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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

#181

Post by joefarish »

hkmurakami wrote: post #175
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…

Interestingly, when Trinity College @ the University of Cambridge decided to make all tuition for its students free, the remaining colleges protested that it was "unfair" that Trinity would be able to attract the best students simply because it had more money than the others (it owns the second largest port in England, among other assets). Their policy was rescinded.

I heard another rumour that they wanted to provide free accommodation for their undergraduates as well. In 1988 they setup the Newton Trust [http://www.newtontrust.cam.ac.uk/studsupport] which awards "bursaries to nearly 3000 undergraduate students every year" which seems like a pretty good use of their money.

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

#182

Post by 77pt77 »

jldugger wrote: post #113
77pt77 wrote: post #74

Earlier quoted context omitted.

> Or you could invest at a 7% profit rate Tips welcome.

Broad market indicies like S&P500 are regarded as having a 7 percent return after adjusting for inflation.

According to http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/...

from 2006-2015 the SP500 had a geometric yearly mean return of 7.25%.

according to http://www.usinflationcalculator.com/inflation/current-infla...

The average inflation for that period is 1.9% so you get roughly 5%.

Still pretty decent.

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

#183

Post by IkmoIkmo »

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…

Mos of these financial institutions actually have high fees that are only charged if your parents are rich. I've been surprised to see how high your income may be at some of them, and still receive near-free education.

Thus the fees aren't really fees, they're fees for rich people who can afford them. And then you may wonder why you'd give a rich person free education by paying it from an endowment that, among other things, pays for the poor people's education, when the rich person can afford it.

As for your note on donations, I fully agree. You really, really, don't need to donate to Harvard. But that's mostly a function of alumni networks/events of the university itself, not necessarily people going 'hey I want to donate to a university... ah well, guess I'll choose Harvard then'. So it's not a decision you'll change easily.

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

#185

Post by justincormack »

Houshalter wrote: post #98
Cacti wrote: post #95

Earlier quoted context omitted.

Not to be flippant, but, it's a good thing Ben Franklin wasn't born in Zimbabwe!

Back then money was based on precious metals, not monopoly money. Although Early America did have problems with hyperinflation from war debts. Anyway the point is the money is invested, so it's not literally just cash sitting in a vault, but is earning itself interest.

The point is that interest does not always cover inflation. The fact that money was gold or paper back then makes no difference. Invested money can be lost.

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

#186

Post by Ntrails »

hkmurakami wrote: post #172
chrisabrams wrote: post #147

Earlier quoted context omitted.

Am I reading this correctly? A non-profit can buy real estate property and not pay taxes on the property? Is this investment property, or property being used for university usage?

That's why churches can remain where they are, often in very desirable locations.

It is also why charity shops annoy people so much, they can afford to run rather easier whilst skipping out on chunks of business rates etc

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

#187

Post by lmm »

shkkmo wrote: post #109
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…

> 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…

We have a limited amount of subsidy to allocate where it will do the most good. Most of the time the children of rich parents - even those who had little interest in college - have more advantages overall than even a fully subsidized poor student would have. So it makes sense to focus our subsidy on those poor students.

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

#188

Post by conceit »

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…

Ever heard of price differentiation, is that what you allude to? Also, it's not like %2 was a small gain for stable growth.

On a individual level 10.000$ per month of activity, not counting 2 months vacation per semester, would be enough for a good enough private instructor. Certainly, tuition, as in schooling, is completely covered by tuition, so it's not completely fair to throw it all in one bag.

That is, of course the billions can be taken into account in a mixed cost calculation, but that would delude the elitism, wouldn't it? I agree, subsidized gratis pro bono education should be possible, but it could never be costless.

Now, what about the private tutors: Wouldn't one on one instruction be a remarkable improvement over huge, passive lectures? There is the problem of quality control, but from what I can tell, this does exist too to a lesser degree in academia. It can sway into the opposite direction even, if a research professor is too far out there to be helpful, for lack of better words. A lot of undergrad classes are taught by mere grad students. There are a lot of them.

Wouldn't the dialog still far outdo the lesser quality content that is communicated, because the latter relies a lot on the students understanding anyway and the sooner that reaches a certain basic level of fundamental knowledge, the better? Edit: Meaning, fundamental knowledge that is enough to allow the student to judge the progress and to also study independently, knowledge that is fundamental enough, that less than world class understanding makes virtually no difference.

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

#189

Post by estefan »

rdancer wrote: post #176
kough wrote: post #125

Earlier quoted context omitted.

I'm in a similar situation right now: on paper my father's business owes him a lot of money that he "loaned" it from his salary, but in reality that money does not exist and it's not going into his pocket any time soon. Mix in two brothers with their own college costs, stir to taste. I took two gap years to work and save money; it's absurd to me that I'm paying full tuition price in this situation, but the financial…

Your family is too proud for the business to declare bankruptcy and go through Chapter 11 debt restructuring? When you're looking to pay tens of thousands in tuition, it helps to have a smart accountant, and plan a few years ahead. Is it a little unfair that people enter adulthood without a spec of financial literacy, and are immediately taken advantage of? Yes, but if a fool and his money are easily parted, the only…

If only these people could get some sort of... I don't know... "education" to learn how not to be so foolishly parted from their money...

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

#190

Post by 1stop »

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.

You know if you didn't want the 100k loan, you could have gone to another university...?

You make being a privileged middle class kid seem like such a chore.

There is always someone better then you, and there id always someone who got what you did for less. But on the flip side, you are also the someone to someone else.

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