Harvard's new aid plan

[jtwcornell91]

[quote Robb][quote Chris '03]No way they could match Harvard and Yale obviously but it's something:
http://cornellsun.com/node/26757

I'm not sure I'm in love with the idea of capping loans for families making 120k and under and passing that loss on to families making more with more tuition hikes. Seems like fuzzy math.[/quote]

It's not fuzzy math.  It's welfare, pure and simple.  You can debate the merits or lack thereof of such policies, but call a spade a spade.[/quote]

Yep,  Ironically, our expensive private universities end up providing progressive pricing with a de facto sliding scale of tuition actually paid.  Personally, I don't have a problem with students fortunate enough to be born into wealthy families underwriting those of more limited means.  It aids socioeconomic mobility and is IMO preferable to a system where only the aristocracy can afford higher education.

[heykb]

As one whose annual parental tuition contribution topped out at about $100, I applaud this move. It does take years to pay off loans and having them capped makes it possible for financially needy students to work off their educations in a reasonable time.

Even with a Regents scholarship, federal grants and maxed out on loans, I still needed a healthy chunk of Cornell scholarship money to handle my 4 years' costs. I think CU is doing a very good thing.

Hail, all hail, Cornell.

Karl '77

[mnagowski]

[quote Chris '03]No way they could match Harvard and Yale obviously but it's something: http://cornellsun.com/node/26757[/quote]

Hopefully this will help athletic recruiting as well. Maybe not so much against HYP, but certainly against Brown, Dartmouth, and Penn.

[Jim Hyla]

[quote Robb][quote Chris '03]No way they could match Harvard and Yale obviously but it's something:
http://cornellsun.com/node/26757

I'm not sure I'm in love with the idea of capping loans for families making 120k and under and passing that loss on to families making more with more tuition hikes. Seems like fuzzy math.[/quote]

It's not fuzzy math.  It's welfare, pure and simple.  You can debate the merits or lack thereof of such policies, but call a spade a spade.[/quote]

And you could say that farming out production of my iPod to China or wherever, is a form of welfare for me. I get to spend "my hard earned money" on what I want, without regard of whether some slob here doesn't have a job producing it. Welfare comes in all shapes and sizes. If you really want to lay out all the different perks different groups get we'd be here till the end of time. It's just that when they go to help someone less fortunate we have to start calling it welfare. At least some people do acknowledge "corporate welfare".

[Rosey]

And you could say that farming out production of my iPod to China or wherever, is a form of welfare for me.

Not by the accepted understanding of "welfare," which is wealth transfer paid for through coercion, e.g., taxation or tariffs.

As you indicated, you have every right to (indirectly) pay your money to the slobs in China to produce your iPod rather than to the slobs in the US, and given the reality of wages for low-skill jobs, Apple wouldn't do much business if its products were 100% made in America.

Helping the less fortunate isn't what makes it welfare.  Forcing Peter to (indirectly) pay Paul, outside of the agreed terms of a voluntary exchange, is welfare.  This is why corporate welfare is also rightly-named, because you don't have much choice but to pay it.  (Or move to Cameroon, as I'm sure Charles will suggest.)

And, FWIW, Cornell has every right to charge what it wants to each individual, and they are free not to pay it if they don't wish to.  Therefore, it's not welfare either: there's no coercion involved, as people are free to choose institutions of higher education that don't offer financial aid.  (I'm of course factoring out the grant money that comes to Cornell from taxes, but that just muddies things unnecessarily.)

Kyle

[mnagowski]

[quote krose]Not by the accepted understanding of "welfare," which is wealth transfer paid for through coercion, e.g., taxation or tariffs.[/quote]

That's not my accepted understanding of welfare.

Welfare transfers do not have to be through explicit "coercion". Consider a child who grows up next to a polluting factory and suffers from asthma for the rest of her life. She never voluntarily agreed to incur expensive health problems to benefit the factory's shareholders. As such, she will have incurred a negative wealth transfer.

