Sunday, November 25, 2012

A Profit Opportunity?

There is a lot discussion lately of whether or not Federal subsidies to student cause tuition to rise and by how much. (here is one) The discussion extends to who captures the additional money that goes into the system and why the state universities are not lowering costs.

Harvard is awash in money, they charge tuition $30,000/year.  Harvard is quite a profitable not-for profit and yet Harvard has not increased its enrollment to even keep up with population growth let alone an additional amount for the fact that more people attend school longer.   If they did they could probably increase the bottom line but they are run by people that has other things in mind.  They are among the top hand of Universities in the world and are determined to keep that prestigious position.  They also know that the way to maintain that position is to reject a lot of well qualified students only taking the some best of the best.

I think that you that you could provide education some majors for as low as $2,000/year.  For example there are many well qualified, would be history professors with phd's available at fairly low cost, lets say full compensation of 70,000/year.

The obstacle is that to get respected a university needs to get enough applications from good students so that they can reject most of them and still fill the school.  That takes reputation and that is difficult to get.

A long term might be to hire some famous professors and start a school that charges no tuition.  This would allow you to attract some of those students that you need.

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