Washington Monthly - September/October 2014 - 33

These include Barnard (#65), Brandeis (#77), Northwestern (#78), Bryn Mawr (#110), Boston University (#169),
George Washington (#178), Carnegie Mellon (#186),
Reed (#197), and Northeastern (#215). One thing a lot of
these schools have in common is that they have raised
their admissions standards in recent decades to ascend
the prestige ladder. Another is that instead of giving
moderate-income students a break in price, they charge
prices that break their bank accounts.

The Endowment Hoarders
and the Endowment Deprived
Smart high school guidance counselors have long told
their high-achieving but lower-income students to apply
to schools with large endowments because those institutions have the money to offer better financial aid packages. To see how wise that advice is, and to make it easier
for students to follow it, we show each college's endowment funds per full-time student for every school on our
Affordable Elites list.
Sure enough, the numbers seem to bear out the advice, at least in general. Harvard can afford to charge
low-income families only $1,533 because it's sitting on

an endowment worth $1,240,548 per student. A 5 percent return on that money-and Harvard historically
has earned about 12 percent-would generate $62,027
a year, more than enough to cover the $59,950 sticker
price for a year at Harvard. It makes you wonder why
the school charges lower-income students any tuition
at all.
Contrast this to one of the "striver" schools, which,
owing to the recentness of their climb up the selectivity scale, don't have as many super-rich alumni to hit
up for donations. George Washington University's endowment, for instance, amounts to only $69,758 per student, one-eighteenth the size of Harvard's. That's one
reason (plus the state-of-the-art squash courts) GW
charges students from families earning $30,000 or less
$16,249 a year.
But the big endowment/big discount equation isn't
universal. Princeton and Yale both have even bigger endowment per student ratios than Harvard, but charge
low- and middle-income students double, triple, or quadruple as much. What's with that?
Robert Kelchen is an assistant professor of higher education in
the Department of Education Leadership, Management and
Policy at Seton Hall University.

AFFORDABLE ELITE
RANKINGS METHODOLOGY

o construct the Affordable Elites ranking, we started with the 224 colleges in our rankings with a
Barron's competitiveness score of "very competitive
plus," "highly competitive," "highly competitive plus," or
"most competitive." These colleges were then ranked on a
3-point scale on each of five measures reflecting access, affordability, and student outcomes, with the maximum possible score being 15 points.
Student loan default rates. This represents the percentage of students who took out federal student loans and
defaulted within three years of leaving college. A college received 3 points for a default rate below 2 percent, 2 points
between 2 percent and 4 percent, 1 point between 4 percent
and 6 percent, and no points for being above 6 percent.
Percent of students receiving Pell Grants. This is
a measure of effort in serving students of modest financial
means. A college received 3 points if at least 40 percent of
students received Pell Grants, 2 points between 30 percent
and 40 percent, 1 point between 20 percent and 30 percent,
and no points for being below 20 percent.
Graduation rates. This represents the percentage
of first-time, full-time students who graduated within

six years. A college received 3 points for a graduation rate
above 90 percent, 2 points between 75 percent and 90 percent, 1 point between 60 percent and 75 percent, and no
points for being below 60 percent.
Graduation rate performance. This measure compares the actual graduation rate between 2010 and 2012 to
the predicted graduation rate generated from a regression
controlling for student-level and college-level characteristics. A college received 3 points if the actual graduation rate
exceeded the predicted rate by at least 5 percent, 2 points
if the actual rate exceeded the predicted rate by between 0
percent and 5 percent, 1 point if the actual rate was below
the predicted rate by no more than 5 percent, and 0 points
if the actual rate was at least 5 percent below the predicted rate.
Net price of attendance. This represents the average cost of attendance students with family incomes below $75,000 pay after taking grant and scholarship aid into
account. A college received 3 points for a net price below
$10,000, 2 points between $10,000 and $15,000, 1 point between $15,000 and $20,000, and no points for being over
$20,000. -Eds.
Washington Monthly 33

Washington Monthly - September/October 2014

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