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Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

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Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#81

Post by [deleted] »

hiddencost wrote: post #22
lr4444lr wrote: post #12

Sidenote, and I may get down-voted heavily for saying this, because he's got plenty of "cred" on so many different fronts, but Noam Chomsky always struck me as a hypocrite when it came to his economic and political thinking for taking a pension supported by the $13 billion MIT endowment, which is surely generating money through many of the practices disparaged both in this article and Chomsky's own beliefs.

Hypocrisy is such a boring & irrelevant criticism in most contexts. His critical theory is much more important than his practice. He has to survive in the world that exists, not the one he wishes existed. There's really minimal value in such a symbolic gesture as rejecting a pension, and criticizing his ideas on such irrelevant grounds takes away from actually talking about the issues raised.

[deleted]

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#82

Post by jqgatsby »

jonknee wrote: post #70
andr3w321 wrote: post #68

I don't really care if universities hire hedge managers to manage their endowment, but it's absurd that schools with multibillion dollar endowments still charge tuition. Yale has ~12,000 students and a $26 billion endowment. Tuition is ~$45,000 per student. $45,000 * 12,000 = $540 million. They can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? Of course this ignores finan…

> I don't really care if universities hire hedge managers to manage their endowment, but it's absurd that schools with multibillion dollar endowments still charge tuition. Yale has ~12,000 students and a $26 billion endowment. Tuition is ~$45,000 per student. $45,000 * 12,000 = $540 million. They can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? It's mainly a tax on rich…

I walked out of MIT with $100K in student loans, because I had the combination of 'parents who make too much money' and 'parents who had five kids and did not adequately save for their children's education'.

I'm all for soaking the rich, but how is that fair? I was apparently rich by association, and it was pretty upsetting to see kids who were ostensibly poorer than I was get a substantially easier start in life.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#83

Post by icebraining »

spriggan3 wrote: post #65
hiddencost wrote: post #22

Earlier quoted context omitted.

Hypocrisy is such a boring & irrelevant criticism in most contexts. His critical theory is much more important than his practice. He has to survive in the world that exists, not the one he wishes existed. There's really minimal value in such a symbolic gesture as rejecting a pension, and criticizing his ideas on such irrelevant grounds takes away from actually talking about the issues raised.

> His critical theory is much more important than his practice. People should also do what they preach. And acknowledge their own bias and hypocrisy which Chomsky never does. He does like you, dismisses any criticism as "irrelevant" and that's why nobody can debate with Chomsky, there is no discussion.

People should also do what they preach.

Why? If one is issuing mandates from a position of authority, I agree that following what one imposes on others is essential, but in intellectual discussion one should be free to argue a position and its opposite the next minute. Anything less is downright dangerous for the group and society as a whole. We can't depend on the half-dozen cranks that actually live their lives swimming against the tide to argue for everything that is truly different, nor should we trust their arguments just because they turn their crackpot theories into practice.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#84

Post by wildmusings »

jonknee wrote: post #70
andr3w321 wrote: post #68

I don't really care if universities hire hedge managers to manage their endowment, but it's absurd that schools with multibillion dollar endowments still charge tuition. Yale has ~12,000 students and a $26 billion endowment. Tuition is ~$45,000 per student. $45,000 * 12,000 = $540 million. They can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? Of course this ignores finan…

> I don't really care if universities hire hedge managers to manage their endowment, but it's absurd that schools with multibillion dollar endowments still charge tuition. Yale has ~12,000 students and a $26 billion endowment. Tuition is ~$45,000 per student. $45,000 * 12,000 = $540 million. They can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? It's mainly a tax on rich…

That pricing structure has allowed these elite colleges to get away with gross waste and inefficiency. Imagine the scandal if Yale actually cost $50,000 a year for your average family. It'd blow up even more when people realized where all the money from tuition hikes go (hint: it's not toward hiring more professors). The people who get really screwed are those just above the threshold where they receive no or negligible financial aid.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#85

Post by Pyxl101 »

andr3w321 wrote: post #68

I don't really care if universities hire hedge managers to manage their endowment, but it's absurd that schools with multibillion dollar endowments still charge tuition. Yale has ~12,000 students and a $26 billion endowment. Tuition is ~$45,000 per student. $45,000 * 12,000 = $540 million. They can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? Of course this ignores finan…

> [Yale] can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for?

The purpose of research universities is to engage in scientific research, not to educate people. Education is one of their activities but not their primary goal. For more about this, read "The Purpose of Harvard is Not to Educate People" [1]:

> But there is one misimpression that people seem to have[]: the purpose of Harvard is not to educate students. If anything, its primary purpose is to produce research and scholarly work. Nobody should be surprised that the gigantic endowment isn’t put to use in providing top-flight educational experiences for a much larger pool of students; it could be, for sure, but that’s not the goal. The endowment is there to help build new facilities, launch new research initiatives, and attract the best faculty.

