# 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

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.]

Conclusion:

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).

Proposition:

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.

Question:

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?

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Appendix:

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€¦..)

### 10 Responses

1. Craig says:

Now consider this, from the BYU website for 07-08 tuition schedule: â€œStudents are considered members of the Church if they have been baptized at any time during the semester or term.â€

That’s just CREEPY!

How desperate they are for converts, they actually will pay BYU students to become Mormon.

I know the church has lost a hell of a lot of money investing in me and lots of my friends who have left or are going to leave the church as soon as they graduate.

But neither of my parents went to BYU and they’ve already easily paid off that extra \$36,000 if anything, the church owes me MORE money.

2. Hellmut says:

The baptism thing is a real dilemma. I think it makes sense to charge less tuition to members. But on the other hand, it is not desirable when people convert for the wrong reason.
Religion ought to be a manner of conscience, not money. Besides, people are going to game the Church, of course.

3. chanson says:

Craig — that is so funny, I was thinking exactly the same thing.

My dad, who was a convert and not a BYU grad — tithed a pretty non-trivial chunk o’ change over the years as CTO of a major telecommunications firm. I wish he’d put that money into a college fund instead. The four of his five kids who went to BYU would have been able to afford their pick of schools, and would probably have gotten a better education for it.

4. Hellmut says:

BYU is actually a pretty well run school with a large share of excellent teachers and students.

5. profxm says:

What about subsidizing missions? As a non-BYU grad I’d like to think I cost the LDS Church something now that I no longer pay tithing. 🙂

Anyone know if the LDS Church subsidizes Mormon missions to a great degree? I’d have to add up how much I paid in tithing over the years to see if I came out ahead in the end, but I’m guessing the answer is no.

6. chanson says:

BYU is actually a pretty well run school with a large share of excellent teachers and students.

True, it’s not bad (despite a certain lack of academic freedom, firing profs for personal political views, etc.), but let’s get real: it’s not Harvard, it’s not even “the Harvard of the West” as they say. Putting away 10% of your income adds up to a sizeable amount as the interest accrues, and I know my parents were paying more than 10% of a sizeable income. I’m certain I could have gone to a better school, and, frankly, it would have been nice to have been given the opportunity to make such a choice for myself.

OTOH, if I hadn’t gone to BYU, I never would have had the material to write this fabulous story, so I guess it’s a wash. 😉

7. chanson says:

p.s.: I should temper my comment a bit here.

I’m not bitter about having gone to BYU, and I don’t regret it (even though it was fairly traumatic at the time). It was definitely a unique learning experience, and I had the opportunity for a completely different type of educational experience later in grad school at Rutgers.

But who knows? If I’d had the opportunity to go somewhere else, perhaps I’d have chosen something equally unique and perhaps better…

8. Seth R. says:

profxm,

I think the Church standardized monthly mission payments across the board. Before, the missionary or his/her family had to assume the full cost each month. Thus the families of missionaries sent to France had to pay far more than those with an elder in Mexico, or the Philippines.

To correct this, the Church calculated an average cost and now everyone pays the same. So hopefully, it evens things out.

That said, I have it on good authority that it cost the Church about 7 thousand dollars to move its missionaries out of a certain apartment in suburban Kumamoto, Japan. The apartment had hosted male Mormon missionaries for over 6 years, and believe me, it showed.

So, take that for what it’s worth.

9. Sabayon says:

Where are you getting this 40K figure? Non-mormon tuition is only twice what Mormon tuition is*. Makes you wonder how much of BYU profs income is paid in “blessings” and “eternal rewards”.
*not counting pain and suffering for having to follow the honor code and having all your room mates constantly trying to convert you. Or anyway that’s what I imagine, I went to a godless yankee state school.

10. Matt says:

Well this SWAG may be a good indicator that the church doesn’t actually look at subsidized tuition as an investment with future tithes as returns. At the same time, I’m not so ready to assume that the church sees this as an investment in eternal souls either.

The BYU does at least the following for the church, some of which are worth more than money can buy:
– Grants business, political, and academic legitimacy to an organization that otherwise looks an awful lot like a cult.
– Generates non-tithe donations … basically, things like the football program and etc are fantastic excuses for giving more than than the standard 10%. Lots more.