Timothy Noah reports:
At the end of 2007, Harvard announced that it would limit tuition to no more than 10 percent of family income for families earning up to $180,000. (It also eliminated all loans, following a trail blazed by Princeton, and stopped including home equity in its calculations of family wealth.) Yale saw and raised to $200,000, and other wealthy colleges weighed in with variations.
Noah argues that this is a bad thing because it encourages other colleges to give tuition breaks to families with six-figure incomes, thus sucking up money that could otherwise go to reduce tuition for lower-income students. For example:
Roger Lehecka, a former dean of students at Columbia, and Andrew Delbanco, director of American studies there, wrote in the New York Times that Harvard’s initiative was “good news for students at Harvard or Yale” but “bad news” for everyone else. “The problem,” they explained, “is that most colleges will feel compelled to follow Harvard and Yale’s lead in price-discounting. Yet few have enough money to give more aid to relatively wealthy students without taking it away from relatively poor ones.”
I don’t follow the reasoning here. Noah also writes that Harvard received “35,000 applications for fewer than 1,700 slots,” so I don’t see why these other schools have to match Harvard at all. Why not just compete for the 33,300 kids who get rejected from Harvard (not to mention those who don’t apply to the big H at all)? Sure, there’s Yale too, but still, there’s something about this story that’s bothering me.
Ultimately, this doesn’t seem like it’s about income at all. I mean, suppose Harvard, Yale, etc., took the big steps of zeroing out their tuitions entirely, so that even Henry Henhouse III could send little Henry IV to Harvard without paying a cent (ok, maybe something for room and board, but really that could be free too, if Harvard wanted to do it that way). Now maybe this wouldn’t be a good move for the university–I’m sure the money would be more effectively spent as a salary increase for the statistics and political science faculty–but let’s not worry about the details. The point is, if Harvard and Yale became free, Noah’s argument would continue to hold. But is it really right to criticize a rich institution for giving things out for free? I’m planning to publish my intro statistics book for free. Does this mean I’m a bad guy because I’m depriving Cambridge University Press the free money that they can use to subsidize worthy but unprofitable books on classical studies? I don’t think so.)
To put it another way, it seems pretty weird to me to say that Harvard has an obligation to keep its tuition high, just to give other colleges a break. If Harvard and Yale want to cut tuition costs, or if MIT wants to stream lectures online for free, that’s good, no?
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But I think I’m missing something. At the end of his essay, Noah says he wants college costs to decrease (“surely the answer is to curb the inflation of this commodity’s price”), which seems to contradict his earlier complaints about Harvard and Yale’s tuition-cutting. I’d be interested in hearing from him (and from Lehecka and Delbanco at Columbia) what their ideal Harvard and Yale tuition plans would be. These institutions already charge very little for kids from low-income families, so if you want to cut the cost of tuition, but not to offer discounts for the upper middle class, then what exactly are they recommending? It’s hard for me to imagine they want Harvard to cut tuition for rich kids, but that seems like the only option left. I’m confused.
The "problem" is that it's "bad" for the Ivy+ schools that don't have enormous endowments like Princeton, et al. Columbia wants to compete for the kids getting in to the 5000 slots at HYP, and not just the "leftovers", even though there are a ton of awesome kids who don't get in to HYP each year. Lehecka and Delbanco have ties to Columbia; does Noah have a connection to a non-HYP Ivy+ school?
If Harvard wants to help the average American, it
would use its hefty endowment to open up branch campuses elsewhere in the world. Gelman has already discussed an article that indicates only the top 4 or so universities populate chi-chi consulting firms that make a non-market rate of return, and there is a similar phenomenon at all levels of elite positions (all 9 Supreme Court justices, for example, graduated from Yale or Harvard Law Schools). Harvard has helped create a new aristocracy, this one based not on birth or money but rather on "intelligence". All such aristocracies eventually become out-of-touch and start behaving as, well, aristocracies (read The Best and the Brightest, or consider that blase attitude of elites to the collapse of the middle class in this country). So opening up the "slots" would offer some opportunity for more individuals to compete for the few elite positions in this society.
Will it happen? Naw. Harvard and Yale and Princeton exist for the perpetration of privilege–they've just adopted to the times, where now a 2300 SAT gives you entrance into that rarefied circle. Elites that don't share the circumstances of the masses see things differently, and think they are better than the "dangerous" classes, as they were called in a less euphemistic time.
I think the point is that Harvard should focus more on cutting tuition for poor students. The authors are presenting this in the same way as if we expanded social welfare to a broader swath of society–it would probably require us to dilute benefits along the way, which would ultimately hurt the very poor who needed the social welfare most in the first place. And, at the same time, it would provide social welfare to people who need it somewhat less than the very poor.
Whether this is factually the case is another story–I don't know the answer–but I think that is their argument and it makes some intuitive sense. But ultimately it is an empirical question as to whether it will have to happen or already is.
We are middle class (90K/ year) and we are sending a child to college next year.
I think 180K can afford this tuition. We are the ones who are really out of luck. I've heard awful stories – a local girl got into Brown, with a family with income like ours. She got zero financial aid. It turned out that Brown felt it had dibs on the family savings – for business flexibility reasons, they had no 401K. So Brown felt completely okay about absorbing 200K of the family's assets, their only savings. That is just wrong.
There are plenty of middle class (as in 60K – 90K not 180K) kids who graduate with 100K in debt. That is just wrong. They should not have been admitted. The upshot is that the poor get a free ride and the rich can absorb the cost so this huge debt burden falls on the middle class. That is wrong.
What I find weird with this fee limitation is that it is a function of family income which I suppose in most cases is equivalent to "parents income". Now at which age does a persons value stop being defined by her parents wealth?
Another defect in comparisons of the form "x applicants for y slots" is that it ignores the number of applications that each of the x applicants made to other places. If the 35,000 Harvard applicants each applied to 5 places of comparable stature as Harvard (very common, I would guess) then the selection rate isn't that extreme. If they applied to 10 places, then we are talking about 50% success rate. That hardly seems like a problem.
"…at which age does a persons value stop being defined by her parents wealth?" – float
As soon as they accumulate enough wealth(or debt) for themselves.
personally I'm not so concerned with the wealthy getting a break or the poor getting a free ride. What I don't like is the fact that entry into these schools can be bought by those who can afford it, regardless of their merit.
The people that are really getting the shaft are those that exceed the qualifications but get rejected because all of the slots have been bought up already by students with inferior qualifications.