Over the last quarter century, Harvard University has transformed itself into one of the world’s largest hedge-funds, with the huge profits of its aggressively managed $38 billion portfolio shielded from taxes because of the educational institution it continues to run as a charity off to one side.
The numbers tell the story. Each year, the investment income the university receives from its private equity and securities holdings averages some twenty-five times larger than the net tuition revenue from its 6,600 undergraduate students. Under such circumstances, continuing to charge tuition of up to $180,000 for four years of college education is unconscionable.
Admittedly, Harvard does exempt from tuition families earning less than $65,000 per year and provides some financial aid to families with incomes up to $150,000. But relatively few less affluent families even bother applying because they assume that a Harvard education is reserved only for the rich.
If Harvard abolished tuition the announcement would reach around the world, and soon nearly every family in America would be aware that a Harvard education was now free. Academically-successful students from all walks of life would suddenly begin to consider the possibility of attending Harvard. Other very wealthy and elite colleges such Yale, Princeton, and Stanford would be forced to follow Harvard’s example and also abolition tuition. There would be considerable pressure on all our public colleges and universities to trim their bloated administrative costs and drastically cut their tuition.