I have a different perspective. Rather than thinking it's remarkable that they could do that back then, I think it's a disgrace that we can't do that today.

Harvard's tuition back then adjusted for inflation is around $18,700. Assuming 10 classes a year an using an average class size of 40 students (which is what Harvard reports), that's a budget of $74,800 per class. You should be able to run a college on that, even taking into account some overhead for libraries and such. Yet Harvard today charges more than twice that.

Harvard could afford to charge nothing for any of its students. However, by having a form of price discrimination where they gouge the wealthy, they then get to subsidize their low-income students, so that they don't have to miss out on as many of the non-economic opportunities that their classmates engage in, and still provide all the amenities (nice gyms, libraries, clubs and activities) that the upper-class students expect.

The issue is, after the most endowed schools ($/student), there is a steep drop where schools suddenly aren't able to provide the same opportunities for their low-income students, but still compete for students capable of paying in full. This leads to escalating costs, as schools construct nicer gyms, study areas and dorms, pricing out the mid-to-low income students.

With thier endowment Harvard could provide gyms, which aren't that expensive in the grand scheme of things, without gouging anyone. There is no good reason for an obstensible charitable non-profit to be engaging in tactics suited to an 19th century railroad monopolist. Also not every legal adult whose parents are wealthy have access to those resources.

Furthermore, you are letting them completely off the hook for exploding expenses. Check out the administrator to student ratio changes from 1960 to today. College payrolls are now stuffed to the gills with deanlings and deanlets with no educational purpose whatsoever.

I've had the impression that Harvard is very affordable for most applicants. They limit parental contribution to 10% at $150,000/yr, and require no parental contribution at less than $65,000/yr. And they do not bundle loans in there financial aid packages.

http://ofr.harvard.edu/site/policies-issues/financial-aid/

So that seems to me to say that if a family is in the bottom half of average household income, Harvard is free.

No families attend Harvard, just individual adults. Adults whose parents by-and-large are under no legal obligation to support them.

Right, but financial aid offices assume the parents will be supporting their children, and include that support in financial aid offers.

I just don't think we should be using Harvard as an example of the high cost of a college education when it seems to me that they are committed to making it affordable for their students.