Small businesses are allegedly the backbone of America, and I feel these tuition support programs overlook this segment of the middle-class.
You can't have it be 'insignificant' salary but you can do plenty of fringe benefits or long term profiteering via acquisition as mentioned.
I will say, ironically, the small business owners like that were great to work for, although they were paranoid, they were often generous to employees.
OTOH, at the computer shop there was a standing rule that if the CPA brought his computer in it was 100% priority and we treated him better than the one org that was 10-30% (depending on year) of our entire gross income...
EDIT: To be clear, it's complicated, https://news.ycombinator.com/item?id=42199534 is a good explanation of where I sit overall.
For every type of business entity other than an S corp or an LLC electing to be taxed as one, the IRS either doesn't care about any notion of reasonable salary or - in the case of a C corp or an LLC electing to be taxed as one - actually wants it to be as low as possible (whereas the owner wants to maximize it).
That still seems like heavy handed overreach to me. Should they not instead contact you for clarifications about the ambiguity?
How many times were you audited before learning this valuable lesson?
You hear a lot of anecdotes both ways and it is quite hard to get a good picture of the real situation.
All business funds are re-invested without tax, this is actually a good thing. Also for the majority of business owners taking a loan against your assets to pay yourself is a terrible idea, yes it may defer taxation but that tax will still come due and now you have to pay interest.
> Someone who owns their own business could also easily drop their salary significantly for the year prior to applying to college.
This could be a problem but i think the amount of difference this would make would be negligible - most people don't plan like this. You could also emancipate your 17 year old or have them live independently for a period of time (my friend actually deferred his entry and worked for a year in order to get a full ride)
This is a pretty naive take. It is a $85k per year cost. If you can shift some money around and avoid $85k per year, you would absolutely do that.
> you could also emancipate your 17 year old.
This is complicated. Emancipation is not a “sign a form” kind of thing. The kid would have to be living completely independently (no support from the parents) and would have to convince a judge that they need to have rights and responsibilities otherwise given to adults. “Because the parents don’t want to pay for school” isn’t really a valid reason.
I dont think this was an oversight or mistake. I think the expectation was that yes, people should sell assets if they have them .
I think the idea is that Yes, the expectation is for people to make actual sacrifice before they qualify.
It’s an all or nothing thing. The business needs all its assets to function, and shouldn’t be considered any more than for its income potential.
It's not equivalent to making all your income off one rental and having to sell it, but it is closer to that. If you sell it, you have no income now. But a small business also creates jobs and provides novel value to the community, so even more is lost than just a single income.
If the business is worth enough then selling it can replace all the income you would have ever gotten from it. It's not as simple as "income goes away". The specific numbers make all the difference.
Normal US tax law that most people fall under says no, stock itself is not income. It's only taxed at the time of sale. If you ask for mark to market taxing then any increase in market value during the calendar year will count as income -- even if you didn't sell anything throughout the year. But usually those people are drawing a direct income from trading.
For someone not in your system, the expectations that seem normal to you sound absolutely insane to others.
Anyway no, they should not cut their kidneys out and sell them.
Education costs are out of control, but you can still get a degree elsewhere for 10% the MIT cost, and have it paid for entirely by the government if you are low income
Is it a small business netting the owner 100K a year with 500K in the bank?
That's different than a small business netting the owner 75K a year but the trucks and equipment for the landscaping business (easiest example, replace as needed) being worth 200K...
It's complicated.
Nor would they expect you to take a line of credit against the equity in property if you owned any, but stocks are always a rich person luxury that you can sell!
Kinda cemented that we’re rewarding a failure to save and rewarding a failure to save in something liquid.
That's the only fair way. Also, a set of well educated people pays itself back later in the form of mostly income and added value taxes, which provides money to keep studying for cheap for the next generation.
College in the US would be a lot cheaper if the government didn't inflate it. If you go back in time just a few decades, this is how it was: you paid for it, either in cash or with a PRIVATE loan, and people didn't see college as an automatic requirement. Then it was 1/10th as expensive.
We could do this in the USA also, or perhaps even bother with online universities, except those are generally considered not very useful as degrees.
I've had to submit weekly sheets that were graded in almost all courses and these qualify for the final exam (in STEM). There were two exercise groups with competent ta to ask questions..
