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

Small businesses are allegedly the backbone of America, and I feel these tuition support programs overlook this segment of the middle-class.

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.

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'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.

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.

I like to call this "resort-style education".

I dont think this was an oversight or mistake. I think the expectation was that yes, people should sell assets if they have them .

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.

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?

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.

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.

Specifically, what percent of the business would have to be sold off? My reaction is very different for 5% versus 50%.

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.

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.

Sorry for my ranting, I just cannot believe what is still happening.

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.

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.

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.

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.

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.

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.

You hear a lot of anecdotes both ways and it is quite hard to get a good picture of the real situation.

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.

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.

I think the idea is that Yes, the expectation is for people to make actual sacrifice before they qualify.

For someone not in your system, the expectations that seem normal to you sound absolutely insane to others.

How many times were you audited before learning this valuable lesson?

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.

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.

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

But how about if I ask "And after paying for mortgage?"

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)

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).

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.

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.

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.

...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...

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."

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.

Anyway no, they should not cut their kidneys out and sell them.

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)?

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.

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.

That still seems like heavy handed overreach to me. Should they not instead contact you for clarifications about the ambiguity?

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.

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.

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.

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 you don't envy his current lifestyle doesn't mean he's not rich.

That is prove the kids are really responsible.

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.

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.

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.

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.

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.

    > 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

    > 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).

    > the ideal is that college should be very expensive for rich people and cheap, free, or at least more affordable, for less wealthy people.

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.

If you're there on a need-based scholarship, you need both kinds, but neither of them need you.

    > MIT is a huge outlier in terms of R&D

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.

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.

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.

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.

This isn't due to staff shortages, it's more of a difference in tradition/philosophy of teaching

I wonder if people like you just lack the imagination or system thinking or equate poor with useless or are just afraid of thinking people? From the perspective of the state and the society it’s beneficial to have an educated population, unless you think you won’t have enough stupid people to man the factories?

When you say them living off the asset value of their stock, you mean the dividends from the stock?

(E.g. you hear about college dropouts starting businesses all the time. You barely ever hear that about people who haven’t attended college at all.)

> MHSA regulates him like he's running a pit mine

Sounds like he does? As per your own comment.

Having just filled my annual benefits selections tonight, here's my data point: health insurance is $3000/month on the company plan (36K/year).

Yes, the company "pays" for a percentage of that. But of course the entire $3K/month is part of my total compensation cost to the company. If healthcare wasn't so ludicrously expensive in the US, they could afford to pay me more, instead of funneling all this money to insurance company profits.

Paying tax and investing in your kid is also a good thing. Putting your income into the S&P 500 is also a good thing, but being wealthy enough to do so should exempt your children from this subsidy