Estimating the cost of bad investments, or how much did the Church lose on you?
The NYTimes recently mentioned the Fermi game of figuring “ballpark” estimates of real-world numbers for questions you, at first glance, think of as un-estimatable â€“ for example, how many piano tuners are there in Chicago?
Though I am generally bad at math (and shun it), I like this game, and it occurred to me to try to generate a ballpark figure for how much the LDS Church has lost in BYU grads who have become life-long non-tithepayers.
Here’s my estimate of the most basic, upfront parameters of what you would need to consider, and the conclusions you might draw from them. Of course, there are lots of refinements you could consider â€“ which might significantly change the outcome â€“ but I think it’s fund to get an estimate of a starting point.
So â€“ How much did the Church lose on you, you dead-beat BYU grad?
Current tuition at BYU (for members): $1,920 per semester â€“ let’s round up to an even $2K, because I’m bad at math. So make that $4K per year tuition.
Suppose the LDS Church subsidizes BYU education at a level of 90% (using as a constant today’s dollars)
The cost of each year of college is about $40K (that’s approximately in line with the cost of other private colleges today)
Subsidy for each student each year of education: $36K
Cost to the LDS Church for your BYU education after 4 years: $144K per student.
Average salary of a college graduate: $50K per year
Average lifetime salary of a college graduate: $2M
Full tithe (10%) of that [pre-tax?] income: $200K (paid in installments over 40 years)
[Feel free to plug in different numbers if you think you have a better estimate.]
If every BYU grad (including lifelong homemakers!) paid full tithing on their pre-tax income for their whole lives, BYU might just barely break even on their investment (depending on how you calculate interest over that 40 years).
However, suppose instead of directly subsidizing BYU, the LDS Church made “loans” to each student equivalent to the cost of the subsidy — $36K per year. Credit against the “loan” would be taken from the individual’s yearly tithing contributions.
Thus, if you become a deadbeat grad, and don’t pay any tithing, you would have to pay 100% of the loan back directly to BYU.
What do you think would change about the financial health of the university, and what would happen to the cadre of BYU alums, and to its intake of new students?
Best value: attend BYU as a non-member.
Cost of non-member tuition: $4K per semester, $8K per year â€“ but with no obligation or expectation to pay back Church investment in subsidizing education. Sweet!
Now consider this, from the BYU website for 07-08 tuition schedule: “Students are considered members of the Church if they have been baptized at any time during the semester or term.”
Bonus: become baptized on the last day of class and get a $2000 rebate for that semester (but a life-long guilt-trip that you are now obligated to pay tithingâ€¦..)