Author here. Another long read -- apologies!
The TL;DR of this essay might perhaps be:
- College degrees are more valuable than ever in post-industrial economies, so applicants to top-tier schools are up 240% over the last 25 years
- Meanwhile, available spots at top-tier colleges in America have increased just 2% over the last 25 years (Thanks to Tyler Cowen & others for complaining about this publicly)
- Microeconomics 101: Fixed Supply + Increased Demand = Increased Price
- That’s the obvious part
- The non-obvious part is that this is intentional...
- ...because the Charity-status ( 501(c)(3) ) of Colleges in America depends on more-than-half of their students being unable to afford the education (read: “receiving financial aid”)
- That Charity-status protects the Investment Returns of College Endowments from Uncle Sam & the IRS
- Investment Returns Compound over time, and there is no more powerful force on Earth — anyone not playing the game to maximize Compound-returns will lose to everyone who is
- Thus: if Colleges want to keep their Investment Returns tax-free, Tuition MUST remain unaffordable for at least 50% of undergrads
The TL;DR of this essay might perhaps be:
- College degrees are more valuable than ever in post-industrial economies, so applicants to top-tier schools are up 240% over the last 25 years
- Meanwhile, available spots at top-tier colleges in America have increased just 2% over the last 25 years (Thanks to Tyler Cowen & others for complaining about this publicly)
- Microeconomics 101: Fixed Supply + Increased Demand = Increased Price
- That’s the obvious part
- The non-obvious part is that this is intentional...
- ...because the Charity-status ( 501(c)(3) ) of Colleges in America depends on more-than-half of their students being unable to afford the education (read: “receiving financial aid”)
- That Charity-status protects the Investment Returns of College Endowments from Uncle Sam & the IRS
- Investment Returns Compound over time, and there is no more powerful force on Earth — anyone not playing the game to maximize Compound-returns will lose to everyone who is
- Thus: if Colleges want to keep their Investment Returns tax-free, Tuition MUST remain unaffordable for at least 50% of undergrads