In a live‑recorded YouTube monologue, Michael Horn expands on his Forbes article arguing that Harvard’s dramatically expanded financial‑aid program is unintentionally pressuring small colleges toward closure. He notes that Harvard’s sticker price (~$70,000) is offset for most families by need‑based aid, making the net cost comparable to or lower than many state schools. This creates a competitive disadvantage for small, tuition‑dependent institutions that lack massive endowments. Horn cites Newberry College’s imminent shutdown as a concrete example, explains how such schools rely on merit‑based tuition discounts to preserve rankings, and highlights the unsustainable nature of this model. He then details the concentration of endowment wealth—about 11% of U.S. universities hold roughly 75% of the $500 billion pool—and the paradox of rising total alumni gifts but declining donor participation (only 18% of private‑college alumni give). Large gifts flow to elite schools (e.g., Bloomberg’s $1.8 billion to Johns Hopkins), reinforcing a cycle where elite institutions become more affordable for low‑income students while small colleges lose financial viability. Horn concludes that while Harvard’s aid expansion benefits its recipients, it also contributes to the broader demise of many small colleges.
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My first time doing a live recording for YouTube, and it's on the topic of whether Harvard is killing small colleges. It's the topic of a piece for Forbes that I wrote today, and I think it's a provocative one because small colleges are certainly hurting across the country. We know that's thanks to a variety of factors, from the collapse of their business models to demographic pressures, and in some cases to disruptive innovations in the form of faster and cheaper options that are emerging. And against this backdrop, you have places like Harvard that have increased financial assistance dramatically over recent years, such that now at many institutions like Harvard, you actually would pay less to attend them than you would your local state university. So just think about that for a moment. Harvard university costs over $70,000 to go. That's tuition plus room and board. According to Harvard, 90% of American families would pay or less to send their children to Harvard as they would a state school. 90% of American families, if you make under $65,000, literally would not pay a dime. And Harvard is increasingly not an exception. Now. That financial aid dynamic has put a large pressure on small colleges that lack large endowments. For example, Newberry College in the New England area, where I'm broadcasting to you right now, it announced that it will close at the end of the academic year. And in this most recent year, it charged over $47,000 in tuition plus room and board. Now that feels increasingly untenable in an environment where Harvard might be as low cost as a state school and a state school is going to be far less cost than Newberry College. And you might say, why would I go to place that doesn't have the brand distinction, it doesn't have the reputation. And why not just go to a state school and have that experience or try to go to an elite institution? If I can't get in there, go to an open access public. Now as a result, obviously, small colleges have been trying to combat that, and they do it. So by discounting tuition, that basically means give scholarships. But they often do so based on merit, not on financial need. The reason that they do that is they want to maintain the academic quality of their class so they don't decline in rankings like U.S. news and World Report, which means they leave more money on the table because some of those students getting merit scholarships could clearly pay more money. So this tuition discounting is. It's just increasingly untenable in an environment where costs are continuing to rise and they just don't have the endowments, alumni gifts and other sources of revenue to paper over the difference. Now, most of the nation's universities, this is the interesting thing, fall into that category because most colleges lack the large endowments that places like Harvard, Stanford, Yale, Princeton boast. In fact, just 11% of universities hold roughly 75% of the nation's endowment value of $500 billion, roughly, which means most institutions, they're falling in the have not category now, although the other source, of course, you might say, well, why doesn't a place like Newberry College raise money from its alums? The reality is that while alumni giving in the aggregate in terms of just dollar amount, that's going up, it's up 14.5% from the year prior to over $11 billion. But the number of alumni who gives is actually much, much smaller than it's been ever before. Fewer younger alums give than ever before. Only 18% of private university alumni give, period. So what it means is we're actually getting larger gifts from fewer numbers of people. And those large gifts typically go to elite institutions like Harvard or, say, Johns Hopkins that got $1.8 billion gift from the former mayor of New York, Michael Bloomberg. All that dynamic creates a cycle where the rich get richer, the poor get poorer. Not arguing that Harvard should do anything different. It's great when they expand access to people who can't afford Harvard, but it's certainly hurting small colleges. And it's contributing, not the contributor, but it's contributing to their demise.
