just a small part of what motivates them. </p>
<p>The fancy bells and whistles are entirely for the benefit of the students: students want them, students demand them, students are enticed by them, and students will go elsewhere to get them. It’s a purely consumer-driven arms race, with the consumers under the illusion that they’re paying for it all, when in fact it’s subsidized by wealthy benefactors, with a big boost from a taxpaying public that is duped into thinking all the tax breaks for elite private colleges and universities–tax-deductibility of contributions, tax-free earnings on endowment, tax-free treatment of property, and all the rest–are somehow for a “charitable” purpose, rather than for the private benefit of a pampered elite.</p>
<p>Oh, and by the way, most academics I know think all this lavish spending on undergraduates is absurd.</p>
<p>Looks like this explains why some large state universities with mediocre overall undergraduate reputations (based on not being all that selective for undergraduate admissions) can have highly regarded faculty and PhD programs in specific subjects (based on peer assessment).</p>
<p>I generally do enjoy your posts, but “as an academic” you are as invested in the current system and the rankings, which rely on this spending, as any trader is invested in continuing the fiction that they will leave for switzerland if they aren’t paid massive bonuses.</p>
<p>I would agree that most academics would prefer to be at an institution which is highly regarded by his or her peers. I would also say that most of that reputation is factored into the rankings.</p>
<p>Of course you believe that education is more expensive than it is. You are one of the employees. Employees always think they are doing more than they are getting paid for. ;)</p>
<p>Well, no, in fact I’m at a public institution that doesn’t have the resources to spend lavishly and delivers a pretty straightforward, bare-bones but efficient product at the undergraduate level, and is punished for it in the US News rankings which richly reward colleges for high expenditures-per-student. But that lack of recognition in the rankings doesn’t bother me because I derive great satisfaction from my work, in teaching, in my scholarship, in being part of a talented, hard-working, and intellectually engaged faculty that is in fact highly respected by others in our discipline.</p>
<p>By the way, the fact that US News falsely equates high expenditures per student–or inefficiency, to be blunt–with academic quality has long been one of my chief gripes with the US News ranking. Notice I’ve nowhere said that all the expensive extra bells and whistles provided by elite private colleges and universities are necessary, or money well spent. But it is money that is spent, entirely for the benefit of undergraduates.</p>
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<p>I’m not quite sure you mean by this, except that it is clearly intended as a slap. Do I think I’m “doing more than I’m getting paid for”? No, I know exactly what I do, and I know what I’m paid for, and those are the same thing. I don’t happen to believe all the extra bells and whistles provided by elite private colleges are necessary, and as I said, my institution doesn’t provide them. So I’m having a hard time understanding just what your charge against me is here.</p>
<p>First, I’m sorry if it felt like a slap. I was really being lighthearted. My husband happens to have been a trader, so if you knew me, you would know I was poking fun at both of us. But, to be fair, you don’t know me, and please accept my apologies.</p>
<p>I agree that the bells and whistles are ridiculous, and I also don’t think they are only done for the students. We will have to agree to disagree.</p>
<p>Again, I’m sorry if that felt disrespectful, it wasn’t meant nearly as seriously as it seems to sound, now.</p>
<p>The high-priced faculty IS one of the bells and whistles. It’s cool to take poetry writing from a famous poet, even if he doesn’t really teach writing any better than a grad student. And those famous, leading faculty people get paid a lot because there is a demand for them.</p>
<p>Note that $45,000 to $70,000 annual household income brackets the median (about $50,000) but includes more above than below median. So “mid-slightly-higher” would be a better description than “mid-low”.</p>
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