What's missing is some kind of Disneyland experience, student unions also exist to some degree but it's more low key.
Not saying that German university is better or worse - I'm convinced it has it's own problems that only will get worse if nothing is changing but it's not like it's subpar and you are alone with your book.
This isn't due to staff shortages, it's more of a difference in tradition/philosophy of teaching
What timeframe are you looking at?
Back in 2011, registration fees at UC Berkeley were $7,230 per semester, with $813 allotted to health insurance (which could be waived if you provided proof of existing insurance from your family), so $6,417 ignoring health insurance. Meanwhile, last year, registration fees were an eye-popping $9,847 for new students, but cost of health insurance grew much faster to $1,929 ($7,918 ignoring health insurance). This is about a 23% increase, compared to CPI-measured inflation of about 35% between Sep 2011 and Sep 2023.
(The next biggest driver of the overall increase was the campus fee, which went from $253 to $820.)
Or, if you look at just tuition alone, that went from $5610 to $6261, or just barely above 10%.
https://registrar.berkeley.edu/wp-content/uploads/2021/03/Fe...
https://registrar.berkeley.edu/wp-content/uploads/fee_schedu...
If you look further back, in 1999, tuition was a mere $1543, but I posit that tuition at UCs has actually been fairly stable over the past decade.
I don't disagree, but they support my point that tuition has not changed meaningfully in the past decade (and then some), which is why I asked what timeframe you were looking at.
Inflation is perhaps not a good point of reference anyways, since in 2009, inflation per CPI was actually slightly negative. Cost of borrowing is not the same as cost of goods and services or cost of labor, for reasons such as the ones you point out (changes to banking regulations, increased risk aversion, etc).
Although, I'm a little surprised that cost of borrowing would have been much higher, seeing as that was the start of the zero interest-rate policy in the US. The average 30-year fixed mortgage rate was hovering around 6-7% pre-crisis and 4-5% in the years immediately following it.
...if you go back in time a few decades basically everything was about 1/10th as expensive.
e.g. "Adjusted for inflation, $1.00 in 1960 is equal to $10.43 in 2024" according to https://www.dollartimes.com/inflation/inflation.php?amount=1...
High cost and exclusivity is the entire point.
A university open to all with a fraction of the price would be a poorly ranked one in every competitive measure.
I like to call this "resort-style education".
I don't want to say Europe is without problems, but I think this kind of legislation, together with social security in general, is a clear example of how it can be handled more efficient and fair for most people.
My understanding is that most universities in Europe look more like US bare bones commuter schools, opposed to an all inclusive recreational experience.
The top ranked university in Europe is Oxford, which educates more than twice as many students as MIT with half the budget. I doubt this is because Oxford is cutting corners on educational curriculum.
Most other British and EU universities suffer from the same issues. For more information, see this article at The Guardian, which generated lots of debate: https://www.theguardian.com/higher-education-network/2015/no.... In a nutshell the article states that "[...] I no longer believe that early-career positions at Oxbridge universities are viable for individuals without independent financial means." Also "[...] the median non-professorial academic salary at Oxbridge is £45,000."
Maybe, maybe not. It could just be from cost-of-living differences: salaries for many jobs (particularly highly-educated ones) pay a fraction outside the US what they do inside the US. How much are Oxford professors and staff getting paid compared to the ones at MIT (which is Boston, which is a very high cost-of-living city for the US)?
> According to ZipRecruiter, the average salary for a professor at MIT is $114,792 per year, with a range of $94,500 to $179,500.
> A professor's salary at the University of Oxford can range from around £89,429 to £122,261 per year, with an average of £104,347
Perhaps high professor and admin salaries in the US are a problem with US education.
This is exactly my point. And not just professor and admin salaries, the salaries and costs for everything.
It's not about "cutting corners", it's that if you compare the cost of something in the US to something in another country, the US usually is much more expensive; this doesn't mean the other country is cutting corners, it means the US is just too damn expensive.
> MIT is a huge outlier in terms of R&D
Also, it’s not exactly what I would call open enrolment as it’s only open to Swiss students who are accepted into and pass a Matura program or similar in grade school while other students typically require applications or minimum exam scores depending on the program.
