Why did Harvard announce
yesterday that its tuition fees, for students whose families earn between $120,000
and $180,000, would be 10% of family income? Frankly, I buy the
official story: that those students were getting less than the maximum benefit
from Harvard due to financial pressures. And the marginal cost of implementing
this policy is only $22 million a year: just 0.06% of the size of the Harvard
endowment. It’s almost a no-brainer, really.
But Zubin
points out there are other possible motivations. One is that lower debt
burdens allow students to follow their dreams and work for the government or
for non-profits rather than feeling compelled to work for McKinsey or Goldman
Sachs. I buy that too. And then there’s the whole question of competition for
"top students":
"It’s a bold move that makes a lot of sense," Jesse Rothstein,
an economist at Princeton told me. "A lot of these schools are competing
really hard to attract a set of students that are not conventionally poor
but are at the lower range of their pools and cost is a big factor for them."
While Harvard is the preeminent school in the country, before the move, if
Student A was accepted to Harvard, Princeton, and M.I.T. and the two latter
schools were offering better financial aid packages, it was no guarantee that
Student A would choose Harvard. But now it’s a nearly no-brainer for others
like Student A and that means Harvard attracts even more top students.
We’ve been
here before: I simply don’t buy this idea that there’s a limited pool of
"top students" which all top universities want. The most qualified
cohort of college applicants every year vastly outnumbers the number of places
at Harvard, Princeton, and MIT combined. The admissions officers at all those
universities have a large and necessarily somewhat subjective set of criteria
which lead them to choose some subset of that cohort for admission. And that
subset, which gets admitted, invariably does very well. But any other subset,
once admitted, would also do very well.
Harvard is – and should be – defined much more by what happens
to students after they’re admitted, than it is by the quality of students, however
defined, on their first day as a freshman. And I think that might explain another
reason for this move. Students from families earning between $120,000 and $180,000
are likely to be quite rich when they grow older, and the fonder their memories
of Harvard the more they’re likely to donate. It’s entirely possible that this
whole scheme is a money-maker for Harvard, once you include the extra donations
these students, especially the ones who make many millions of dollars, are going
to give to the Harvard endowment in decades to come.