If Harvard were free to all

By Daniel Shin

What if Harvard were free to all? To be specific, Harvard's tuition is literally free to students from low-income families. Harvard University renewed its efforts and announced the plan a decade ago that undergraduates from low-income families would pay no tuition. For families who earn between $65,000 and $150,000, the expected contribution is somewhere between zero and 10 percent of families' annual income.

That said, if families earn below $65,000 per year, students won't pay anything. The stated goal is to bring the most promising students to Harvard and ensure that any admitted students can afford their full Harvard experience with no burden on their shoulders.

Ivy League schools such as Harvard and Yale have a reputation of elitism, exclusivity and excellence. Attending one of these schools is a dream for many, but the cost of attending is costly. Attending Harvard, for example, costs upwards of $51,000 in tuition and fees per year.

In addition, room and board and other university fees bring up the total price to more than $80,000 per year. Yet these fees are not the most expensive. Columbia University in New York City, for example, is another $10,000 more than Harvard's tuition. To sum it up, four years of a Harvard undergraduate degree cost more than $300,000 per student if the student has to pay the cost in full.

An Ivy League school degree is more than just social cachet. It can pave the road to a great-paying job or a more advanced post-graduate degree program. Many parents think that an Ivy League education is an amazing investment by nearly any measure. But it does not always come cheap. Harvard claims that its admission process is entirely need-blind and that it is willing to support students and reduce their cost burden.

On average, $53,000 in financial aid is disbursed per student, and more than half of the students enrolled at Harvard receive need-based scholarships. As Harvard says it is committed to diversity and inclusion, it aims to invite the top students, supposedly from different social backgrounds. Although a 2019 National Bureau of Economic Research study on race and legacy admissions at the university reported otherwise, Harvard claims that its admissions process is based on merit.

Harvard is a well-funded school due to its prestigious endowment program that has grown to $53.2 billion. The Harvard Management Company received a massive 33.6 percent in returns on its investments in fiscal year 2021. This amount is a monumental financial gain of over $11 billion in just in one year. On top of that, the endowment receives frequent philanthropic gifts donated to support specific aspects of Harvard's teaching and research.

Without a doubt, these gifts connect scholars and students from diverse backgrounds and offer them many opportunities at Harvard. In the 2021 fiscal year alone, $597 million was granted to students in financial aid and scholarships. The endowment is a critical pillar of any funding needs at Harvard, making up more than one-third of Harvard's revenue.

Any major university endowment is structured to exist in perpetuity. Universities continue to rely on their endowments' earning potential. Any excess or value appreciation is retained in the endowment so that it can continue to support future generations. It is said that the endowment is carefully managed and guided by the principles of intergenerational equity.

The majority of the 14,000 funders behind the Harvard endowment have specified that their gifts must support a particular cause, such as endowed professorships. The sole purpose of the endowment is intended to belong to students and scholars who will shape the future.

Higher education is a costly endeavor. Many parents will give everything to ensure that their children are well educated to succeed. Any external resource will undoubtedly help them to cover the cost of expensive education. The endowment is often misunderstood as a free checkbook, though, but that is not how this endowment is supposed to operate.

Harvard's endowment has blossomed but it has to continue seeding fairer admissions and making education more equitable. Elite schools in the U.S. have amassed huge wealth and university endowments also enjoyed a tax-free status until the endowment tax in 2017. Hence, many argue that elite schools like Harvard have a moral obligation to prioritize egalitarian education opportunities, even if it might impact their bottom line.

In 2016, Ron Unz, a tech entrepreneur and political activist, organized the "Free Harvard, Fair Harvard" campaign, seeking free tuition at Harvard and greater transparency in the admissions process even if he didn't make it to the board. Indeed, many have highlighted that this free tuition proposal has raised awareness of Harvard as an option for students who may not have considered the Ivy League before.

Others also argue that a university education should be free with government support. Germany tops the list of countries where one can pursue higher education at no cost. Federal financial aid and scholarships help students afford college. Otherwise, rising tuition costs bury students or supporting families in debt, raising questions about college's true value. The economic downturn is poised to worsen the college affordability crisis and widen the opportunity gap between low and high-income households.

Harvard, like many elite Ivy League universities, has used financial incentives and diversity goals to stimulate the admissions of students with high intelligence and potential, from modest backgrounds. We tend to be obsessed with high-status and a winner-takes-all mentality. Sadly, a privileged few at the top of society often get so much more than the rest.

I won't harp on about the many themes of exclusivity surrounding Ivy League experiences as college education is not a must-have for wealth and success anymore. However, elite institutions like Harvard continue to compete for talent because despite many criticisms, Harvard still has a reputation for admitting many strong students and nurturing them to do great things. Top universities like Harvard demonstrate this through holistic reviews in the admissions process as the key to unlocking a diverse educational experience.

It is in some ways a privileged phenomenon in college admissions that elite institutions with extensive resources can evaluate college applications in this way and offer "almost free" education to the best of the best. Minds can change and institutions will grow over time. However, universities such as Harvard could be completely free in the talent age, as money shouldn't be a barrier to recruiting highly talented future leaders.

Daniel Shin is a venture capitalist and senior luxury fashion executive, overseeing corporate development at MCM, a German luxury brand. He also teaches at Korea University.