
Brown University raising $120M to eliminate all student loans - champagnepapi
https://www.cnbc.com/2017/09/25/brown-university-raising-120-million-to-eliminate-all-student-loans.html
======
geebee
I feel somewhat ambivalent about this. I'm glad that Brown wants to eliminate
student debt, and I'm glad that low income students at ivies often pay no
tuition. However, this doesn't change their essential model, which is to
enroll a very small number of undergrads[1], deny admission to the vast
majority of applicants, and generally lean toward affluent students.

Compare this with an elite public research university like UC Irvine or UC San
Diego. I didn't say Berkeley or UCLA on purpose, I said UCI and UCSD because
people often aren't aware of what research powerhouses mid tier UCs really
are, that they produce far more groundbreaking research than many of the
exalted ivies. In addition, these universities enroll a much larger number of
undergraduates, and a much higher percentage of low income students. The
result is that these institutions do far more for the US and the world - they
produce exceptionally valuable research, and act as an engine for social
mobility on a large scale. UCLA, for example, enrolls more low income students
than the entire Ivy League combined. I believe this is true of several UC
campuses, and until very recently, it was true of Berkeley as well.

In short, I don't want to see the ivies patting themselves on the back too
much here for offering a sweet deal to low income students. It's a fine enough
thing in itself, but let's be clear - the elite private college system is
structured to ensure that the absolute number of low income students will
always be very low. I'd be more impressed to hear that an ivy is scaling up
like UC Irvine and offering a good deal to a high percentage of low income
students, than to hear they're remaining tiny, and using a massive endowment
to shower benefits on a minuscule number.

[1] Interestingly, Berkeley and Harvard enroll similar numbers of graduate
students, who are often very profitable as low paid skilled labor for research
labs. The divergence is at the undergraduate level.

~~~
cphillips
Brown (and most likely all other Ivies) is need-blind (except for
international students).

So, unless you think they are lying, your point doesn't stand on limiting low-
income students. You point on size of college is an altogether different
issue.

"Beginning with the Class of 2007, Brown implemented its need-blind admission
policy. Need-blind admission simply means that an applicant's ability to pay
for their education will not be a factor in the admission decision"

[https://www.brown.edu/about/administration/financial-
aid/nee...](https://www.brown.edu/about/administration/financial-aid/need-
blind-admission)

~~~
MikeTheGreat
I want to start by saying that it's awesome that Brown, Cornell, Yale, and
whatever other Ivies are need-blind. That's awesome, and I applaud them for
it.

That said, economic status and academic performance correlate closely. A
college that's very selective will necessarily filter out a lot of lower-
income kids purely because it's hard to do extra-curriculars if you need to
work after school and/or if you can't afford them, it's hard to get good
grades if you're worried about whether you get to eat this week, etc.

My point being that Brown can be both need blind and not have a lot of lower-
income kids there.

~~~
goialoq
Why should a school select students based on extra-curriculars? Why is
"working at a job" not considered an extra-curricular?

Why should a college even choose the highest academic performers? It's an
educational institution, not a contest.

At the end of the day, what is a college optimizing for, and why?

Colleges could be selecting for students who the college can provide the most
value to, or which students need that college the most, or which students show
the most potential for _post-college_ success by the college's metrics.

~~~
longerthoughts
>Why should a college even choose the highest academic performers? It's an
educational institution, not a contest.

It will inherently be a contest as long as admission rates are below 100% and
schools' reputations are non-uniform. If you shake up admission criteria to be
more holistic and less weighted on academic performance, applicants will
refocus their attention and compete to satisfy the new set of criteria (at
least those within their control).

I definitely wouldn't argue that colleges are optimizing for greatest societal
benefit, but it would take a lot to truly align their self-interest with a
selection process that doesn't heavily consider academic performance
(particularly for private universities).

~~~
JoeAltmaier
Still don't understand. By expanding the pool of admissible students
(including those with other attributes than academic), don't they _increase_
their rates?

~~~
longerthoughts
This is a little beside my point, which was that competition will remain as
long as schools remain selective ("selective" defined for the sake of this
argument as accepting less than 100% of applicants). Even if there was a broad
increase in admission rates, people would still compete to be part of the X%
accepted to "top" schools.

To address your point, though, I'll assume your use of "admissible" is
synonymous with "admitted" students. An increase in rates would require that
the number of admitted students increase relative to the size of the applicant
pool. If the applicant pool increases with the number of admitted students
there isn't necessarily an increase in the rate of admission depending on the
relative increase in the size of the applicant pool. If we instead define
"admissible" as meeting criteria for admission but not necessarily being
admitted, I wouldn't be surprised to see a corresponding increase in admission
standards to maintain existing admission rates. Interested to see if anybody
has evidence to support or refute this based on historical trends in admission
criteria (GPA, SAT, etc.) vs. admission rates.

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bmcusick
Not that loan-free educations are bad, but why is Brown raising $120M from
alumni and the like, rather than lowering their tuition by $120M?

