I have a question for the boss.
Greg Bernhardt said:
Friendly reminder to keep all general political comments and opinions out of this discussion and make sure all comments are directly related to the article. Let's keep this productive and civil or it will not last.
The original link really is
not an article but an opinion piece. Is it even allowed?
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Characteristic of opinion pieces, I thought there were some things in there that are rather disingenuous, and it reeked of affect heuristic. For example, here is but one issue from it.
Some universities might be able to cover tuition for some students, but in so doing, they would be forced to decrease the total number of graduate students they accept.
Ignoring research grants for the moment, a more nuanced view is that outside an elite core of schools like MIT, Harvard, Stanford, Yale, and a few more who have ##\gt $10Bn## in their endowments, schools will have to materially re-budget and re-allocate priorities. You would anticipate something like a gross up mentioned by
@ZapperZ. This can be easily approximated by a geometric series for those interested. The schools costs would increase by 10 - 15 k per student in the cases cited. Obviously schools with lower tuition (think state schools) would have a smaller dollar impact per student, though state institutions tend to be more cash strapped.
A very simple back of the envelope calculation suggests it will have minimal impact at Harvard and MIT, the author's institution(s). E.g. at MIT whose endowment is much smaller than Harvard's, you have
##$13Bn## endowment, that perennially outperforms. Assume it gets ##4\%## a year after inflation, which leads to ##$500MM## of investment income per year. The increased costs of say ##~$15k## per grad student times ##~7,000## graduate students is ##\approx 100MM## increase in costs per year for MIT. Very manageable for such an institution. Note historical returns at MIT are well above a real 4%. And part and parcel with having a big endowment is MIT doesn't run a deficit. (In terms of second order effects I could easily imagine a case where places like MIT and Harvard actual increase graduate admissions if this became the new normal -- it is only speculation, but it could make a lot of sense institutionally... why?)
You rarely see back of the envelope calculations like this in opinions and editorials, one of many reasons I don't read them. I only clicked the link because I thought it was an actual article.
My more nuanced take is, rather than "decimate American competitiveness" (qtd in op-ed), the measure could drive an even bigger wedge between Haves (universities with big endowments) and Have nots (i.e. all other universities).
That is, if it passes and stays in effect. The bill may not pass, or this provision could pass and then be canceled in a couple years as mentioned by others.
