Thursday, April 26, 2012


Harvard University has an endowment (i.e., savings account) of $31 billion (with a "b"). It also has a reputation as one of the top educational institutions in the world. If you study at Harvard, you are supposed to be getting one of the best educations you could ever get. The best faculty, the best resources, access to the best research materials...

Um, except maybe not. Apparently, Harvard can't afford the price tab for all if its subscriptions to peer-reviewed academic journals. The bill now runs $3.75 million per year -- and that's not because they're subscribing to a million journals, it's because some of those journals have five-figure subscription rates.

Two things stand out. One, the journals bump their prices, for both print and online content, because they have captive audiences. The modern university system requires professors to publish material in peer-reviewed journals in their different academic specialties -- probably the only place where most of that material would get published -- and so those journals can charge quite a bit more than Time or Newsweek do for the privilege of placing them on library shelves.

Two, Harvard is cheap. At the current cost, their endowment could cover subscribing to those journals until the year 10,279. The annual tab is .0001 percent of the endowment, which means if it earns a lousy passbook-level 2% a year the interest on this year alone could pay for the subscriptions until 2177.

But that might put Harvard back in the precarious position it had during the financial crisis of 2008-2009, when the endowment dipped to a belt-tightening $26 billion. And we wouldn't want that.

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