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.
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%.
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.
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.