Dear Columbia, Please Make Tuition Free For All Students

I am not an expert in the education industry but I have encountered three reasons that compel me to believe Columbia University (and its peers) should make tuition free for all students.
- Less than 25% of Columbia’s revenue comes from tuition (here’s the annual report). This means tuition as a source of revenue does not need to be central to the viability of the university.
- Increases in tuition continue to outpace family income. We’re speeding toward a future in which fewer and fewer families can afford elite higher education. While financial aid exists, it’s opaque and falls short of encouraging more prospective students to apply to elite private universities. The tuition model is broken and ripe for disruption.
- Columbia’s endowment is nearly $10 billion in size and earns $500 million annually (tax free). The wealthiest universities have large enough endowments to self-fund free tuition for all students.
So Could Columbia University really make tuition free?
Yes, and here’s why. Wealthy universities like Columbia aren’t being run with tuition dollars. There are four universities in America with endowments larger than $20 billion: Harvard, Yale, Princeton, and Stanford. The endowments are getting considerably larger. These schools are becoming wealthier and raising the cost of attendance.
With around 30,000 students, Columbia can afford to make tuition free for all students by pulling extra funds from its endowment or cutting back on non-education expenses. Even at an added cost of $1 billion per year to pay tuition for all students, Columbia could make tuition free for all students for at least 10 years. It won’t be easy to develop an annual budget without tuition dollars, but it will be inspiring and it will position Columbia as the leader in making top-tier higher education attainable for all prospective students in the United States.
But why would Columbia shrink its endowment or cut expenses to make tuition free for all students?
Let’s think long-term. There are a ton of benefits.
First, as a premier education and research institution, Columbia has a responsibility and a mission to advance knowledge and learning at the highest level. In order for Columbia to excel at its mission, the university must seek out the best students regardless of their economic situation.
However, that’s not what’s happening right now. Columbia and many other schools have a formula that makes their budget work. They must admit a certain portion of full-paying students to make up for the portion of students heavily supported by financial aid. It’s a bit of calculus that supports low income families but doesn’t go far enough.
The model is ready for disruption because it’s based on a budget and not based on attracting and admitting the brightest students. By re-engineering the budget to account for free tuition, the university can unburden itself of the complicated financial aid formulas. The admissions office will be better aligned with the university mission.
Second, the leaders at Columbia and other institutions must know the cost of tuition can’t continue to grow at alarming rates. By 2030, will yearly tuition at Columbia really exceed $90,000?
Here’s a look at Columbia tuition (excluding fees) from 1990 to 2010, and estimates based on conservative increases of 50% for 2020 and 2030:

The business model is not sustainable. If the advertised price (what the website says) and actual price (what students pay) differs so dramatically across the student body it will create an unhealthy division on campus.
Third, you might be thinking that Columbia will have a 25% gap in revenue if the university made tuition free. That’s true if nothing else changes. But, I bet the number and size of donations (and therefore the endowment) will grow if Columbia makes this inspired change before its peers. As a graduate of Columbia and someone who has not donated to the university in the past five years, I would become a donor to help support free tuition. More to the point, I believe the financial concerns surrounding free tuition can be solved.
Fourth, Columbia would receive the first-mover benefit — reputation and word of mouth. By leading the nation in the movement toward free world-class education, Columbia will be a preferred choice for many more students, which will increase the strength of its applicant pool and its yield.
Fifth, it will take much longer for government policy to solve this problem. Sure, there are free tuition efforts among many leaders in government. Examples include proposals from Bernie Sanders, New York Governor Cuomo, and Rhode Island Governor Raimondo, to name a few. However, these proposals are complex and the funding structure is similar to existing financial aid programs.
It doesn’t look like the private sector will solve it, either. Free online education (e.g., Khan Academy) falls short of creating reliable career opportunities for graduates. Many fintech companies have focused on re-financing student loans (e.g., SoFi, earnest, purefy) rather than eradicating most of the debt at its source.
The unique opportunity at this point in time is for a wealthy private university to self-fund free tuition for all students. Selfishly, I hope Columbia is the first mover. Or my other alma mater, the University of Michigan (which coincidentally also has an endowment near $10 billion).
But I’m cheering for all universities to embrace a new model that champions the importance of education, treats all applicants equally, and doesn’t bury many new graduates under an oppressive mountain of debt.