The student loan crisis is only a crisis because Universities (lead by the Ivy
League and similarly elite private colleges) are charging exorbitant prices
for tuition, room, and board.

This isn't charity or benevolent. This is just bilking a different class of
people.

Efforts to reduce the cost of tuition, rather than shift the cost burden to
different people, are the real humanitarian work here.

Here's a story from 2013 on Texas's efforts to create $10,000 Bachelor's
degrees. [https://www.texastribune.org/2013/01/30/guide-getting-one-
te...](https://www.texastribune.org/2013/01/30/guide-getting-one-texas-
new-10000-degrees/)

~~~
Retric
If your pulling in ~10,000$ per person in tuition, and the average person
takes 5 classes with a class size of 30 that's. 60,000$ per professor per year
if they teach 4 classes, 75,000$ per professor if they teach 5 and 90k & 6
classes before expenses per class. So, the only way for that to work out is
some other subsidies.

However, lectures allow you to use TA's to more cheaply expand class sizes and
might make it possible at the undergrad level.

~~~
ghostbrainalpha
But Brown's tuition for out of state students is just under $50,000 per year
per student.

Does that mean they could be paying those professors $300,000?

~~~
timthelion
Aren't there other expenses like maintaining the campus and paying for journal
subscriptions and research equipment?

~~~
nascar_is_bad
are you just listing off the things you think a university spends money on?

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jeremyt
If only they had $120M sitting somewhere they could use. I dunno, like a
savings account or something. A really big savings account that's so big they
have to hire asset managers to manage. It would be even better if this savings
account was made up of money that good people donated to the institution with
the intention that it be used to further education.

Yeah, that would be really nice.

~~~
harrisjt
Oh, the intention is good PR. Not donating to an already rich school for
"further education".

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votepaunchy
> "The university plans to add $4.5 million to its financial aid budget each
> year to cover its 6,500 undergraduates."

~$700 per student.

> "In 2016, the average Brown student graduated with a debt of $23,810,
> compared with $8,908 for Princeton, which adopted the no-loans policy in
> 2001."

The increased financial aid may not even cover the annual increases in student
debt. This change only covers a fraction of Brown student loans.

~~~
dcole2929
you're assuming that the money is going to dispersed equally which is
unlikely. The money is intended to replace the loan portion of financial aid
packages. Most students get some amount of tuition covered by grants, and
outside scholarships. So for example if tuition is $10000 (not real numbers
obviously), and the student get $4,000 from pell grant and another $2,000 from
an outside scholarship this new pool of money Brown raises only has to cover
the outstanding $4,000 not accounted for by other sources.

------
thegabez
I don't sympathize for students graduating Brown with high levels debt as much
as I do for students graduating with the same debt from University of Phoenix.
Some Universities are predatory in nature and have very low return on
investment. Graduating from an Ivy League University will always have a
relatively high return on investment. However, this is a step in the right
direction for access to higher education in general.

------
hiram112
>In 2016, the average Brown student graduated with a debt of $23,810...

Considering the sticker price for an undergrad at Brown in 2013-2016 is
approximately $250K, along with the higher median debt loads we're seeing from
graduates of less prestigious, cheaper universities, it leads me to believe
that these types of elite schools are comprised of two very specific types of
students:

1\. Wealthy privileged students whose parents pick up the majority of the cost
out of pocket.

2\. Students from low-income families who receive almost a full ride via
government subsidies, private money (scholarships / grants), and the school
itself.

Similar to federal and state tax burdens, health care costs, etc., the middle
class continues to carry the ever-increasing burden of both the very wealthy
and the disenfranchised, while they themselves continue sinking.

~~~
joshuamorton
3\. The school uses a sliding scale of "need based", so middle income students
are given some aid. More than very wealthy students, but less than very low
income students. The end result is that middle income students pay a similar
price to what they might pay in in state tuition at a state school.

Why is your first thought that middle-class students are punished, and not
that an institute of higher education, full of very smart people, can figure
out an equitable way to disperse need based aid?

~~~
hiram112
I will stand corrected if I can find the sliding scale with accurate data
fulling explaining the formula.

But what I saw myself years ago at school, and currently hear anecdotally, is
that most subsidies - from the feds, states, the university, scholarships and
grants, etc. - seem to be distributed in a rapidly diminishing fashion instead
of linearly (subsidies vs income).

