I have previously touched on the subject of higher education and the astounding tuition cost at leading U.S. universities (US$30,000 - $40,000 per student per year at Ivy League colleges in 2009–10). As such, education has to be regarded as a business proposition by both students and the schools themselves. Students make an investment to attend in the hope of qualifying for well-paying jobs after graduation, while universities count on continuous donations from alumni to keep themselves going.
Embracing this simple equation is the first step in universities shedding the false sanctity of outdated traditions in favor of asking such timely questions as: How can we create a model that minimizes the costs and maximizes the return for both students and universities simultaneously? How can we best enrich the lifestyles of our students in a way that they are not saddled with burdensome debt as soon as they graduate? How can we become market driving rather than simply market driven in order to attract the greatest pool of talented students? These are bold questions, indeed.
As a recent article from The Street points out:
As tuition costs continue to mount at universities across the nation, some colleges are sitting on mountains of cash.
And while some of that cash goes to regular campus operations or scholarships for students with financial need, many schools don't really use it at all, investing the money to fund big future projects. And sometimes, when the economy tanks, the money simply gets lost in the market.
With a $32 billion endowment last year, Harvard is the richest institution of higher education in the U.S.
Private schools rely on alumni and corporate sponsors to raise funds for the school's endowment fund, and while some endowments face restrictions in how money gets spent (as in some donations can be spent only after a certain amount of time, or can be invested only so as to use the profits, not the capital), many leading universities have taken criticism for collecting the money and sitting on it while raising costs for students.
For an unconventional solution to align the interests of universities and students, have a look here.
[Image via BPM Redux.]