Page 155 - Crisis in Higher Education

126 • Crisis in Higher Education

TABLE 6.1
Comparing Full-Time, Undergraduate Tuition and Fees
for One Year (2015–2016)
University Tuition and Fees
Harvard University $45,278 7
Massachusetts Institute of Technology $46,400 8
Stanford University $46,320 9
University of Chicago $49,026 10
Average Four-Year, Public University $9,410 11
Note: The average premium to attend these elite universities is about
$150,000 over four years of study. [($45,278 + $46,400 +
$46,320 + $49,026) divide by 4 to get the average for the elite
schools, then subtract the average for public universities
$9,410, then multiply by 4 to get the cost over four years.]

compared to the average public university. (Calculate the average annual
cost of tuition and fees at the four elite schools, subtract the average cost at
public universities, and multiply by four years of study.)
Top universities offer scholarships to the “brightest of the bright” and to
good students with strong financial needs, but so do public universities.
Typically, excellent students, who are a notch below the brightest in grade
point average or standardize test scores, have a substantially better chance
of getting scholarships from very good public universities than from elite,
private schools.
Why can elite schools charge so much for a university education?
The reason, at least in part, is the same reason people buy expensive
Rolls-Royce, Ferrari, or Lamborghini automobiles; there is exclusivity,
a perception of high status, and better outcomes such as performance
and comfort. With elite universities, there is a strong, inverse correlation
between the price charged for tuition and fees and the acceptance rate.
When universities have a reputation for high quality, they receive a large
number of applications and can be very selective about who they admit.
For example, Harvard University receives about 35,000 applications each
year and accepts only about 6%. Because elite schools have large appli-
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cant pools, they can charge much higher tuition and still admit a full
complement of students.
Although competing to be accepted to the best universities should be
encouraged, the important questions for applicants to consider are as
follows: Can they afford it? Do students who attend an elite university earn
a fair return on this extra investment? Affordability is far less important