In other words, the most poor (or certain minority groups), will get nearly a
full ride. The truly wealthy at the other end will get very little, of course.
But those in the middle get far less than would be expected if the subsidies
were linearly scaled. And so once you earn just a bit more than the most
disenfranchised, you don't get much, and instead get saddled with loans.

~~~
joshuamorton
Which schools are you looking at, anecdotally? Ivies work differently than
most other schools by virtue of having larger-than-normal coffers.

For example, Harvard's financial aid works in much the way I describe.
Families with incomes below 65K pay nothing, those with incomes 65-150K are
"expected to pay between 0 and 10% of annual income", and those above that are
evaluated on a case by case basis.

I'd play around with this[1], and see what you think. For a family of 4 with
no liquid assets, you need to be making 265K a year to not get any aid. That
puts you solidly out of the middle class anywhere except SV/NY, where I expect
you could make an argument about CoL adjustments.

[1]: [https://college.harvard.edu/financial-aid/net-price-
calculat...](https://college.harvard.edu/financial-aid/net-price-calculator)

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paulus_magnus2
Time for market disruption? How about free online MOOC that ends with a widely
recognized (accredited) diploma.

Lectures are free, same for notes. Exams are paid for. You learn on your own
or in groups. With additional paid tutoring on request.

Technology allows everyone to get MIT grade education for free.

~~~
fra
You assume, wrongly in my opinion, that the main value of a prestigious
university is the classes that they provide. From my experience (n=1) there
are great instructors to be found at many (most?) universities. Indeed you
will likely get better bang for your buck at your state’s public universities.
The value of an Ivy League education is in the ressources available to you
(e.g. funding for entrepreneurship or to go work in a foreign country during
the summer), and access to the network.

~~~
paulus_magnus2
Education itself has huge vale: anyone willing to do CS degree is pretty much
guaranteed $100k+ salary. In Europe you can get the degree for free / peanuts.
Paying for "brand" offers no additional measurable skills / knowledge, it buys
you prestige.

What you refer to as "access to network" is mostly cronyism. Paying Harvard
fees is essentially buying into the right group of people (rich & powerful)
who are vested into this cycle of elite recycling via hiring only "insiders"
for best roles. I can't speak for US, but in UK it's been proven this happens
a lot.

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madengr
Is that a bounce house in the article photo? WTF? Now we know where the
tuition goes. How about graduating debt free by:

1) Going to an affordable school. 2) Slinging packages at FedEx, or some other
job that will contribute towards educational expense.

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creaghpatr
Related, Brown's current endowment is appx $3B.

~~~
goialoq
Brown is a University, so that endowment funds research as well as tuition
support.

~~~
ApostleMatthew
And even beyond that, comments that bring up endowments usually come from a
misunderstanding of what an endowment is. Its not like Brown has a bank
account with $3B in it which they can access whenever and however they'd like.
Endowments pay out a certain amount of money each year (I think its around 4%
each year for most universities), and usually have strict stipulations on how
its spent.

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harryh
How is $120M enough to do this? At a 4% withdrawal rate that's about $5M a
year.

They say the average student is graduating with 23,810 in debt. That's about
$6k per year assuming a typical 4 year undergraduate schedule.

$5M / $6k = enough to cover ~833 students.

According to
[https://www.brown.edu/about/facts](https://www.brown.edu/about/facts), Brown
has 6,580 undergraduates.

Seems like they'll need about 8x this much money to accomplish their goal?

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at-fates-hands
What happens when the 120M runs out?

Are they putting the alumni permanently on the hook to pay for future incoming
students who need financial assistance?

The article doesn't address this issue.

~~~
mac01021
I think the purpose of the 120M is to create an endowment from which ~5% can
be taken to provide financial aid every year. If their investments perform as
hoped, it should last quite some time.

~~~
junkscience2017
six million dollars a year, of which some is gobbled up by fees.

Brown has 6500 undergrads...at their current full tuition just the incoming
class exceeds that

~~~
chimeracoder
> Brown has 6500 undergrads...at their current full tuition just the incoming
> class exceeds that

Well, then they should be able to afford this easily with the size of the
fund, because they're not going to be covering 100% of the tuition for 100% of
the students. They're just (aiming to) eliminate the portion that would be
covered by loans.

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readhn
"One of the reasons Ivy League schools can do these programs is not only
because they have large endowments but also because they have very few low-
income students.."

Haha-I see so basically they have pretty much noone who qualifies for free
tuition (everyone is making "too much"). Haha that's hilarious.

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wdr1
This doesn't eliminate all loans. It eliminates loans as a component of a
financial aid packages.

If you did not qualify for aid & need loans, those will still exist.

I feel there's an "uncanny valley" when it comes to affording college. I came
from a family of modest means so was able to attend a top (and expensive)
school for very little. As an engineer at a large company I'm pretty sure my
kids won't qualify for financial aid, yet it's unlikely we'll be able to
afford the sticker price of a top school (~$70k/year/kid).

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lerie82
This applies to undergrads, so I'm assuming they are already in debt from
student loans. What's another 10-15 grand? Doesn't seem like they are really
helping anyone here.

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austenallred
This article is from September. Has anyone seen or heard any updates? A quick
google didn’t show anything.

~~~
cli
I am a graduate student at Brown. The deadline for raising one quarter of the
funds is December, so I expect we will be updated on this by next week. I have
not received any recent emails on this.

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bkruse
They should just do an ICO

/troll

