‘Harvard Is Really A Tax Free Hedge Fund’December 8, 2012 2:50 pm
Well, this argument has been made in the past – but we had never thought of Harvard this way really. But if you read the arguments, then that is what Harvard really is, a tax free hedge fund.
“Thus, over the last two decades, total tuition income (in current dollars) has increased from about $150 million to almost $250 million, with a substantial fraction of this list-price amount being discounted in the form of the university’s own financial aid to the families of its less wealthy students.
Meanwhile, during most of these years, Harvard’s own endowment has annually grown by five or ten or even twenty times that figure, rendering net tuition from those thousands of students a mere financial bagatelle, having almost no impact on the university’s cash-flow or balance-sheet position. If all the students disappeared tomorrow—or were forced to pay double their current tuition—the impact would be negligible compared to the crucial fluctuations in the mortgage-derivatives market or the international cost-of-funds index.”
Source: The American Conservative