(2006-09-29) Vedder Why Charge Tuition

Richard Vedder asks why rich universities charge tuition for College Education. Most Financial Aid issues disappear if tuition is zero. Harvard's endowment is $29 billion. With a five percent rate of return, that is $1.45 billion annually in income --about $75,000 per Harvard student. According to Department Of Education data, salaries of teaching faculty per student are perhaps 20-30 percent of tuition levels at better private schools. Even if faculty salaries are only one-third of instructional cost, tuition charges should more than cover the cost of instruction.

This earlier piece notes how Scholar Ship-s act as a form of Price Discrimination.