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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

#231

Post by elsherbini »

alistairSH wrote: post #222
1stop wrote: post #190

Earlier quoted context omitted.

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.

FWIW, the total in-state cost for students at UVA is approaching $28,000/year[1]. U. of Michigan and Georgia Tech are similar. Take out the room/board fees, and you're still looking at $14,000/year just for tuition. So, even going to a top state university isn't going to keep you debt-free. Maybe not $100,000 in debt, but still a significant sum. There is definitely a "donut hole" in terms of aid available to middle-…

I agree with your point that state schools are becoming extremely expensive for many. Georgia Tech (and all Georgia public schools) have the Hope Scholarship[1] for in-state students which pays 90% of your tuition if you meet certain academic requirements. They have the Zell Miller scholarship with higher acadmic requirements for the remaining 10%.

It ends up being very good for lots of people, but the academic requirements, especially for your high school record, do introduce some socioeconomic and racial disparity with the awards.

[1] https://secure.gacollege411.org/Financial_Aid_Planning/HOPE_...

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

#232

Post by alistairSH »

elsherbini wrote: post #231
alistairSH wrote: post #222

Earlier quoted context omitted.

FWIW, the total in-state cost for students at UVA is approaching $28,000/year[1]. U. of Michigan and Georgia Tech are similar. Take out the room/board fees, and you're still looking at $14,000/year just for tuition. So, even going to a top state university isn't going to keep you debt-free. Maybe not $100,000 in debt, but still a significant sum. There is definitely a "donut hole" in terms of aid available to middle-…

I agree with your point that state schools are becoming extremely expensive for many. Georgia Tech (and all Georgia public schools) have the Hope Scholarship[1] for in-state students which pays 90% of your tuition if you meet certain academic requirements. They have the Zell Miller scholarship with higher acadmic requirements for the remaining 10%. It ends up being very good for lots of people, but the academic requi…

Sadly, Virginia doesn't have a state-wide merit program. There are some school-run programs, but the achievement level to qualify is generally very high (Jefferson Scholar program at UVA, for example).

The Hope Scholarship looks REALLY nice - it appears available to any student who graduates with a very achievable GPA (3.0/4.0).

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

#233

Post by chrisbennet »

Ntrails wrote: post #186
hkmurakami wrote: post #172

Earlier quoted context omitted.

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

Who's annoyed?

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

#234

Post by tanker »

vecter wrote: post #136
jqgatsby wrote: post #112

Earlier quoted context omitted.

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…

How could MIT sustainably afford to make tuition free? Genuine question. That's a pretty bold assertion.

That's an interesting problem.

I have a few ideas 1) Replace tuition with taking x% of income for y years following graduation. I'm not sure how this would work in regards to low-income degrees / departments. For example, would the low return on investment for an arts department mean it would get less funding? I suppose this would cause universities to optimize their education for earning potential of graduates. Could have interesting effects. Not all beneficial.

2) Could they use their endowments to essentially provide interest free loans? I'm guessing their would be lots of problems with this that I can't see.

3) You pay nothing while in school, but you pay a straightforward fraction of the school's operating costs for the next x years. I like this concept. If you make x long enough, your graduates have an interest in ensuring future students are able to contribute to the cause. Of course, they also have an interest in keeping costs low. That could create poor dynamics. Improvements would have to come from donations, not be a part of the budget.

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

#235

Post by mathattack »

chrisbennet wrote: post #233
Ntrails wrote: post #186

Earlier quoted context omitted.

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

Who's annoyed?

Mostly their competitors, and perhaps people who would prefer more upscale shopping.

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

#236

Post by mathattack »

Pyxl101 wrote: post #85
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 purpos…

Most endowments spend more than 2% per year. There's a 5% minimum spend for non-university endowments, and there has been pressure for universities to apply this too.

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

#237

Post by jon-wood »

vecter wrote: post #136
jqgatsby wrote: post #112

Earlier quoted context omitted.

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…

How could MIT sustainably afford to make tuition free? Genuine question. That's a pretty bold assertion.

Presumably using the proceeds of the hedge fund they're running on the side.

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

#238

Post by avn2109 »

alexvoda wrote: post #160
akhilcacharya wrote: post #150

Earlier quoted context omitted.

In the case of Yale, it does buy prestige.

It buys prestige within the group that values universities. But that group is shrinking. The more people reach the conclusion that attending these private universities have bad ROI compared to other educational resources the more people will loose trust in them and the less valuable that prestige is.

If this claim were true, the admissions rate at Yale would be rising. In fact it is falling/steady at Yale and most (all) of Yale's peer institutions.

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

#239

Post by rdancer »

estefan wrote: post #189
rdancer wrote: post #176

Earlier quoted context omitted.

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...

After 12 years of primary and secondary school, one would think they'd have gotten some, wouldn't one?

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

#240

Post by vecter »

jon-wood wrote: post #237
vecter wrote: post #136

Earlier quoted context omitted.

How could MIT sustainably afford to make tuition free? Genuine question. That's a pretty bold assertion.

Presumably using the proceeds of the hedge fund they're running on the side.

Have you actually done the math to show this works out in the long run?
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