Why Is Harvard So Expensive? - YouTube

When you think of Harvard University, your mind  probably conjures up images of beautiful historic  

buildings, illustrious professors pacing the  hallowed halls, and preppy students lounging  

on manicured lawns. Sure, a degree from Harvard  is valuable, but is it really worth the cost?  

Why is Harvard so expensive anyways, and what  exactly do you get for all that tuition money?

We can’t talk about the outrageous cost of an  elite Harvard education without first taking  

a look at why a college degree is so expensive in  general these days. For the 2018-2019 school year,  

students at private 4-year colleges paid an  average of $35,830 per year for tuition alone,  

meaning a typical 4-year degree costs nearly  $150,000! Add in other costs like books and  

supplies, room and board, and you’re  looking at a whopping $48,510 per year,  

or nearly $200,000 for an undergraduate  degree. The good news is that scholarships  

and financial aid do help to ease the burden on  students - when these programs are factored in,  

the average tuition cost is actually more  like $14,610 - still not cheap, but it helps!

The bad news, though, is that the cost  of a college education has more than  

doubled since the 1980s, and the  trend shows no sign of slowing down.  

More Americans are pursuing higher  education these days than ever before,  

thanks in large part to generous government aid  programs, and schools are struggling to meet  

this surge in demand, especially as state  funding fails to keep up with enrollment.

Oddly enough, the very programs that are meant  to make education more accessible may actually  

be a big part of the problem of skyrocketing  tuition costs. It’s not a new idea - back in 1987,  

then Education Secretary William J. Bennett first  ventured the theory that government programs like  

Pell grants and subsidized student loans actually  incentivize schools to raise tuition fees  

and further fuel the rise in tuition costs.  The Bennett Hypothesis, as it’s now known,  

holds that schools, knowing that the students  have access to vast amounts of funds through  

these programs, raise prices to capitalize on  available funds; rising tuition costs trigger  

further increases to financial aid, and on  and on the cycle goes. It’s no wonder, then,  

that in 2018, Americans owed more than  1.5 trillion dollars in student debt.

To accommodate more students - and capitalize  on aid programs - schools have to account for  

increased faculty needs and be continually  expanding their facilities. And since schools  

are competing for students - and tuition  dollars - these new facilities need to be  

state of the art. Students today expect the best  research facilities, the most comfortable dorms,  

and the most modern recreation  facilities to consider parting  

with their (usually borrowed) tuition dollars.

As if that weren’t enough, today’s  students expect an ever-increasing  

array of services from their college  in exchange for their tuition dollars,  

too. Between campus health care programs, academic  and personal counselling services, and of course,  

thriving campus social amenities, operating  costs continue to climb as fast as tuition costs.

Worst of all, as the cost of  an education continues to soar,  

a college degree is less valuable now than it  was even just 10 years ago. Simply having a  

degree no longer gives you an edge. With more  and more people pursuing higher education,  

a degree has become a standard requirement for  most entry level jobs and competition is fierce.  

Now more than ever, where your degree  is from can make all the difference.

This is where the country’s elite  institutions of higher learning come in.  

The Ivy League is an exclusive group of 8 of the  country’s most elite colleges: Brown, Columbia,  

Cornell, Dartmouth, Harvard, Princeton, Yale and  the University of Pennsylvania. These institutions  

had been around for generations before the  term Ivy League was coined in the 1950s,  

and you might be surprised to  learn that the nickname had  

nothing to do with the elite schools’  exclusivity or academic prowess. No,  

the Ivy League was initially an NCAA (Narrator:  pronounced “N-C-double-A”) athletic conference.

Nowadays the term has less to do with sports  and more to do with prestige and high admission  

standards. And while it’s true that the “Ivies”  have rich academic histories, high standards and  

consistently rank in the top 20 of the country’s  colleges, that doesn’t mean they don’t face stiff  

competition from outside their ranks - Stanford  University and MIT both beat out the Ivies to take  

the top 2 spots. Still, rankings aside, a degree  from an Ivy League school carries a certain caché,  

and may provide some real-world benefits too -  studies show that Ivy League grads can expect  

to make 15 to 50% more in their first year  out of school than the average graduate.

Even among the elite Ivy League schools,  there is one that stands out as the most  

prestigious of them all. Founded in 1636,  Harvard University is the country’s oldest  

institution of higher education. Harvard’s  historic 5,400-acre campus in Cambridge,  

Massechusets is home to 14 museums filled  with priceless art, artifacts and specimens;  

it hosts the world’s largest academic  library with more than 20 million volumes;  

and, the campus boasts some truly stunning  examples of historic architecture - like  

Harvard Hall, the oldest surviving  building on campus dating back to 1720.

In addition to an historic campus and an idyllic  academic lifestyle, there are plenty of solid  

reasons why Harvard is so elite - and therefore  so expensive. Harvard is currently the 3rd  

highest-ranked college in the country, and the  highest-ranking Ivy League school. Of course,  

to attract the top students, Harvard needs to  have the best professors and academics - and  

pay them Ivy League salaries. From the more  than 40,000 applications received each year,  

less than 2,000 are admitted, meaning Harvard  sends out 19 rejection letters for every 1  

acceptance letter. Harvard has fewer than  7,000 undergraduate students and only 13,000  

graduate students. The highly selective  nature of Harvard’s admissions process and  

the small class sizes mean that students get more  one-on-one time with their world-class professors.