I'll go out on a limb and bet people in your country earn much less than the average American, too. Why? Why don't companies just pay these people more? IT all comes back in income and value added taxes.
> We can have kids without fear of not being able to pay kindergarten.
Also: In Belgium, can you really go to the dentist 20 times? Is there any good reason to allow this in a public healthcare system? If the barrier to entry for healthcare services is very low, then there must be (1) a lot of abuse... or (2) long waiting times... or (3) very high taxes. My guess in Belgium: A combination of (2) and (3).
I work in Massachusetts, but I live in New Hampshire. I pay more than double this on both Social Security fees & Massachusetts income taxes, which are non-deductible since New Hampshire has no income tax and makes up for that with higher property taxes (housing is cheaper though). Filtered to just health related services I can easily identify, in total I pay for Social Security, Medicare, and indirectly Massachusett's state healthcare (which I can only gain access to under limited conditions). Of these, only the private insurance fee directly benefits me, and I have little faith social security will actually pay out when I reach the qualifying age.
In terms of investment my HSA, and 401k are a much better dollar for dollar investment for my future finances than any government service, so I find it extremely unlikely I would ever truly benefit from public healthcare.
Despite my tone here, I'm more annoyed than upset about this. Due to the overall societal benefit, I'm not entirely against public healthcare depending on the details, I'm just under no illusion that it would be to my benefit, and I'm not much of an outlier. I'm also mostly convinced the root issue here is the inflated cost of healthcare rather than just the insurance aspect, public healthcare naively implemented would likely turn into yet another government subsidy for hospitals to devour imo.
One of Ronald Reagan's campaign promises was dismantling or breaking the department of education, similar to what he had done to California's state universities by limiting their budgets and moving the burden of tuition to students.
At the time this was quite popular as it lowered taxes.
american universities get closer to this ideal than you might expect. the days of outrageous student debt are thankfully fading away, at least for undergraduate degrees.
it would make more sense to do this redistribution through taxes if possible, but many US institutions are private so that doesn’t really work. so the colleges basically have their own privately-run means testing programs, and like all such programs there are flaws and loopholes.
this is partly true. it is cheap / free for very low income -- if you qualify for a Pell grant you can usually get additional financial aid from your state university that can bring your cost down to zero.
But if you are above the low income line, but by no means wealthy -- so if you're a household making say $100K a year, then college is extremely expensive and unaffordable especially if you have several kids. You're not poor enough to qualify for substantial financial aid, and you're not wealthy enough to afford tuition. Yeah, your kid can get into Harvard or Stanford for free, but the chances of them being accepted are vanishingly small no matter how smart they are.
The saving grace is community college -- enroll at the local CC for 2 years and then transfer to the state school.
The money for funding public and quasi-private (universities and hospitals) institutions has to come from somewhere. Making it equally affordable for everybody doesn't raise enough money to maintain operations. Same for funding the government.
Granted, I think all of those institutions are due for reforms, which have little chance of happening right now, but still, I think the basic funding equation can't be eliminated.
That's what taxes are for: you take proportionally more from people with more assets. I find the entire conversation about "not wanting my tax dollars to pay for some millionaire's kids' education", because those millionaires would end up paying the difference in taxes (under a fair system) than they do now.
That's without even considering the perverse incentives at play when a wealthy parent can use the payment or withholding of payment for education as a way to control their kids. Just because a parent is wealthy it doesn't necessarily mean that the kid would have access to those funds, or that explicit or implicit requirements that could be imposed to access those funds would be reasonable.
> the ideal is that college should be very expensive for rich people and cheap, free, or at least more affordable, for less wealthy people.
Dunno where you got this "ideal".
the days of outrageous student debt are thankfully fading away
..."fading away", to the tune of (at last glance ) one and three quarters of a trillion dollars in outstanding student loan debt.
it would make more sense to do this redistribution through taxes if possible
The ability of US higher ed to raise tuition prices will always overwhelm the ability of US taxpayers to meet those prices. The phrase "utility monster" comes to mind.
but many US institutions are private so that doesn’t really work.
