Earlier this morning, University President Christopher Eisgruber ’83 announced a huge increase in student financial aid. Increasing student aid is one of the best uses of the University’s recent financial gains, hot on the heels of expanding the student body (which Princeton is also doing). But increasing aid isn’t enough — Princeton needs to take steps to drastically reduce its sticker price, if not eliminate tuition altogether. Tuition is totally unnecessary for university finances and by keeping its price high, Princeton is contributing to tuition inflation across the country where aid is not so plentiful.

Students may already know that the University does not rely primarily on tuition fees to fund its operations, but the numbers are staggering. In 2021, tuition and net fees — that is, student payments less student aid — made up a grand total of just under five percent of the operating revenue of the University. The total amount generated from tuition and fees, just over $100 million, is less than the over $300 million surplus that Princeton recorded in 2021. This means that Princeton could have reduced all campus-wide tuition while maintaining a budget surplus of approximately $200 million. We pay tuition out of a sense of tradition more than anything else.

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Now, the most obvious argument against eliminating tuition is that eliminating tuition would be a massive giveaway to the wealthiest families on campus. If Princeton is capable of being perfectly price discriminatory and gouging the rich out of every penny they could pay, why wouldn’t it? In The Harvard Crimson, Editor-in-chief Joel Sabando argued that Harvard tuition should be much higher: up to $1 million for the ultra-rich to pay the same proportion of their earnings as any other Harvard student.

But to view ultra-elitist college tuition as a method of economic justice is to miss the forest for the trees. Even if every tuition dollar has been put to good use at Princeton or Harvard, which is obviously not the case, that money benefits Princeton and Harvard students who already enjoy extraordinary benefits just by participating. If you believe the wealthy should contribute more to society, that money should be paid in taxes that benefit the average American, not in tuition at elite colleges.

You would think that every extra dollar counts, and if families can pay, they should. But that ignores the fact that Princeton contributes to an inflated college price market. Princeton is one of the best-known colleges in the world and its decisions have repercussions. If Princeton reduced the maximum tuition significantly, say even to just $10,000 per year, including room and board, our peer institutions would face enormous pressure to do the same, especially from middle-class students. graduates who have the most influence on the University. If our peers continued to raise tuition fees, they would be impacted by the metrics they care about most: number of applicants, US News and World Report rankings, and rate of return.

Other private colleges might have to start lowering tuition to match, and as tuition at private colleges begins to drop with a lot of press and fanfare, public colleges might start to feel pressure not to not charge well above the private options. The only tangible way to reduce tuition fees is to put downward pressure on the market. Currently, elite colleges charging exorbitant fees (even though they are mostly reimbursed in the form of aid) also allow other colleges to raise their prices. Princeton and Harvard can’t solve this problem on their own, but in a market economy, price signals from the biggest brands are sure to make a difference.

Let’s be clear about what lower tuition means for colleges across the country – it means lower costs. Princeton cannot rely on tuition to stay afloat, but other colleges do. The University of Virginia (UVA) credited 35.6% of its non-medical income toward student tuition and fees in 2021 and spends only 6.3% of its academic budget on student aid. If UVA were to reduce tuition fees, it would mean a substantial reduction in annual costs. Some statistics suggest that colleges should reduce their administrative costs. While bureaucratic red tape is undoubtedly a real problem, claiming that waste, fraud and abuse will be perfectly targeted by cost-cutting measures is naïve. The argument over bureaucratic bloat is also often tied to conservative criticism of “diversity deans”. Even if we wanted to eliminate these positions, we are not going to significantly reduce costs through DEI programs. If we reduce costs, the student experience will be affected.

It seems arrogant to sit at Princeton, with its massive endowment, and plot to make the student experience worse at other universities. But the truth is, students aren’t paying for an “experience,” they’re paying for a degree. University fees have increased because the degree is valuable enough that people are willing and able to pay for it through federally guaranteed student loans. But the “high tuition relief” model pioneered at Harvard and Princeton has contributed to a world where colleges compete more on amenities than on price, where colleges grab prices and taxpayers to guarantee money, and where generations of students are hobbled by mountains of debt. . Due to the market economy, other colleges have adopted high tuition, but not high aid.

We have at least some responsibility for trying to correct the situation.

Community opinion editor Rohit Narayanan, a junior from McLean, Va., promises his writing is worth exactly what you pay. For a base price of $40,000, you can email him at [email protected] (it will even read the email for an extra 10%). His @Rohit_Narayanan tweets aren’t cheap, but he does offer a very generous loan package.

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