Dean and Fred - Ivy league schools are expensive because they can be.
So is Villanova at 56k/yr. So is Duke at 60k/yr etc. From the outside, it looks like collusion. And they all compete for the best students. Even charging 56k/yr, they have far more applicants than open spots. But look at the numbers Merlin linked to; even today, tuition is not a major source of their revenue. Princeton has eliminated loans as part of the financial aid mix; if someone qualifies for financial aid, they get a grant, period. At Princeton, nobody graduates with -any- debt today, even though tuition and costs are over ten times what they were in the 70s...
Because the Ivies endowments relative to the size of their undergraduate classes are enormous, they could easily -- trivially -- afford to compete for the best students using tuition free awards; this -should- have the impact of putting competitive stress on other schools in the market to keep tuition low. When a year at Villanova is 56K and a year at PU is 56k then Villanova is not having to compete on price. So what fixes the costs at the Ivies and Villanova at 56k/yr? (Clearly, what the market will bear, it is that important to folks.)
Costs are not serving as a means of rationing access to a limited number of seats; even in the 70s, the Ivies had a policy of meeting financial aid, though the mix included loans back then. It's been many decades -- I'm not even sure when -- since admission to the Ivies was limited by ability to pay the price of admission. So it begs the question, in the context of the entire marketplace: without collusion as the explanation, what is the economic reason that maintains tuition costs at the Ivies?
Yale Endowment, with about 5400 undergrads: about 20 billion.
Princeton Endowment, with about 5300 or so undergrads: about 18 billion.
Harvard Endowmenr, with about 7200 undergrads: about 32 billion.
Brown Endowment, with about 6100 undergrads: about 2.9 billion(damned slackers...)
Villanova Endowment, with about 6500 undergrads: about 450 million.
Duke Endowment: a little confusing, because it is split into two distinct parts. One part was literally created by one man, with Duke University being one of several beneficiaries of that fund, including, other colleges, but that fund started out with 40 million in 1924 and today has assets of a little over 3 billion. So Duke U. is the beneficiary of abiut 1/3 of that 3B today, plus another 6B, so about 7 billion, and about 6500 undergrads..
Penn State, with 40,000 undergrads: about 1.93 billion. A year at Penn State: $33,000 (In State/Main Campus) $46,000 (out of state/main campus)
MIT, with 4400 undergrads: about 11 billion. A year at MIT: $59,020
UVA, with 14,600 undergrads: about 5 billion. A year at UVA: in state: $26,000. out of state: $50,000
Clearly, some of those schools -could be- offering tuition free scholarships, some could not. But doing so by any of them would put a drag on cost increases. Instead, while their endowments grow unbounded to rival the wealth of some small countries, policy wonks from these same insititutions angst about the crisis of high costs in education, rising student debt, and so on.
What species does this to their young? Youthful massive debt is being encouraged at the same time that these endowments are bloated beyond belief. Towards what end?
Some debt? Fine. Folks should have some skin in their own game. But it should scale in some reasonable manner to their economic opportunities, and with todays economies, it sure doesn't seem to.
I left school in the late 70s with maybe 5K in debt, paid it off in a couple years, wasn't a substantial burden when I was young. Today, that would could easily be $100K. That is just f'n nuts. Who does this to their young? Towards what economic end or benefit to anybody? The trustees of those endowments? "Hey, look at our bottom line grow on those glossy annual reports!"
Education, as a business, is not like any other economic activity; it is one of those odd cases of human endeavor that -can- be more than 100% Pareto efficient. The more that is taken, the easier for all. Life for everyone in our economies is improved, the more our population is educated. Not just those educated, but those who don't end up dealing with the drag us all down deficiencies of the under-educated. An educated populace creates intelligent demand for intelligent opportunities, and as well, broad opportunities. A non-educated populace creates narrrow opportunities to sell massive amounts of swill to slugs.
Imagine you are a decision maker at one of these schools. There is money pouring over the transome by the bucket full from your 18 billion dollar endowment. You are nominally charging 260 million/yr in tuition costs, but actually realizing only about 100m/yr because you are already handing out grants. That 100 million/yr in revenue is starting to look like a rounding error. You have a choice with that last $100m of endowment revenue; you can eliminate tuition/room/board totally, and announce 'free admission if you are accepted' or, you can build another student center/workout center. A really nice one, much nicer than the one you built two years ago. By so doing, you can trigger the same in all the other Ivies and other schools that can afford it. You will also inhibit tuition/cost hikes in the schools that can't afford it.
Is that unfair competition? Is that why students must take on $100k+ of debt for their entry level jobs in our economies?