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Harvard, Yale, and Princeton could afford to make tuition free

Justin Sullivan
Libby Nelson is Vox's policy editor, leading coverage of how government action and inaction shape American life. Libby has more than a decade of policy journalism experience, including at Inside Higher Ed and Politico. She joined Vox in 2014.

Washington Monthly has ranked elite colleges based on their affordability for middle-class students, and Harvard, Stanford and Dartmouth come out looking good. All of them cost, on average, less than $10,000 per year for students from families making less than $75,000.

But other Ivy League colleges could afford to do even more, the magazine points out. Based on their annual returns, Yale, Princeton and Harvard could give away their education for free without touching the capital in their multibillion-dollar endowments:

Harvard can afford to charge low-income families only $1,533 because it's sitting on an endowment worth $1,240,548 per student. A 5 percent return on that money — and Harvard historically has earned about 12 percent — would generate $62,027 a year, more than enough to cover the $59,950 sticker price for a year at Harvard. It makes you wonder why the school charges lower-income students any tuition at all…. Princeton and Yale both have even bigger endowment per student ratios than Harvard, but charge low- and middle-income students double, triple, or quadruple as much. What's with that?

Yale has about $1.7 million in endowment money for every student it enrolls and an average annual return of 11 percent for the past 10 years. Princeton has $2.3 million for each student and a rate of return around 10 percent. Stanford, like Harvard, has $1.2 million for each student and an annualized rate of return of 10 percent.

So why charge more than $60,000 per year? Tuition for everyone at the nation's most elite universities would be a giveaway to many wealthy students. Only a handful of universities have such vast per-student resources, and they tend to have rich student bodies already. Statistics from Harvard, which offers financial aid to families making up to $200,000 per year, suggest that at least one-third of students are from families with higher incomes.

But the analysis suggests that it's financially possible — and it raises questions about whether the wealthiest nonprofit universities are being generous enough in admitting and financing poor and middle-class students.