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How much did Yale spend to educate Tom Buchanan?

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This is the first of a projected series of posts on the economics of American higher education.

“Civilization’s going to pieces,” broke out Tom violently. “I’ve gotten to be a terrible pessimist about things. Have you read ‘The Rise of the Colored Empires’ by this man Goddard?”

“Why, no,” I answered, rather surprised by his tone.

“Well, it’s a fine book, and everybody ought to read it. The idea is if we don’t look out the white race will be — will be utterly submerged. It’s all scientific stuff; it’s been proved.”

“Tom’s getting very profound,” said Daisy, with an expression of unthoughtful sadness. “He reads deep books with long words in them. What was that word we ——”

“Well, these books are all scientific,” insisted Tom, glancing at her impatiently. “This fellow has worked out the whole thing. It’s up to us, who are the dominant race, to watch out or these other races will have control of things.”

“We’ve got to beat them down,” whispered Daisy, winking ferociously toward the fervent sun.

“You ought to live in California —” began Miss Baker, but Tom interrupted her by shifting heavily in his chair.

“This idea is that we’re Nordics. I am, and you are, and you are, and ——” After an infinitesimal hesitation he included Daisy with a slight nod, and she winked at me again. “— And we’ve produced all the things that go to make civilization — oh, science and art, and all that. Do you see?”

Tom Buchanan and Nick Carraway were freshmen at New Haven in 1910, if I’ve got my literary math right. How much did the school spend to turn them into Yale men?

The answer can be deduced from the following:

Yale’s endowment was $12.1 million in 1910. Assuming that 4.5% of this was expendable income that year, this means Yale’s total operating budget was $1,089,000, given that, according to this, the endowment that year generated exactly half the school’s budget.

How much is that in 2014 dollars? Using standard CPI inflation calculators, the answer is about $25.3 million. Yale’s total enrollment that year in all its various schools and colleges was 3,319 students, meaning that it cost $7623 per year, in 2014 dollars to enlighten Nick and Tom. (They paid about $3,000 per year, in 2014 dollars, for tuition and room and board)

One hundred years later, how much did it cost to bring their institutional descendants into the light?

By 2010, Yale’s endowment had grown to $16.7 billion (it was $23.9 billion in June of last year). This sum generated about $751,500,000 in expendable income, which in turn provided 41% of the school’s general fund budget. $751,500,000 is 41% of roughly $1.83 billion. In 2010 Yale had a total enrollment of 11,520, which means the school was spending, in 2014 dollars, about $172,030 per student. (In comments, Mal points out that you could properly back out the nearly 20% of the total budget that represents the operations of the medical complex, as these costs have only a very tangential relation to the cost of educating the vast majority of Yale students. So you might want to reduce that $172,000 to around $140,000). Yale technically charged its students $467,000,000 in tuition, but the school actually distributed 63% of that total — $295,000,000 — back to students in grants, which means that in 2010 the average Yale student paid $14,931, or somewhere around 8% to 12% of the total cost of his or her education, depending on various budgetary assumptions.

We shook hands and I started away. Just before I reached the hedge I remembered something and turned around.

“They’re a rotten crowd,” I shouted across the lawn. “You’re worth the whole damn bunch put together.”

I’ve always been glad I said that. It was the only compliment I ever gave him, because I disapproved of him from beginning to end. First he nodded politely, and then his face broke into that radiant and understanding smile, as if we’d been in ecstatic cahoots on that fact all the time. His gorgeous pink rag of a suit made a bright spot of color against the white steps, and I thought of the night when I first came to his ancestral home, three months before. The lawn and drive had been crowded with the faces of those who guessed at his corruption — and he had stood on those steps, concealing his incorruptible dream, as he waved them good-by.

I thanked him for his hospitality. We were always thanking him for that — I and the others.

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