Undergraduates with family income below $200k will be tuition-free at MIT

So if a university has money, learning there should be free?

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.

> So if a university has money, learning there should be free?

Not an unreasonable proposition. The purpose of the university is ostensibly to provide an education, not to continue hoarding more and more money.

> purpose of the university is ostensibly to provide an education

One of the purposes. They’re also centres for learning and research and repositories of knowledge.

Also known as education

> Also known as education

No. There are non-teaching research universities. Many universities have non-teaching faculty. Learning != teaching != education.

If they were spending the money on those things, this might be an argument. But they're not spending it; they're hoarding it.

$9 billion annually [1] qualifies as not spending it, I guess. I wish people actually checked figures before ranting online.

1- https://projects.propublica.org/nonprofits/organizations/231...

For a private school, they can choose how to spend their money. Hoarding it is one option.

For the federal government, they can choose how they allocate grants. Withholding grants from greedy schools is one option.

I don't think you understand how endowments work.

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.

They are spending it. On average they spend about 5% of it per year. In 2023 that was $975 million. It goes 53% to instruction, 22% to health care, 15% to student aid, and 10% to research, academic support, and other services.

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.

I disagree. I think teaching is the sole purpose of a university. Research is ancillary to that, and if an organization only did research but didn't teach I would not say they get to call themselves a university any more.

> I think teaching is the sole purpose of a university

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.

> If they were spending the money on those things, this might be an argument. But they're not spending it; they're hoarding it

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?

You can disagree but that doesn't change anything. Most major universities are research institutions that also teach people, and hopefully bring up some through the ranks to further research/academia/human knowledge.

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.

> 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.

I do understand actually, and my argument is that this wouldn't be acceptable in any other category of nonprofit, so why is it acceptable for universities? If the Red Cross decided to take donations and then hoard a 20 billion dollar endowment while also charging top dollar for disaster relief, people wouldn't accept that as a legitimate strategy. Why is it suddenly OK when a university does it?

The page you linked shows their revenue is $9.93B/year and is greater than their expenses. So clearly they're not spending down the principal.

Medical research is a profit center for many universities, not a cost center. They get funded by grants from external entities like the NIH and get to skim off the top of each grant for overhead. As one outsized example, my alma mater got $583MM in NIH grants in one year. I'm not saying universities don't fund research from their own coffers, but it's important to understand how much funding comes from the government and from other sources.

I wasn't addressing that. I was solely addressing the idea that universities were teaching centers that do research ancillary. A lot of them would consider that backwards. They're research institutions that also teach.

That’s because donors won’t let them drain all the principal in a few years.

UPenn’s revenue includes “sales of assets” and “investment income,” i.e., taking some part of the endowment annually to fund their operations.