Taking these thoughts to an extreme argument that I wouldn't necessarily agree with, one could even speculate that Cornell's new financial aid policies amount to further corporate welfare. Wealthy individuals (Cornell's trustees) entice high aptitude, lower-income students to attend their institution under the guise of discounted tuition, and in doing so, educate and indoctrinate these students to be keen, intelligent, and productive entities in their military-industrial machinery, acting against what some people may consider to be their own inherent class interests.

(And whoever said taxes or tariffs were coercion to begin with? You're certainly free to move to other states or countries of the world if you feel that their tax policies, political culture, and economic climate are more suitable to your desired ends.)

[KeithK]

[quote metaezra](And whoever said taxes or tariffs were coercion to begin with? You're certainly free to move to other states or countries of the world if you feel that their tax policies, political culture, and economic climate are more suitable to your desired ends.)[/quote]
Oh come on.  Of course taxes involve coercion.  The government collects money from citizens backed by the threat of force.  That's coercion.  Now, it's a type of coercion that most people have implicitly accepted (at least the fact of it if not the amounts) because it's part of the social contract of government.  But don't pretend that paying taxes isn't something that you are forced to do.

[ugarte]

[quote krose]

And you could say that farming out production of my iPod to China or wherever, is a form of welfare for me.

Not by the accepted understanding of "welfare," which is wealth transfer paid for through coercion, e.g., taxation or tariffs.

As you indicated, you have every right to (indirectly) pay your money to the slobs in China to produce your iPod rather than to the slobs in the US, and given the reality of wages for low-skill jobs, Apple wouldn't do much business if its products were 100% made in America.

Helping the less fortunate isn't what makes it welfare.  Forcing Peter to (indirectly) pay Paul, outside of the agreed terms of a voluntary exchange, is welfare.  This is why corporate welfare is also rightly-named, because you don't have much choice but to pay it.  (Or move to Cameroon, as I'm sure Charles will suggest.)

And, FWIW, Cornell has every right to charge what it wants to each individual, and they are free not to pay it if they don't wish to.  Therefore, it's not welfare either: there's no coercion involved, as people are free to choose institutions of higher education that don't offer financial aid.  (I'm of course factoring out the grant money that comes to Cornell from taxes, but that just muddies things unnecessarily.)[/quote]
WHY DON'T YOU MOVE TO CAMEROON!

[Jeff Hopkins '82]

[quote ugarte][quote krose]

And you could say that farming out production of my iPod to China or wherever, is a form of welfare for me.

Not by the accepted understanding of "welfare," which is wealth transfer paid for through coercion, e.g., taxation or tariffs.

As you indicated, you have every right to (indirectly) pay your money to the slobs in China to produce your iPod rather than to the slobs in the US, and given the reality of wages for low-skill jobs, Apple wouldn't do much business if its products were 100% made in America.

Helping the less fortunate isn't what makes it welfare.  Forcing Peter to (indirectly) pay Paul, outside of the agreed terms of a voluntary exchange, is welfare.  This is why corporate welfare is also rightly-named, because you don't have much choice but to pay it.  (Or move to Cameroon, as I'm sure Charles will suggest.)

And, FWIW, Cornell has every right to charge what it wants to each individual, and they are free not to pay it if they don't wish to.  Therefore, it's not welfare either: there's no coercion involved, as people are free to choose institutions of higher education that don't offer financial aid.  (I'm of course factoring out the grant money that comes to Cornell from taxes, but that just muddies things unnecessarily.)[/quote]
WHY DON'T YOU MOVE TO CAMEROON![/quote]

Because it's already full of Chadian refugees.  They're driving down the property values!  ::smashfreak::

[Scersk '97]

This seemed like the best place to ask the question, even through the thread contains my dithering on up above to no great purpose.

What kind of campaign would it take for Cornell to offer the kind of programs that the other Ivies are offering?  What about free tuition?  Are these pie-in-the-sky numbers or achievable goals (if not by the current alumni, then by future generations)?

