"I am sure that Stanford has done it's sums and taken into account the net impact of attracting applications from bright students coming from less well of homes."
If you read the article, I think it's clear that Stanford has taken into account U.S. Senators questioning it's tax exempt status when it has a ballooning endowment along with big tuition increases.
I forgot where (Greenspun, I think) but the gist was that non-profits must disburse 5% of their endowment each year but these mega$$$ universities were doing more like 3.5%-5%. It's worth giving away free tuition to some middle class kids to maintain that status. Some of the endowments (Yale, Harvard, Standford, etc) are so big that they're basically investment funds that run universities in order to avoid paying taxes.
> Some of the endowments (Yale, Harvard, Standford, etc) are so big that they're basically investment funds that run universities in order to avoid paying taxes.
I think there is a fundamental difference: the investors in those funds are not making any profit. The managers are taking some fees (although even those are pretty modest, compared to what they could make running their own hedge funds and taking 2+20), but the endowments are either reinvesting all their profits or using them to benefit the university.
>Some of the endowments (Yale, Harvard, Standford, etc) are so big that they're basically investment funds that run universities in order to avoid paying taxes.
If that is what they are, then what is the exit strategy?
If you read the article, I think it's clear that Stanford has taken into account U.S. Senators questioning it's tax exempt status when it has a ballooning endowment along with big tuition increases.