MIT subsidises all undergrads. It costs them about $70,000 to educate them, the full sticker price is $45,000. They can do this because they have an enormous endowment. I don't know about funding of grad students.
They also get around the poor high school prep while maintaining their own high standards by not grading subjects in the first semester, and not recording failed subjects in the second.
Freshman grading is designed to ease the transition from high school by giving students time to adjust to factors like increased workloads and variations in academic preparation. A, B, and C grades are used during the second semester so that freshmen can begin the progression to regular A-F grading in the sophomore year.
The cult of the professional manager. To be honest though until recently I thought american college was just the last years of high school plus maybe the first year of university (a bit like a 6th form college). But that is because it looks like high school in movies and you can't study the things we associate with university - medicine, law etc.
It sort of is. Things studied in first year are high school level elsewhere, but then they have a huge number of non-relevant general education subjects which fill at least a year's schedule, if not more. Which leaves two years to fit in what takes three years in other countries. A master's degree can potentially be only one year in the US. As far as I can tell the reluctance to teach professional degrees at undergrad level is just cultural. They could compact the general ed stuff (I know of at least one excellent liberal arts school which does not teach composition separately, but as part of every subject). PhDs take forever because students are expected to work in the supervisor's lab instead of hiring people for that purpose. They also have quite a lot of coursework at the PhD level, which supports the assumption that undergrad work is not as advanced as elsewhere. There is also a massive range in quality of the education at US universities, which AFAIK doesn't occur elsewhere.
Bluemagic, your college/university distinction isn't true in my experience. Colleges are also PhD granting institutions.
