Universities Are Becoming Billion-Dollar Hedge Funds with Schools Attached • Hacker News Board

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

#101

Post by JetSpiegel » Tue, Mar 22, 2016, 1:18 AM UTC

spectre256 wrote: post #79

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…

But then you don't get invited to Ivy League donor parties

In which you can make more money to donate to the fund.

It's turtles all the way down

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

#102

Post by hiddencost » Tue, Mar 22, 2016, 1:22 AM UTC

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.

It's an ad hominem, it's irrelevant. Engage with the theory if you want to a meaningful discussion. I'm not being dismissive because I don't want to deal with criticism, I'm being dismissive because it's not criticism of the content.

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

#103

Post by amluto » Tue, Mar 22, 2016, 1:27 AM UTC

whack wrote: post #99

jqgatsby wrote: post #82

Earlier quoted context omitted.

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.

It's possible that you're one of the unlucky people who falls into the combination you described above. Unfortunately, even the best system currently available will often have cracks, and you seem to have found the one that currently exists. The vast majority of the time, kids with rich parents have a substantially blessed childhood & family-support, which justifies them having to pay substantially more in tuition fe…

I tend to dislike systems of the form "if you make/own less than $X, you get $Y benefit". It often leads to nasty non-monotonic outcomes and like this.

For actual public benefits, I'd much prefer to give all the benefits to all the people and raise taxes accordingly. This means that, as a CA resident, I think I should be permitted to deduct rent even if my AGI is $38,259, and I think I should get the full Affordable Care Act subsidy regardless of my income. The rules would be simpler and my taxes would be simpler. In exchange, I would gladly pay higher taxes to make up the deficit.

For public university, it's a bit messier because of state residency rules. And for private universities, this wouldn't work at all unless the government directly subsidized private education.

(But maybe the government should ditch all the complicated student aid and student loan benefits and offer a blanket subsidy for education at accredited universities.)

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

#104

Post by jldugger » Tue, Mar 22, 2016, 1:33 AM UTC

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…

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

The safe withdrawal rate is set at 4 percent. Earmarking half of that 4 percent for student aid is pretty severe on the budget.

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

#105

Post by wildmusings » Tue, Mar 22, 2016, 1:33 AM UTC

amluto wrote: post #103

whack wrote: post #99

Earlier quoted context omitted.

It's possible that you're one of the unlucky people who falls into the combination you described above. Unfortunately, even the best system currently available will often have cracks, and you seem to have found the one that currently exists. The vast majority of the time, kids with rich parents have a substantially blessed childhood & family-support, which justifies them having to pay substantially more in tuition fe…

I tend to dislike systems of the form "if you make/own less than $X, you get $Y benefit". It often leads to nasty non-monotonic outcomes and like this. For actual public benefits, I'd much prefer to give all the benefits to all the people and raise taxes accordingly. This means that, as a CA resident, I think I should be permitted to deduct rent even if my AGI is $38,259, and I think I should get the full Affordable…

Throwing more free money at universities will just make things worse.

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

#106

Post by machinshin_ » Tue, Mar 22, 2016, 1:36 AM UTC

SilasX wrote: post #66

beeboop wrote: post #54

Earlier quoted context omitted.

This is ignoring a lot that goes into investment management. It's easy to say S&P would have done just as well on that particular year, but what about every other year? What about years with big losses? Additionally, investment managers do things like create portfolios for you that match your risk tolerance or other special needs/requirements. Overall, it's true that managed investments don't do as well as index fund…

Being able to find where you are on the risk/return and growth/income spectrums is not hard enough to merit the hundreds of millions of dollars in fees. For whatever strategy you want, find the corresponding index fund with that strategy, and it will probably have done better after expenses and will have more liquidity and less volatility.

When you have 40 BILLION to invest, you can't just dump it into an index fund.

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

#107

Post by gozur88 » Tue, Mar 22, 2016, 1:37 AM UTC

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…

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

Oddly enough, it's possible they can't. Endowment bequests frequently come with conditions, so they don't have complete flexibility in that respect.

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

#108

Post by noonespecial » Tue, Mar 22, 2016, 1:37 AM UTC

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.

The price of Serious Education, like that of Serious Illness is now quoted at $ImpossibleSum and then generously negotiated down to ($EverythingYouveGot + $EverythingYouCanBorrow).

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

#109

Post by shkkmo » Tue, Mar 22, 2016, 1:40 AM UTC

whack wrote: post #99

jqgatsby wrote: post #82

Earlier quoted context omitted.

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.

It's possible that you're one of the unlucky people who falls into the combination you described above. Unfortunately, even the best system currently available will often have cracks, and you seem to have found the one that currently exists. The vast majority of the time, kids with rich parents have a substantially blessed childhood & family-support, which justifies them having to pay substantially more in tuition fe…

> The vast majority of the time, kids with rich parents have a substantially blessed childhood & family-support, which justifies them having to pay substantially more in tuition fees.

How does it justify that? We want to punish them with debt because their parents might have provided them with some opportunities?

The current system of funding higher education penalizes children of parents who don't prioritize college. There is no point to this and it just helps perpetuate privilege. We should stop unfairly assuming that parents are willing and able to pay for college.

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

#110

Post by prawn » Tue, Mar 22, 2016, 1:41 AM UTC

nemothekid wrote: post #71

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…

> 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?* Most schools with that size of tuition don't. Stanford ( http://thinkprogress.org/education/2015/04/02/3642085/stanfo... ) is free is your household income is less than $120,000, and cheap from there on.

I didn't know that the aid would be that significant. Abroad, we hear so much about student debt and parents saving for college fees, but I imagine there'd be a large group of families under that $120k figure.