Yesterday I brought up the topic once again of why you would choose to go to a fancy university. Stuart makes a good point in response that it can't just be motivation for deadlines that gets people to sign up, or there are plenty of non-fancy universities that you could go to. And I suppose people do.
Robert Shiller said in one of the early lectures in a course of his I am following on academicearth.org that Yale had more than $2 million per student in the endowment. I don't know how they weathered the crash last year. I presume not that well. But lets say the endowment halved. That leaves more than a $1million per student. You could retire quite comfortably on $1million. You could certainly provide free fancy education for 1 student for 4 years, followed by another.
If it were free... I guess I would struggle with why it was worth it less? There is still the opportunity cost to consider. But I reckon the true value of a year of education for someone early on in their career likely outweighs the cost.
I suspect it is not just the signal you are paying for. Stuart's other comment about the association with prestigious people... or rather the network it provides also has value. So you buy a network and a signal, and probably the opportunity to meet a spouse.
The network could be provided through new social networking tools. A forward thinking executive looking for high quality recruits could probably find them more effectively using those tools too. But maybe that is expecting too much?
I think if you strip away everything, one day... the only justification is that it would just be a great way to meet people in person. Maybe the expense is a cynical class filter?
The great thing is that the likelihood that it is the education that provides the value is pretty low. So sites like academicearth.org which essentially give away intellectual capital for free can continue to flourish while the organisations that support them survive.
I can live with that.