The purpose of an endowment is to generate an income stream forever. It's typical for the organization with an endowment to spend only what they earn in interest at most, with some preferring to spend less so that the endowment grows over time.

It's possible that they're investing so well that they can afford to spend 2% every year, but that's just one cost among many costs that the university has - such as paying for its staff, its facilities (real estate, buildings, and so on) - and staff and buildings that help produce research.

[1] http://blogs.discovermagazine.com/cosmicvariance/2008/05/29/...

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#86

Post by jacquesm »

huac wrote: post #73

A bit tangential, but don't donate to Ivy Leagues. I get that you might feel a sense of pride in having graduated from the school, but with a 11 digit endowment, you can rest assured that the school will be there for future students in perpetuity. Rather, give to state schools or community colleges or really, any other school. Help them serve students of all economic backgrounds, not just the elite. The most importan…

And don't limit your search for schools to donate to to your country of residence.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#87

Post by jsjohnst »

ykl wrote: post #40
KKKKkkkk1 wrote: post #32

The problem is that an Ivy League school is paying the expenses of managing investments worth a gazillion dollars instead of focusing on research and education. Money management is not what the universities are good at, and it's not what they are for. But in fact, the "hedge fund problem" is not the only problem American universities have - they are also running sports teams, housing, construction and real estate ope…

Not to mention vast hospital networks~ in a number of cities, universities run major or even the primary hospital network in the city.

How do you suppose that med students get the required on the job training (aka residency) otherwise? Teaching hospitals are a very necessary thing in the medical field.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#88

Post by Cacti »

rayiner wrote: post #72
andr3w321 wrote: post #68

I don't really care if universities hire hedge managers to manage their endowment, but it's absurd that schools with multibillion dollar endowments still charge tuition. Yale has ~12,000 students and a $26 billion endowment. Tuition is ~$45,000 per student. $45,000 * 12,000 = $540 million. They can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? Of course this ignores finan…

Yale's financial aid is extremely generous. It's free for HHI below $65k per year. It's $12,500 per year up to $150k. It's half-price up to $200k. I'd argue it's better for families making more than $200k/year to be paying in than to give them free tuition.

That's much better than I expected. That being said, outside of a handful of extremely rich universities (and we are really talking a handful or two), most tend to "tax" the middle class more than anyone.

I mean... I'm not sure if I'd consider 150k for a household middle class (probably upper middle) but in most places, again, with a few exceptions, you're basically required to pay the full tuition. In cash. After taxes. $50k a year. It's an astronomical sum for just about anyone. And these are not terrible schools, we're talking some of the top universities in the world here, sitting on tons of money.

I mean, I know the gutting of the middle class is hardly news but, phew. Education costs really take it to another level.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#89

Post by jonknee »

jqgatsby wrote: post #82
jonknee wrote: post #70

Earlier quoted context omitted.

> I don't really care if universities hire hedge managers to manage their endowment, but it's absurd that schools with multibillion dollar endowments still charge tuition. Yale has ~12,000 students and a $26 billion endowment. Tuition is ~$45,000 per student. $45,000 * 12,000 = $540 million. They can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? It's mainly a tax on rich…

I walked out of MIT with $100K in student loans, because I had the combination of 'parents who make too much money' and 'parents who had five kids and did not adequately save for their children's education'. I'm all for soaking the rich, but how is that fair? I was apparently rich by association, and it was pretty upsetting to see kids who were ostensibly poorer than I was get a substantially easier start in life.

> I'm all for soaking the rich, but how is that fair? I was apparently rich by association, and it was pretty upsetting to see kids who were ostensibly poorer than I was get a substantially easier start in life.

A private school deciding to charge for its valuable stamp of approbal has nothing to do with it being a fair price.

Re: Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached

#90

Post by wildmusings »

jqgatsby wrote: post #82
jonknee wrote: post #70

Earlier quoted context omitted.

> I don't really care if universities hire hedge managers to manage their endowment, but it's absurd that schools with multibillion dollar endowments still charge tuition. Yale has ~12,000 students and a $26 billion endowment. Tuition is ~$45,000 per student. $45,000 * 12,000 = $540 million. They can't spend 2%(540/26,000) of their endowment per year on free tuition? What is this money for? It's mainly a tax on rich…

I walked out of MIT with $100K in student loans, because I had the combination of 'parents who make too much money' and 'parents who had five kids and did not adequately save for their children's education'. I'm all for soaking the rich, but how is that fair? I was apparently rich by association, and it was pretty upsetting to see kids who were ostensibly poorer than I was get a substantially easier start in life.

Whenever people talk about making 'the rich' pay for something, remember that their definition of 'the rich' usually ends up being anyone who makes more money than them.
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