Post here, but what I found most interesting was this comment:
Beyond the specifics of the endowment issue, the larger perverse issue here is that in education you normally see bigger returns to investment when you work with less-prepared students. The kind of students who are in pretty unselective programs at non-flagship state university campuses, in other words, would benefit a lot from having more money spent on them. The students who are already doing well enough to get admitted to the fanciest schools — private and public — don’t really need the extra resources. But higher education is systematically structured so as to ensure that those who are in the least need get the most.
I’m not convinced this is true. In The Bell Curve, Herrnstein and Murray argued quite the opposite — that our future depends on high-IQ elites, and that educating them, rather than trying to bring the below-average up to average and the average to above-average, ought to be our highest priority.
Now, it’s true that Harvard students will rarely go unemployed, where that might not be the case with students at lower-tier schools. So as a matter of “need,” Yglesias might have it right, and these students might get the most out of extra effort. (Emphasis on might – Yglesias presents no evidence that “lesser prepared” students are knowledge sponges that were denied access to information in high school, rather than simply less able/less motivated students.) But I’m unsure that this is necessarily a “perversion” of incentives in higher ed.