The average student at Harvard doesn't pay even close to actual tuition, most of the endowment is earmarked for student aid.

If I remember right, something like under 90k earned by the student's family, they pay nothing. I haven't worked there in 2 years, so the math is a bit fuzzy but the concepts are accurate.

while most students do pay much less than sticker price, saying 'most of the endowment is earmarked for student aid' feels misleading. in fy2019 harvard spent $193M on student aid (https://finance.harvard.edu/files/fad/files/fy19_harvard_fin...) -- compared to a $5.2B operating expense spend and a $41B endowment size.

> in fy2019 harvard spent $193M on student aid

That is only undergraduate aid applied directly to tuition. Per Note 12 on page 43, "Total scholarships and other student awards" was $613,243k, of which $457,639K was in direct credits to expenses.

That said, I don't know where the GP got the idea that most of the endowment is earmarked for financial aid. Per page 11, that earmark is specifically 19%.

Endowment paying operating expenses is essentially financial aid, because it's a cost that is not passed on to the students.

A conservative 3% of endowment would be the expendable return. So about 1.2B? Wouldn't be surprised if 193M is the largest distinct chunk of that.

they have other operating income, e.g. tuition from everyone else, and are consistently doing capital raises. the single largest chunk of spending goes to employee wages (approx $2B); in fact, the $193M number is the smallest of all the line items in operating expenses.

as another comment points out, some of the salary and wage spend could be considered part of 'financial aid.'

Yes, but for the 50% of students that are not on financial aid, this must be pretty galling. These students may be rich, but a lot of them are not multimillionaire-rich. Even a family earning 200k a year will feel the pinch.

Many students would be much less willing to go to college if it was online only, and would instead take a gap year or do something else. If you can keep them hooked until after the tuition is billed and after the refund period expires, and then transition online, then you get that money which you would not otherwise get (now). This entire thing seems a bit like a conspiracy theory, but American universities are pretty greedy so idk. I've just accepted that I'm paying for the diploma so I personally won't mind if the classes are online for the same price - less time wasted in useless lectures, and I've already done much of the networking & connection building part of the experience in past years.