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The Nobels and similar academic prizes burnish the academic reputation of a research university. The elite privates would not have the academic reputation they have earned by just being selective and enrolling smart undergrads. It is the faculty and their research rewards that enhance a university’s academic reputation. </p>
<p>Outstanding research => Prestigious academic awards => Increase/maintain academic reputation => Attracts other top faculty => Attracts top students</p>
<p>But you’re right, a Nobel doesn’t directly do much for the majority of students, but it does enhance academic standing of the institution they attend. A student receives an academic education with the name of the university on the diploma. A football trophy just enhances the reputation as a football power.</p>