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.
Well students who attend Harvard do not go into student loan debt because this institution does subsidize student financial need since they do not participate in federal loan programs. Students may still take out private loans, but that would be up to them as more of an option than necessity unless they are using the private loan funds to subsidize their living expenses. Yale may be there as well, but I am not sure. As for public state universities, part of what you are saying is true and it would be helpful to students to get some in school support, but first you have to understand that there are thousands of different endowments that are purposed in different ways. For example the Texas A&M system has endowments but the Foundation does utilize funds for institutional scholarships for both undergraduate, graduate, and professional school students. The students complete a common continuing education scholarship each year and can be awarded institutional aid. The scales fluctuate though, so they may or may not have enough through this aid and other financial aid to pay for school alone. I do however agree that institutions with large endowments should somehow find a way to not continually increase not only tuition but fees. Texas may place a cap on the amount that public schools are allowed to charge for tuition, but the fees continually increase and I believe they will one day match if not actually outweigh the tuition which would be completely disappointing. All of this makes me continually feel like higher education is becoming more of a privilege than a right for people who choose to pursue.