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With an endowment valued at $36.4 billion, Harvard is far and away the richest educational institution in the world. We receive revenue from a diverse variety of sources—investments, government and private grants, generous donations. In light of the University’s wealth and stated commitment to socioeconomic accessibility, it is somewhat puzzling that Harvard continues to raise undergraduate tuition fees at a rate that outpaces inflation. From both a moral and a financial standpoint, it may be in Harvard’s best interest to abolish undergraduate tuition entirely.
For context, many of the world’s most highly ranked institutions already offer a free or almost-free education. The Technical Institute of Munich, the most prestigious university in Germany, voted to abolish tuition in 2013, opting to charge only a nominal student union fee. France’s École Polytechnique—along with all other public universities in France—offers a similar pay structure for domestic students. In Latin America, too, Brazil’s University of Sao Paulo (the highest ranked university in the region), is free for non-international students. Affordability is directly correlated with prestige, and there is a significant stigma attached to students who must “buy their degrees” because they are unable to earn a place in the top schools.
From an ethical standpoint, going tuition-free would remove an important barrier that stands between low-income students and a top-notch education. While Harvard already promises deep discounts to lower income students, it is often difficult for students to learn about these discounts and navigate the complicated system of financial aid—especially if they are in the first generation of their family to go to college or if they attend high schools with poor college preparation resources.
Overwhelming research suggests that lack of information and difficulties navigating complex financial aid applications dissuade many low-income students from considering schools that have high sticker prices. A recent survey of applicant behavior found that a majority of families rule colleges out based on sticker price alone. Eliminating tuition would remove this barrier and help to even the playing field.
Middle-class families would also see a significant improvement in their financial wellbeing. Harvard currently charges middle-class families “as much as they are able to pay,” which in practice means that most families put about a tenth of their incomes toward educating their children. In many cases, meeting this financial burden requires families to reduce their standard of living significantly while their children are in college, and in some cases delay retirement. From an economic perspective, financial aid incentivizes parents to avoid career moves that would increase their income bracket and thus expose them to paying higher prices. Abolishing tuition would thus increase social mobility and prosperity for low- and middle-income families.
The most obvious argument against abolishing tuition at Harvard is a financial one. If we eliminate this source of revenue, how will we maintain high quality? Fortunately, data from the University’s most recent report suggests that—all other factors held equal—eliminating undergraduate tuition would have a minimal effect on the school’s wealth. According to last year’s financial report, Harvard collected $270 million from undergraduates while its net assets reached $38.6 billion. Phrased differently, last year’s undergraduate tuition increased the school’s total wealth by less than 1 percent. Even compared to the school’s yearly operating expenses of 4.2 billion, tuition fees only cover about 6 percent. Considering the school’s vast resources, it could easily abolish tuition fees. With the endowment’s current growth rate at more than 15 percent, the value lost by eliminating tuition would be recouped within just a few months.
In the long run, abolishing tuition may actually lead to increased revenues in the form of alumni donations. While Harvard and other Ivy League schools have consistently enjoyed better than average alumni participation, Harvard's alumni giving participation rate has significantly declined over the past decade from a peak of 48 percent in 2001 to 36 percent according to this years' U.S. News and World Report. It may be that alumni are choosing to abstain because of the high cost of college. After shelling out up to $50,000 for their degrees, many alumni are loath to give even more money to their alma maters, especially when they graduated from schools that are already perceived as rich. Removing tuition would strengthen alumni connections to the school, and motivate graduates to pay back the school’s generosity once their careers were established. Thus, while it would result in a minor decline in immediate revenues, abolishing tuition could result in greater returns over time.
A tuition-free Harvard would be a far more welcoming place to all students and especially to students from low-income backgrounds. By treating its students as an investment rather than a revenue source, Harvard would see greater alumni loyalty and support and greater returns in the long run. Most importantly, abolishing tuition would help to weaken Harvard’s reputation as the preserve of the wealthy and well connected and build its credentials as a place that values merit and hard work over wealth. It would put the University in a league of its own among Ivy League schools and put pressure on other wealthy schools to follow suit.
Taonga R. Leslie ’15, a Crimson editorial comper, is a sociology concentrator in Winthrop House.
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