Private, in the sense that nobody who answers to someone who must win an election is directly in charge of running them, but, who operate as charities for the purpose of donations, pay no taxes on either capital gains or real estate, and are permitted to act as government contractors skimming up to 85% of grant money they're tasked with administrating.
so the colleges basically have their own privately-run means testing programs, and like all such programs there are flaws and loopholes.
The flaw being that...the school is allowed to have total knowledge of a customer's ability to pay before it chooses to do business with them. Imagine if you had to give three years of your tax returns to the person you were trying to buy a house from.
The expensive schools are for the richest people to say they went to school next to the best students who get in free.And for the best students to meet rich people.
Just looked up our main state schools and cost of attendance is $31K - $35K for in-state residents. So that's $120K - $140K for 4 years (not counting increases). And these aren't top-100 schools either.
If you're there on a need-based scholarship, you need both kinds, but neither of them need you.
Sorry for my ranting, I just cannot believe what is still happening.
As for amenities, back in Europe, many universities don't even have a campus, just a scattering of buildings all around the city, acquired randomly as the school grew (that includes dorm buildings, often quite far from one another). You will spend some extra time commuting among them, but the university saves money - and, indirectly, you too.
Getting from dorm to lectures usually took me about 30 minutes each way - on foot, then subway, then on foot again.
Specifically, what percent of the business would have to be sold off? My reaction is very different for 5% versus 50%.
s1artibartfast below is saying that it seems intentional. But how can someone with a small business sell the assets, eliminating their own income in the process, and provide for the remaining children/themselves/etc? Sacrifice is one thing; killing the job you created is another and far too short-sighted.
That's a "happy accident". The college educated bureaucrats who joined hands with academia to create these programs were perfectly fine omitting the plumber's children. They sure weren't gonna do a huge amount of work to find away to avoid an edge case they were ok with.
Tuition for undergraduate studies should be affordable. Not for a small number of very rich universities that can afford it. But to all universities, as it is in most of the world.
That is prove the kids are really responsible.
The free cash he has, the house he lives in, the lifestyle he can afford is on par with "normal" white collar professionals (i.e. not people who get a bajillion monopoly bucks to implement linked list traversals for faang). He works 60hr weeks during construction season and has government agencies up his ass regularly (MHSA regulates him like he's running a pit mine, it's a huge f-ing farce). If you don't place insane value on being your own boss it's kind of a shitty life.
Not as much of a farce as getting silicosis and dying at 50 because your idiot gravel pit boss refuses to maintain a sprinkler system.
Having literally millions of dollars in productive assets is rich by any reasonable standard.
> The free cash he has, the house he lives in, the lifestyle he can afford is on par with "normal" white collar professionals
And he has decades of support at that level of wealth in and realizable from the assets. Choosing to use it to generate a a “normal white collar professional” (i.e., reasonably well off to start with) income doesn't change that it is an enormous store of value that he owns.
That you don't envy his current lifestyle doesn't mean he's not rich.
Yes, students who's parents have money but choose not to spend it get a rough deal. You can make a pretty strong case that it is their parents screwing them over, not the school. The school doesn't owe a discount to prospective students.
No you can't. The school is the one choosing to set their prices based on the parents, who might or might not have anything to do with the student's school budget. That is the school's faulty assumption, and they, not the parents, are the ones screwing over those students.
I dont see how that follows at all. They spend more on students than they receive in tuition funds. Who would they be scamming? What if they offered a million dollar education? I still dont see how that would impact their non-profit status.
What if I said: the price is the same for everyone, but people with less access to money get proportionally more assistance paying that price?
If by “price” you mean, “net price after available subsidies”, then, yeah: healthcare, housing, and food, among others.
The difference is that the subsidies are usually public, whereas the education subsidies are by the seller—but the seller is also a 501(c)(3) nonprofit, the entire premise of which, and the reason donations to them are tax deductible to the donor on top of the nonprofit being tax exempt, is that the nonprofit functions serves social needs in lieu of the government doing so.
Those examples are varied and are not the same thing as purchasing a concrete product, yet I believe they are relevant to your question - education is a service that supports society, not a concrete product for your personal use and enjoyment. How and if you get it, relies not entirely on you at that point in your life, but heavily on your parents and in general on your family as a single economic unit to which you belong.