The prestige of having a Harvard degree on  your resume alone may be enough to beat out  

the competition for most jobs, but the true value  of a Harvard education comes from the connections  

students make while they’re at school. There  are more than 371,000 living Harvard alumni,  

many of whom remain connected to the school for  life. Harvard has turned out 49 Nobel laureates,  

32 heads of state, and 48 Pulitzer Prize winners,  

so students are in good company, to say the  least. It should come as no surprise, then,  

that the average mid-career salary for someone  with a Harvard undergraduate degree is $142,600.

After learning how much the  average college education costs,  

and how prestigious a Harvard degree  is, you’re probably anxious to learn  

how expensive a degree from Harvard  is. Well, prepare to be shocked.

On their website, Harvard claims  that, for 90% of their students,  

attending Harvard is actually less expensive  than attending state school would be.  

If that sounds unbelievable to you, stick with  us and you’ll soon see how that’s possible.  

Plus, when you find out what the other 10% pays,  you’ll be in a whole different kind of disbelief.

Attending Harvard may indeed be “less expensive  than state school” for 90% of its students,  

but you can’t just “decide” to go to Harvard  because it’s cheaper. Admissions are incredibly  

competitive, and only the best of the best are  granted admission to this most exclusive school.  

Nevertheless, if you’re some kind of genius  or prodigy and manage to be one of the very  

few people granted admission to the  prestigious Harvard University, their  

generous financial aid truly can make Harvard  more affordable than your local state school.

Harvard claims that their admissions process  is needs-blind, and that low-income students  

have the same chance of acceptance  as students from wealthier families.  

That very well may be true  once the applications are in,  

but that doesn’t mean that low-income  students have the same opportunities  

to earn the grades and extracurriculars  needed apply to Harvard in the first place.

The fact is, Harvard is undoubtedly an elitist  school. The median family income of Harvard  

students is $168,800. 67% of Harvard students come  from households in the highest 20% of earnings;  

15% of students come from households in the  top 1%. Researcher Raj Chetty - from Harvard,  

no less - has found that students from families  in the top 1% are 77 times more likely to apply,  

be admitted to, and attend an Ivy League school  

than students from families with an  annual income of less than $30,000.

For those lucky few who do gain acceptance,  Harvard has a generous geared-to-income  

financial aid program in which tuition fees  are adjusted based on your family’s income.  

If your family makes less than $100,000 a  year, you might only have to pay about 10%  

or less of your family’s total income for  tuition. So, if your parents earn $100,000,  

you could go to Harvard for just $10,000 a year.  But it gets better. If your family makes less  

than $65,000 a year, your tuition is absolutely  free. That’s right, 100% free tuition. Of course,  

you still have to factor in room and board,  living expenses, and textbooks and supplies,  

but we can see how Harvard can be a  “cheaper” option for some lucky brainiacs.

For the “unfortunate” 10% who don’t qualify for  Harvard’s tuition reduction program, a degree from  

Harvard definitely doesn’t come cheap - although  we have a feeling that most of them can afford it…

For the 2018-2019 school year, standard tuition  at Harvard University was $46,430 for tuition fees  

alone - that’s 30% higher than the national  average of just over $35,000. With room and  

board in the campus’ historic dorm facilities,  you’re looking at a cost of $67,580 a year,  

and once you add in books and living expenses, the  average annual cost to attend Harvard University  

is a whopping $78,200 a year. A 4-year  degree from Harvard will cost you  

$185,720 for tuition alone, and you’re  looking at $312,800 all-in. Ouch...

If you thought that was steep, Harvard isn’t even  the most expensive school in the U.S.! That honor  

goes to Columbia University, where annual tuition  alone will cost you more than $57,000 dollars a  

year, and that’s not even taking into account  the high cost of living in New York City.

And just for a little perspective, it would cost  an American student only $30,000 a year to attend  

England’s most prestigious institution,  historic Oxford University. Tuition for  

British students is just over $11,000 per  year. Maybe the Brits are onto something...

Now that you know how expensive Harvard  is - and how many students get deeply  

discounted or even free tuition -  you might have some questions. Like,  

how can they afford to give out free  tuition? Where does all the money come from?

Harvard earns an income of nearly $5 billion  dollars a year, but their operating expenses  

are at least equal to that amount, so they require  alternative sources of income to keep the school  

thriving. Thanks to exorbitant donations by alumni  and wealthy benefactors, Harvard has amassed a $39  

billion dollar fortune in its endowment fund.  Harvard spends less than 5% of the endowment  

funds per year on campus improvements and tuition  reduction programs, and the rest of the fund  

is reinvested and expertly managed to keep it  growing for the future. Harvard is not the only  

school with such a fund - there are more than $600  billion dollars in endowment funds in the U.S.,  

although most of the wealth rests with a  handful of the country’s wealthiest schools.

Between cutthroat competition for admissions,  a prestigious reputation and some of the most  

successful alumni in the world, it’s easy to see  why Harvard is so expensive. Generous financial  

aid programs may make a Harvard education cheaper  for low-income students, but for the rest,  

be prepared to pay a high price for the  honor of calling yourself a Harvard grad.

If you thought this video was eye-opening, be sure  and check out our other videos, like this video  

called “Why Is Caviar So Expensive?”; or,  you might like this other video instead.