It depends on whose ox is being gored...

was a while ago already some MIT prof (i forget who) proposed MIT just plain stop charging tuition, since their endowment was plenty big enough to cover that income source without touching the capital. the most common counterargument was that letting kids have education for "free" would lower the status and prestige of the college.

i've audited the MA CAFR using gerald klatt's algorithm. we're not "cash-strapped" at all, just being lied to, as usual. i'm no comptroller (he is) but it seemed like easy math.

the end-of-year 2007 figure is over $13 bln.

if someone could explain more of this to me, i'd be glad to know about what exactly i'm doing :)

GKR's website http://www.cafrman.com/
my work http://wroth.org/cafr/ma/

Are you serious? Do you have any idea how long the line to get into a FREE MIT would be? Regular expensive MIT is already pretty high on the list. If anything it would make admissions more competitive and thus make the school more prestigious.

some more info for parties interested in MA.

http://www.smallgovernmentact.org/
http://www.carlahowell.org/
http://www.eagletribune.com/punews/local_story_110235334.html

Typical cognitive disconnect for the Globe. After hundreds of editorials mocking the idea that higher taxes and more regulations might motivate small businesses and start-up companies to locate in a more friendly regime, suddenly they've got their panties in a twist for fear that a 2.5% tax might make Harvard move to New Hampshire or MIT to Texas. One interesting aspect of the proposal from a legal perspective is the Massachusetts Constitution article establishing a unique position for Harvard. When I was with the Massachusetts Board Regents, they wouldn't give us the time of day without reminding us that they were under no legal obligation whatsoever to do so.

Jim W: Nah, applicants to MIT strongly self-select. They have to e.g. believe they can do two terms of the calculus (first is the AP BC sequence) and two of calculus based physics---at MIT's pace. And there's lots more....

This season they had 13,500 applicants, last they had 3,000 who could do the work, and this season they sent offers to 1,500, for a class size of about 1,100, i.e. the yield (fraction who accept) is very high.

There's something most people don't realize about endowments and tuition in general. Much if not most endowment money is restricted in what it can be used for (look at the current Princeton Woodrow Wilson School scandal/lawsuit). Tuition money is not. How good a thing this is depends on how much you trust university administrators. MIT at least has pretty good corporate governance.

MIT is also only recently wealthy, due to it being a very young institution (post Civil War) and being very stupid in a whole bunch of licensing decisions (e.g. core memory, semi-synthetic penicillin) and poor management of their endowment, all issues only recently improved. And the end of the Cold War hit many parts of it very hard (it's a near miracle the AI Lab survived, Stanford's didn't), plus of course the dot-com recession hurt quite a bit recently; things have been tight for a long time.

For all the mocking of Harvard, many parts of it are top notch, world class and not PC and make substantial contributions to e.g. math, science and medicine. This proposal is very bad, essentially eating the nation's seed corn, and as comments in the linked article point out, 2.5% and just the wealthiest institutions are probably just the beginning. We know all too well the limitless appetites for power and money of governments.

- Harold (MIT class of '83)

If you want to see the full impact, see my post from a few days ago:

When they say they just want a little, they really want a billion.

Sorry I didn't mean for what I said to be an endorsement of this shitty tax. I was just commenting that I thought MIT would benefit from not charging tuition. But honestly I think MIT would have the same high reputation regardless of tuition.

Bitter: great post and marshalling of facts.

Jim W: No problem, I didn't take your posting to mean such. I just disagreed with some of your points and you gave me an opportunity to weigh in generally on this.

As for MIT retaining its position regardless of charging tuition, in the short term certainly, but in the long term the loss of such unrestricted funds would hurt and probably quite a bit. Using Wikipedia numbers, annually $138 million for the undergraduates, $344 if you include graduate students, compared to $225 for the tax. Unlike many alumni donations (80% for Harvard) or research overhead, that money can be spent on anything.

And I'll reverse in part on your thesis that dropping tuition would get an increase in applicants. MIT has many strong non-STEM (Science, Technology, Engineering and Math) departments such as economics. If I knew I wanted to major in e.g. economics and was mathematically strong (good for that field), the cost in time and sweat of taking the STEM General Institute Requirements (2 semesters of the calculus, 6 in science and 1 lab) might be a small price to pay and I would certainly learn all sorts of useful stuff.

Finishing up, my best contact in the administration pointed out that Boston College and Boston University would be included in this grab and they are very influential in the state. This proposal is judged as unlikely to fly, at least for now.

- Harold

I love the quote from Harvard: "But then you would be taxing success." Oh the outrage! Uh... yeah. I think that's the argument that business and individuals have been making for a loooooong time with regard to the estate tax and high taxes on dividends and capital gains.