So they were rich enough that he didn't get exempt from tuition but still could only send one kid to an elite school?
I wonder if the guy was just pulling your leg.
https://www.goacta.org/wp-content/uploads/2021/08/The-Cost-o...
I feel like the timing is too close to be a coincidence—does anyone know if there's a link?
UPenn is THE most obvious. Sitting on a $20,000,000,000 endowment fund that went up +170% over 10 years while Philadelphia rots with drug use, poverty, and gun violence.
BTW, amazing site to be horrified by gun violence (and vaguely fascinated). Look upon the awfulness of Philadelphia. [2] Sitting in their safe little haven while East and South is wounding murder land with overlapping murder / wounding statistics. (12k from 2014-2023, 190/100000 urban) [3] Northwestern and the violence everywhere South in Chi-town is maybe a personal second choice. ($13,700,000,000, +74%, 26.9k, 280/100000 urban) [4][5]
[1] https://en.wikipedia.org/wiki/List_of_colleges_and_universit...
[2] (Guns, Philadelphia) https://www.thetrace.org/2023/02/gun-violence-map-america-sh...
[3] (Location, UPenn) https://www.google.com/maps/place/University+of+Pennsylvania...
[4] (Guns, Chicago) https://www.thetrace.org/2023/02/gun-violence-map-america-sh...
[5] (Location, Northwestern) https://www.google.com/maps/place/Northwestern+University/@4...
Also Northwestern is in Evanston, not Chicago. Two different cities.
Why is it UPENN's responsibility to solve these issues? This is Philadelphia's problem, the university is just a business operating in the city.
American Universities, historically, are supposed to improve not just their students’ lives but also society as a whole, especially as serving as boosters for the city they’re in and their immediate neighbors. That’s why they’re nonprofits. That’s also likely their strongest lifeline to remain relevant in the future rather than as the hollow alumni clubs and gatekeepers their critics say they are, with AI/the internet/online schooling/topic of the day breaking down socioeconomic barriers to knowledge access
That’s why the Carnegies and Mellons built libraries, museums, and the very literally named Carnegie-Mellon university, back then. Now it seems like the first thing billionaires today do is isolate themselves and their wealth from the masses as much as possible.
Historically speaking, wealth accumulation was borderline impossible because the incentive to steal it was so large. You had to become a king, and then constantly murder people trying to take the throne, because everyone had the attitude that the only way to acquire wealth was to steal it from others. And that never really worked out well since the king was always threatened by death (the Sword of Damocles).
This stopped when the upper classes realized it was cheaper and more effective to raise the living standard of everyone else than it is to prevent everyone else from stealing their wealth. When you create wealth, you share some of it with others.
In other words, create a society where everyone has salt and pepper, rather than try to hoard salt/pepper for financial gain.
That's true of schooling as well. In the Middle Ages, only the rich and powerful could read and write. Now that everyone knows how to read, Facebook has a trillion-dollar business selling words.
This mentality is present in FOSS to some extent, but it isn't present for education anymore. Everyone seems to think good universities are a perpetually limited good, so we fight over limited admissions spots rather than figure out a way to deliver high quality education to the masses.
It's stupid, because bumping up the difficulty is how we make education worthwhile.
There’s a bit more to it than that. There’s a reason Xi Jinping doesn’t need to murder members of his cabinet all the time. A stable government has a winning coalition which keeps the leader in power. The leader has to keep them happy which in small enough governments he can do by paying them directly.
In a democracy, the winning coalition is way too large to simply pay supporters. The government has to fund public works which are more cost effective. A larger winning coalition is better for the median person for this reason.
The University of Pennsylvania is one of the nine colonial colleges founded before the United States existed. It predates land grant institutions by over a century. I think you are confusing it with Pennsylvania State University, which is a land grant institution.
It isn't.
Despite the name, it's actually a private university.
Penn State is Pennsylvania's land grant university.
Their duty is to deliver education. It's not solving political problems meant for elected officials (and the population at large).
Presumably they could spend a little bit of that to deliver some more education, couldn’t they?
https://projects.propublica.org/nonprofits/organizations/231...
Who's responsibility is it? Have you seen how the government operates? Why wouldn't UPENN want to help solve it?