[Robb]

Brown is on the bus...

[David Harding]

[quote Scersk '97]This seemed like the best place to ask the question, even through the thread contains my dithering on up above to no great purpose.

What kind of campaign would it take for Cornell to offer the kind of programs that the other Ivies are offering?  What about free tuition?  Are these pie-in-the-sky numbers or achievable goals (if not by the current alumni, then by future generations)?[/quote]Let's take some rough numbers aiming for an estimate within a factor of two.  I'll let someone with more financial acumen refine the calculation.  

Cornell aims for an on-campus undergraduate population of 13,000. http://www.dpb.cornell.edu/documents/1000397.pdf  Let's call the average undergraduate tuition $30,000, assuming 15-20% of undergraduates pay in-state, statutory college rates.  http://www.news.cornell.edu/stories/Jan08/tuition08-09.html
So, we need $390 million per year to pay all undergraduate tuition.  Add another $12,000 per year for room, board, and mandatory fees.  Now we're up to $546 million per year.  
Last year Cornell seems to have spent about $69 million on direct grants to undergraduates.  http://www.dpb.cornell.edu/documents/1000396.pdf (page 21)
So, we need another $477 million per year in income.
I've left out external sources of financial aid.  But I also think that the 13,000 leaves out about 500 students studying abroad each year.  http://www.cuabroad.cornell.edu/parents/index.asp

How conservative do you want to be with your endowment, remembering that as investment manager or trustee you have a fiduciary duty to the institution and its long-term health?  Suppose educational costs rise a little bit faster than inflation because you run a labor-intensive operation where increasing worker productivity by increasing class size is not a competitive option.  Your investments have to cover both the inflationary growth in costs and the income they are supposed to be generating.  Let's say you can beat general inflation by 5% in the long haul, but are only willing to spend 4% of your income as you try to ensure that you keep up with your costs.  In round numbers, we need another $12 billion in the endowment.  
For reference, the current major fund drive is aiming for $4 billion over five years or so, some of which is targeted to undergraduate financial aid.  We have along way to go before we can offer free tuition to everyone.

I think that the fuzziest number here is assumption of spending at the rate of 4% the endowment each year.

[mttgrmm]

everyone probably already saw it, but in case you didn't, brown got in on the action too:

http://www.nytimes.com/2008/02/25/education/25brown.html?ex=1361682000&en=7deef454519f17ae&ei=5088&partner=rssnyt&emc=rss

[mnagowski]

Last year Cornell spent around $115 million on undergraduate aid... around $40 million from the endowment and dedicated gifts and another $70 million (this is the $69 million Harding refers to) in "general fund" expenses (read: from other student's tuition dollars).

The math here is a little fuzzy, but hear me out:

I think to reach a Harvard or Princeton no tuition policy, Cornell would need to spend another $50-$75 million or so on financial aid. Basically, right now Cornell is spending around $10,000 a student, whereas the more generous schools are spending over $15,000 a student. The thing that clouds this number is you really have no idea about the distribution of family incomes at the different schools, except we know in the general sense that Cornell tends to educate more lower income and middle income students than the other Ivies. The data is just not publicly available.

So my back of the envelope calculation would be that Cornell would need at least an additional $1 billion endowment strictly dedicated to financial aid (assuming a 5% payout) to pay the extra $50 million a year in financial aid.

I have written a lot more about this on my blog: www.metaezra.com

[Jim Hyla]

[quote metaezra] The thing that clouds this number is you really have no idea about the distribution of family incomes at the different schools, except we know in the general sense that Cornell tends to educate more lower income and middle income students than the other Ivies. The data is just not publicly available.[/quote]

There is some data. Although not giving all the specific data, this recent article in the Syracuse Post-Standard quotes Simeon Moss, press officer director at CU, as saying CU has the second highest percentage, 14.1%, of Pell Grants in the Ivy League. The part about Pell Grants is at the end of the article.