Gilded Age: Brown Ends Tuition

Brown University has ended tuition for students whose families earn less than $60,000 per year, and is providing grants in place of loans to students whose families earn less than $100,000.

This comes at a time when Harvard, Yale, Dartmouth, and Stanford are also moving toward more progressive tuition, charging less (or nothing) to lower-income students while wealthier students along with the universities’ endowments bear the rest of the charges.

University endowments have been growing very large over the past 20 years, and many have seen a boon from non-traditional investments such as investments in private-equity and hedge funds.

Brown’s endowment hovers around $2.8 billion, about $285,187 per student. Assuming a conservative rate of return of 10% (university endowments tend to average a higher rate of return), Brown can spend nearly $30,000 per student per year. Though this may seem large, Brown ranks 32nd nationally in endowment dollars per student. Princeton’s endowment boasts ~$2,000,000 per student, more than six times Brown’s relatively humble amount. Yale, Rice, Harvard, and Stanford each have more than $1,000,000 in endowment dollars per student, which makes it easy to comprehend how they can continue to decrease tuition for lower-income students.

Perhaps we’re at the beginning of a gilded age for universities, one in which the massive value provided to society by universities is really taken into account by benefactors, who in turn give the gift of education to the next generation at little to no cost. With their newfound popularity among philanthropists, universities may be able to eschew public funds. It’s about time universities became more financially independent because government grants have decreased their usefulness to students over the years. 20 years ago, Pell grants covered 60% of a student’s tuition, and now cover much less – closer to one-third of the tuition at a public four-year university (with a maximum payout of $4,310 per year.)

Investments in education have proved to pay outsize dividends to society. I applaud both Brown’s newfound tuition policies as well as the generosity of all benefactors who give to education.

Brown Ends Tuition for Low-Income Students
List of U.S. colleges and universities by endowment