How much have you contributed to Philly's woes?
Probably nothing, because it doesn't benefit you.
To resolve Philly's woes?
> Probably nothing, because it doesn't benefit you.
If they pay taxes...
If, over the long term, an endowment isn’t growing, it’s being mismanaged.
Endowments have strings attached that limits the use of funds, the endowed money isn’t just a general slush fund: https://www.acenet.edu/Documents/Understanding-College-and-U...
Also, an endowment is meant to be perpetual, so only a small fraction of it is spent every year to ensure the principal amount doesn’t go down. “Don’t kill the golden goose” in other words.
(Drugs) https://www.cbsnews.com/philadelphia/news/mexico-depicts-phi...
If you don't have guns, you won't have gun violence, but I guess the second amendment won't be changed any time soon.
For the federal government, they can choose how they allocate grants. Withholding grants from greedy schools is one option.
At that point, stop writing grants. Sending money to sub-optimal grantees to effect an education/investment policy is wasteful.
Not an unreasonable proposition. The purpose of the university is ostensibly to provide an education, not to continue hoarding more and more money.
One of the purposes. They’re also centres for learning and research and repositories of knowledge.
Cool. This isn't how the word works in practice. More importantly, it isn't how the trustees of the people who gave those universities the money asked for it to be used. (Nor the government or the granting agencies.)
> if an organization only did research but didn't teach I would not say they get to call themselves a university any more
Again, cool. This isn't true in reality. Research universities famously put research first, which is why they can attract top faculty.
Without research there would be nothing new to teach, Without research diseases wouldn't be cured. A lot of amazing things we have came from universities.
No. There are non-teaching research universities. Many universities have non-teaching faculty. Learning != teaching != education.
The point of an endowment is to provide long term support for whatever the purpose is of that endowment. That is done by investing it and using the investment earnings for that purpose.
There is something ironic about people who work in start-ups arguing for endowments to be spent down. Who do you think gives money to the VC funds?
It's not a pile of gold sitting in a vault on campus. It's an account which is productively invested and generating returns which are what's actually used for funding operations. A $20 billion endowment would be expected to produce about $1 billion per year, or around 20% of the annual operating budget. They need to bring in about $4 Billion more dollars per year to keep the lights on.
1- https://projects.propublica.org/nonprofits/organizations/231...
UPenn’s revenue includes “sales of assets” and “investment income,” i.e., taking some part of the endowment annually to fund their operations.
https://sfs.mit.edu/undergraduate-students/the-cost-of-atten...
[0] https://www.princeton.edu/news/2024/03/29/princeton-trustees... (go tigers)
(Median income by age rises sharply from 20->40, then flatlines... the median age of a mother is around 27?)
https://nces.ed.gov/collegenavigator/?q=MIT&s=all&id=166683#...
That link says 72% of incoming freshman in 2022-2023 received financial aid. Also has a full-time beginning net cost average of just under $22,000 in 2022-2023.
It's not a perfect source of data, but there is enough on College Navigator to let you dig into it a bit and compare to other schools.
> Last year, the median annual cost paid by an MIT undergraduate receiving financial aid was $12,938 , allowing 87 percent of students in the Class of 2024 to graduate debt-free. Those who did borrow graduated with median debt of $14,844.
Then you can't go broke from debt because it's a percent of your income, but it's also not "free" to address those who have concerns with that.
You could apply it to all outstanding school loan balances too. Get your loans paid off in exchange for an extra 4% income tax.
Graduates pay roughly 9% of their income above £27k towards debt repayment, and the remaining balance is written off after 30 years. Typical tuition fees are just over £9k per year.
This strikes a nice balance between encouraging people to carefully consider alternative non-university careers whilst also not preventing too many people from not being able to afford it.
Note my numbers are approximate because they can vary depending on when & where a person went to university a couple of other factors. Also I do think the system could be slightly improved (especially around maintenance loans) but on the whole has a good structure.
Why would we not want universities to respond to that signal?
The MIT undergraduate student body is about the same as it was in 1960, but the number of applications rose from around 4000 in 1960 to 11000 in 2000, to 20000 in 2024.
