diet coke for breakfast

Friday, February 20, 2004

Posted by Tanstaafl
The Stanford Daily Online Edition:

Though such press releases often cite factors beyond the University?s control for the tuition increases, the blame on these external scapegoats can seem contradictory. Last year, the explanation attributed the increase to ?the downturn in the economy.? This year?s explanation turned to ?inflationary pressures,? which always accompany the noted ?improvement in the overall economy.? This inconsistency leaves students wondering about the extent to which the economy or other outside factors truly affect tuition increases.

These aren't inconsistencies. The economic downturn hurt revenue (probably mostly from investment income on the endowment), but there was no deflation, so costs stayed the same. The inflation this year increases costs. The question is, has revenue come back at all? I would hope so, but its hard to say. What it really sounds like they want is either Stanford's budget or an annual report like a public company would file. But Stanford's not a public company and is therefore under no OBLIGATION to publish such a document, although it very well may issue one. What these students fail to understand is that tuition, like any price, is just as much a function of demand as it is of cost.

As for the analysis about marginal financial aid, they've got a screwy way of looking at it. First of all, Stanford set up the system to work this way, and if it pays tuition past a certain level of need, then those who can least afford the tuition hikes will be those who get financial aid first.

As I'm writing this, it sounds an awful lot like the federal tax system. These same people writing this editorial are all for tax increases on the rich to pay for social services for the poor. They balk at tuition increases for themselves though, even though much of that money goes to financial aid. Guess it's a bit different when you're the one being "taxed" isn't it?


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