Harvard earns enough money on interest from its endowment that it could offer free tuition to all students and still make profit on the interest.
I think that says enough on its own. There is also the fact that university endowments are tax exempt, and not required to spend any of its endowment… Harvard is an anomaly among universities, as it is the largest around, but its not unusual for universities to have huge coffers of excess cash:
| Rank | School | Endowment | Change from 2012 |
|---|---|---|---|
| 1 | Harvard University | $32,334,293,000 | 6.2% |
| 2 | Yale University | $20,780,000,000 | 7.4% |
| 3 | University of Texas System | $20,448,313,000 | 12.0% |
| 4 | Stanford University | $18,688,868,000 | 9.7% |
| 5 | Princeton University | $18,200,433,000 | 7.4% |
| 6 | Massachusetts Institute of Technology | $11,005,932,000 | 6.8% |
| 7 | Texas A&M University System and Foundations | $8,732,010,000 | 14.3% |
| 8 | University of Michigan | $8,382,311,000 | 9.0% |
| 9 | Columbia University | $8,197,880,000 | 7.1% |
| 10 | Northwestern University | $7,883,323,000 | 10.7% |
| 11 | University of Pennsylvania | $7,741,396,000 | 14.6% |
| 12 | University of Notre Dame | $6,856,301,000 | 8.3% |
| 13 | University of Chicago | $6,668,974,000 | 1.5% |
| 14 | University of California | $6,377,379,000 | 7.0% |
| 15 | Duke University | $6,040,973,000 | 8.7% |
| 16 | Emory University | $5,816,046,000 | 6.5% |
| 17 | Washington University in St. Louis | $5,651,860,000 | 8.1% |
| 18 | Cornell University | $5,272,228,000 | 6.6% |
| 19 | University of Virginia | $5,166,660,000 | 7.9% |
| 20 | Rice University | $4,836,728,000 | 9.5% |
via: cnn
One might wonder what good is it actually doing to have universities with these kinds of assets NOT doing anything to alleviate any of the financial burden on students that attend there. for instance, if you have 5 billion dollars a year flowing into your school, why are students, (who could eventually contribute back to the endowment in the future) forced to take out loans in the multiples of thousands to attend? It would be trivial to bring the cost down to levels that thousands of alumni have enjoyed in the past, which would help the students, the university, and society and the country as a whole.