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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

#201

Post by JonFish85 »

mdpopescu wrote: post #156
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.

You're all for soaking the rich, except when it applies to you?

Almost by definition, "the rich" in the context of who should pay more in tuition/taxes/whatever is "someone better off than me".

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

#202

Post by bzbarsky »

leakybit wrote: post #55
toomuchtodo wrote: post #7

Earlier quoted context omitted.

What if university endowments were used to fund research and implementation into ways to drive down the cost of education to zero?

The internet has already driven the cost of education to zero, what schools are really selling are degrees. Anyways, Yale only spends $170 million on tuition assistance, but in reality ; Yale covers full tuition and housing costs for students who's family income is less than $200,000.

Pray tell me how one can use the internet to get a zero-cost education to prepare one for, say, a career in experimental physics. It turns out that you need some actual hand-on experience with some non-virtual equipment to do a lot of things in the real world...

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

#203

Post by jimbokun »

dangrossman wrote: post #128
jimbokun wrote: post #121

Earlier quoted context omitted.

"I think I should get the full Affordable Care Act subsidy regardless of my income" I appreciate your sentiment, but you realize all of the insurance companies will just raise their rates by the amount of the subsidy, right? More demand in the form of government money earmarked for a specific good, with the same supply of the good, means higher prices.

> you realize... right? Gosh, I really dislike that turn of phrase. Anyway, they can't do that, since the ACA has mandated that insurers spend at least 80 or 85% of premiums on health care costs since 2012. The insurers ride that line as closely as possible, since their profit has to come out of the 15% allowed margin. This means an increase in total premiums without a commensurate increase in the cost of claims cann…

"Gosh, I really dislike that turn of phrase."

Point taken.

Maybe:

"I appreciate your sentiment, but won't that result in insurance companies raising their rates by the amount of the subsidy?"

I think that reads better. Makes the same point, less argumentative.

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

#204

Post by rbcgerard »

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 like that you talked about being "unfair" to rich people and fair to you in one sentence.

So we should encourage people that earn decent money not to save adequately for their children's college education?

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

#205

Post by eli_gottlieb »

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.

If we had a functioning state university system, you could have gone to UMass for basically nothing.

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

#206

Post by altano »

inthewoods wrote: post #126
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…

Even worse, in my opinion, is that these institutions can continue to be considered Not for Profit organizations. Harvard is very interesting in this way - they have so much money in their endowment that they seek all kinds of investment. Real estate is one of their favorites. When they buy property, it can no longer be taxed. This is why the towns surround Cambridge hate when Harvard buys up property. Watertown, in…

Harvard doesn't have to pay tax but Harvard and MIT have made tens of millions of dollars in "voluntary" contributions to the municipalities they reside in over the last decade. The situation is weird but Harvard and MIT give enough money to make property tax in Cambridge dirt cheap. I'm only paying ~0.375% for example.

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

#207

Post by massysett »

jqgatsby wrote: post #112
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…

Sorry, what you call a 'crack in the best system available' is the life I've had to live. I've had to take less societally-beneficial jobs because they paid more, while my loan-free friends were off joining the Peace Corps or teaching. I think the world is made a worse place when people like me are turned into mercenaries. MIT thinks it's okay to boil down someone's financial future into a single dominant number (par…

You take no responsibility for your situation. You talk like MIT just happened to you. You turned yourself into a mercenary by attending MIT and accumulating the debt with full knowledge that you would take high-paying jobs to pay it off-jobs that you could get thanks to your MIT credential.

Once your debt is paid off you will have one less excuse to go do whatever it is you claim you really want to do. The only question is whether you will actually take advantage of that or whether you continue to whine about the world of opportunities that were somehow foisted upon you when you willingly chose to attend MIT.

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

#208

Post by [deleted] »

jqgatsby wrote: post #112
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…

Sorry, what you call a 'crack in the best system available' is the life I've had to live. I've had to take less societally-beneficial jobs because they paid more, while my loan-free friends were off joining the Peace Corps or teaching. I think the world is made a worse place when people like me are turned into mercenaries. MIT thinks it's okay to boil down someone's financial future into a single dominant number (par…

[deleted]

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

#209

Post by rbcgerard »

dbjacobs wrote: post #127
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…

Just to add some fact. According to Yale's financial statement [1], their operating expenses in 2015 was around $3.2 billion. So tuition doesn't come close to covering their operating costs. And it looks like they typically spend around 5% of their endowment (the spending level most foundations target because that is the minimum a foundation must spend to maintain their status). [1] http://finance.yale.edu/sites/defa…

So glad you brought this up as well, it's one of my pet peeves (thinking tuition and expenditures are linked)...this is also pretty scary http://www.bain.com/sustainable-university/interactive.asp

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

#210

Post by [deleted] »

dbjacobs wrote: post #127
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…

Just to add some fact. According to Yale's financial statement [1], their operating expenses in 2015 was around $3.2 billion. So tuition doesn't come close to covering their operating costs. And it looks like they typically spend around 5% of their endowment (the spending level most foundations target because that is the minimum a foundation must spend to maintain their status). [1] http://finance.yale.edu/sites/defa…

[deleted]
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