This isn't just an MIT problem. The undergrad populations of the top universities (Ivy league and similar) have hardly grown over the decades despite a large increase in student population overall in the US, not to mention the very large increase in foreign students over the past 25 years. This is by design to create increasingly exclusive brands.
Deep dive into this: https://freakonomics.com/podcast/the-university-of-impossibl...
Why should we expect individual universities to scale up their class sizes proportional to the student population in the US? Some universities may choose to, and new universities could spin up to serve the increased student body, but I don't see a compelling reason to argue that any given university should scale up just because college has (somewhat arbitrarily) become the default path for the entire middle class.
There's nothing wrong with MIT wanting to stay small, and it's not necessarily a conspiracy to build exclusive brands. They could also just recognize that their system won't scale up to an order of magnitude more students.
It’s just depressing. Sorry, I’ll go back into my hole.
The median salary of an MIT graduate is 120k and the median debt is 12k, and less for lower income families (2023-2024):
$0 - $30,000 family income: $6,866
$30,001 - $75,000 family income: $9,132
$75,000+ family income: $12,500
Bumping this up to families making $200k seems really unnecessary and helps people that don't really need to help.
https://sfs.mit.edu/undergraduate-students/the-cost-of-atten...
My household income is right around $200k, and my daughter (still a few years from college) would definitely consider e.g. UC Berkeley, which (including housing) is half the cost of MIT for an in-state student. Free tuition would certainly make her look at MIT more closely, so if the goal is to draw the best students (and helping poor students is a side-effect), then it's a good idea.
Also, it's headline-grabbing. There's at least one poor kid somewhere in the US who will read this headline and consider MIT, when they previously didn't (even though they probably already would have qualified for free, or nearly-free tuition).
As a young teen, I applied for financial aid, to a state school, and got a nonviable response, since my parents of 6 kids could afford to contribute zero, but some bureaucracy thought otherwise.
So I went to Community College part time, while working at a store, and then was a co-op student, and worked my way up from there. After working in industry, I went to grad school, at an Ivy and MIT, and only then did I learn what successful undergrad applications tend to look like, and also that there's various financial assistance available (including some not advertised).
My story is not of the system working. I've seen so much systemic class nonsense and rigging (and sometimes bad behavior by people who feel entitled to whatever they can grab). Being at a disadvantage in those games doesn't stop once you're nominally in. But the relatively recent need-blind admissions, and family income thresholds for tuition, help a lot, especially if we can pair that with getting the information/advising about successful applications to everyone.
MIT is a great financial investment.
families making $200k seems really unnecessary and helps people that don't really need to help
More than twice my parents mortgage. I'm sure it's worse, now.
The linked article says not.
Loans are not included in our financial aid offers because we believe your financial aid will cover your expenses. We do not expect any undergraduate to take out a loan. Rather than borrow, most students opt to work during the academic year. At MIT, this work often provides students not only a way to help pay for college but also with world-class research experience.
An actual graduate tax would be far less regressive than the current system
For all of you younger folks just starting your families, expect to pay full price for college if you are anywhere near the top 25% of earners (most of this site presumably). Any scholarship money is a bonus but aid probably isn't going to be forthcoming.
The subtext of this MIT announcement is that any family making more than $200,000 will be paying full price to subsidize the poorer students.
One couple, both PhDs, when their daughter went to Harvard, the mom quit her job to qualify for the free tuition.
What about if someone has a large net asset? will the 200K still apply?
I’ll hold off on asking for higher education to be free, as the culture still pushes back on that. But a return to the former model would be most welcome.
Maintaining national parks? Helping support inner city? Tutoring and improving public education? Imagine having the majority of American college students contributing to these worthy causes AND getting a strong education.
https://studentaid.gov/manage-loans/forgiveness-cancellation...
Get rid of government loans, bring us back to how universities used to operate, and education will once again be something you can pay for with a summer job.
All we're doing with these government loans is transferring the wealth of society to the universities.
or like it is currently for EU citizens in any EU country. Americans are getting ripped off from all sides.
Not that I think lowering the cost of education is a bad effort but appeals to some prior culture like they are apples to apples comparison is dishonest.
Yes, please. Students learned just fine without all the fancy facilities. Perks are great and all, but I would trade them for a low cost of education in a second.
