Elite Colleges are Where Kids and Parents Shell Out to Support the Adults

In the wake of Harvard University’s ongoing lawsuit against the Trump Administration over entitlement to government funds, commentators note that Harvard has seemingly unlimited money to spend and can afford to pay for their students 50 times over. And in the case of Harvard, they might be right. A $50 billion endowment, however, may make up the special case of a single university, but it doesn’t make up most of our other colleges in America.

Most colleges, even those with billion-dollar endowments, have to worry about finances. As this famous graph shows, college tuition has skyrocketed over the past 30 years at over three times the rate of inflation. And although colleges promised significant financial aid to students, they regularly do not fulfill such promises when push comes to shove.

Here is the widely-shared graph that is consistently bonkers every time you look at it: pic.twitter.com/pwDNAGlEyR

— Kenny Xu (@kennymxu) July 30, 2025

Administrative head counts in the University of North Carolina system have increased by 15 percent in 10 years, faster than both faculty and student numbers. At some private universities, the problem escalates. Davidson College, which boasts a $1.6 billion endowment, has a faculty to administrator ratio of 1:4, meaning that for every faculty member at Davidson, there are 4 administrators, which is higher than most Top 50 colleges—but only a bit, as the average for Top 50 schools is 3 to 1.

When universities don’t cut costs the way for-profit companies do, then parents or the students themselves are burdened with higher costs at an age where the marginal value of college is increasingly questioned, and it is unclear that men with bachelor’s degrees even outearn men without them.

This puts an increasing premium on controlling costs when making decisions to go to college—or what type. For a long time, universities have used clever psychological tactics to convince families to shell out for expensive degrees. The first is Early Decision, a tactic that should be illegal, where a university gives an “early offer” to a student in exchange for a binding commitment from the student that he would attend the school if accepted. This also has the often-ignored effect of giving the university leverage in providing aid to the student. A student applying early decision to a school may not receive an award he otherwise would if he applied regular decision, because the school gives the impression that their decision to go to that school is “binding.” (It is not, but the threat of university action against the student is often compelling enough to scare families.)

On August 8th, concerned parents finally sued these elite Ivy League colleges for conspiring to increase costs using the Early Decision process. We should support this lawsuit and bid goodbye to inappropriate university price-gouging that has gone on too long.

Shaking Down Students

A second tactic universities use to “shake down” students and their parents for more money is underestimating a student’s cost of attendance. Universities almost never account in its marketing materials for the average of 5–7 percent increases in tuition for most Top 50 universities in the 2020s. This leads to a fourth-year experience at a university becoming 25–35 percent more expensive than the first—and results in feelings of betrayal and desperation for students.

Davidson College, a college that I work with as the head of Davidsonians for Freedom of Thought and Discourse, goes to extreme lengths to do this: in a commitment called “The Davidson Trust,” the university promises to new students a college experience where “100 percent of demonstrated need” is met through grants, scholarships, and work study programs—not loans. A debt-free college sounds shiny and great—and it is just that, a shiny object that gets many Americans who are above the income radar for Pell Grants but still in places of financial insecurity applying for the elite liberal-arts college. Then Davidson rips out the rug from under them: their “demonstrated” need is almost never what the student was expecting, leaving some Davidson students to muddle through loans and families questioning the value of their education.

Then there is the broken FAFSA (federal student aid) system. Savannah, a graduate of Lenoir-Rhyne University in Hickory, NC, tells me that FAFSA, the federal outlay for student aid, promised aid to her family but ultimately concluded that her stay-at-home mother and middle-class father could afford to pay over $50,000 a year for her college expenses, thus making college aid a dream for her for most colleges and debt a practical necessity for her to go to college.

Thus, because of the normalization of college, a college education becomes an extra tax on the middle class and the upper-middle class, and hamstrings their employment possibilities by forcing them to take jobs that pay their debt bills rather than do what incites their passion.

With few exceptions (like Purdue University, which hasn’t increased tuition in 10 years), the sticker price of college tuition has risen exponentially year over year, and the combination of broken government aid and broken college promises lead to the current student debt crises, currently $1 trillion-plus, while universities sit on tax-free endowments that make “non-profit” schools some of the richest entities in the nation.

Then they spend any extra revenue excessively, wasting their gains. According to their public 990 tax form, Davidson’s 4 percent increase in revenue from their increases in tuition is immediately offset by their 9 percent increase in staff expenses year over year (based on 2022–2023 data).

Universities do have an incentive to stop spending. They just don’t see it. They need to understand that Gen Z students, who are a product of the most information-heavy generation ever, don’t need so much of the “cultivated experience” as they do the freedom to roam and move about as they please, and the autonomy to attack issues with their own minds. Part of that freedom is the serenity to not worry about paying off college tuition or student loans, and universities heavily contribute to that generation’s financial anxiety by charging them and their parents to provide a cultivated experience that they know will not linger past their 4 years in undergrad.

Students need and deserve a good college experience—of which a major part is financial serenity. Universities need to make cutting tuition an aggressive priority for Americans’ broken trust in higher education to make a comeback.

(READ MORE: Will Universities Stop Bullying Students for Exercising Their Free Speech Rights?)