The conservative Center for College Affordability and Productivity has a great post up explaining why we shouldn’t be overly impressed by Harvard and Yale’s recent decisions to spend more of their massive endowments on financial aid.

While there is a lot of guess work about the limitations placed on endowment funds by donors, they estimate that Harvard could easily afford to do away with tuition all together: 

Even if Harvard gave all of their undergraduates a free ride the school wouldn’t come close to spending even half of the interest it is receiving on just the aid-restricted portion of endowment. The full cost of allowing all undergrads to attend without any tuition, fee, or room and board costs would be $306 million. After deducting that amount the remaining $6.7 billion will still earn at least $584 million.

There is of course some thought that these changes might be a response to the increased scrutiny of college stinginess with massive endowments has gotten in Congress and beyond. Most private foundations are required to spend at least 5% of their endowments, but colleges are exempt. Even during good years they usually end up spending less.

Either way, both universities should get some applause for expanding their financial aid programs, and hopefully other schools will follow their example (hint, hint University of Texas). But maybe we should hold off on the standing ovation for now.