I do t know that they are disinterested parties in this that can be trusted uncritically but there is a community college near me that has nicer gym facilities for their students than my big 10 Alma matter had for its “student” athletes when I was in school. Something drives that.
Maybe if I had found data for a wide range of schools instead of just a couple of hard to get into schools there would have been a more noticeable effect.
Free would be fine if we could expect actual return on the investment instead of extended high school, delaying adulthood, and channeling people from useful vocations within their grasp.
The answer to your question is it depends. Some assets like your primary home and retirements can be shielded from expected family contribution. If you've got assets sitting in a taxable account....
San Francisco + older bay area cities are a prime example of being a bastion of free market capitalism in the guise of progressivism.
The main reason SF is unaffordable is that the city government forbids people from building housing, which is the exact opposite of a free market.
The real problem is that more people want to live in SF than they have allowed housing to be built for. But it isn't clear that if they went with Houston-style "anything goes", would they still be that desirable? Or only as desirable as less popular Houston?
1. 2,251.1/sq mi Los Angeles-Long Beach-Santa Ana, CA / 12,828,837 2. 2,156.5/sq mi New York-Northern New Jersey-Long Island, NY-NJ-PA / 19,865,045 3. 1,614.4/sq mi Trenton-Ewing, NJ / 369,526 4. 1,303.6/sq mi San Francisco-Oakland-Fremont, CA / 4,466,251
Bay Area density fairly well correlates to SF's density, actually (yes, not as dense, but neither are the metros around the other dense cities).
More housing is always great, but I think it is really idealistic to think that building more housing in a hot area is going to bring prices down much, if at all. Literally, anywhere in the world, that simply doesn't happen. At best, we get a place like Berlin that has a nice economic bust that brings housing prices down for awhile (and then they start ticking up again as the economy improves), or Tokyo, where a country-wide baby bust coupled with anemic local wages and a huge 1980s housing boom hang over, keeps things reasonably priced.
Nope. Tokyo's population is still growing, and 1980s housing in Tokyo is deeply undesirable. The reason Tokyo has sane housing prices is that it continuously builds large amounts of housing, because they haven't made it de facto illegal the way too many places have. Sometimes that's all it takes.
What percentage of MIT students...
Two teachers in a HCOL city are going to be above 200k.
> 58% of full-time undergraduates received [some form of] MIT Scholarship [but not necessarily a full one] during the 2023–2024 academic year.
What's this going to do for people that aren't good enough to be in the top .1% of merit? Why do we care?
The other side of this is saying the status quo is; as a high school senior with wealthy parents, you don't have to compete against as many strong students if you apply for MIT because it has high barriers to entry (that aren't based on merit), and so you should apply even if you aren't particularly interested in their offering.
Also, the reality is most kids will be applying for all of the schools. MIT might want to improve their yield rate.
This doesn’t solve all of those problems but it’s a start.
In addition to pioneering Open Courses that were of high enough quality that you'd want to take them, this is hopefully the start of another trend/wave.
> And for the 50 percent of American families with income below $100,000, parents can expect to pay nothing at all toward the full cost of their students’ MIT education, which includes tuition as well as housing, dining, fees, and an allowance for books and personal expenses.
> This $100,000 threshold is up from $75,000 this year, while next year’s $200,000 threshold for tuition-free attendance will increase from its current level of $140,000.
- even though that's the article's 2nd and 3rd paragraph.
https://www.theatlantic.com/magazine/archive/2024/12/meritoc...
However, as a professor myself in a rapidly evolving STEM field adjacent to AI, I update at least 20% of my course materials each year to keep pace with new developments. As it happens, about a third of the new content is derived from my research group's latest work. Recording lectures isn't a one-time effort; it would require constant updates to remain relevant (and let me tell you, if you want to get the voice-over right, it is a lot more time-consuming and soul-crushing than simply turning up in class and giving a live lecture).
The value of live lectures goes beyond just "transmitting" content. They offer real-time interaction, immediate feedback, and dynamic discussions that adapt to the students' understanding. This level of interaction devilishly difficult to replicate in recorded formats.
I would ramble on more, but I need to return to the lecture materials I am developing for this Friday on Vision-Language Models :P
Time to tax these endowments.