<p>It is true that upper middle class taxpayers in the 100-200K range face some of the highest true marginal rates, as opposed to the “official” marginal rates because of the phase out of various breaks and deductions. But, even with phase outs, the true marginal rate never even comes close to 50%, much less 100%, as near as I can spin the numbers. And this is true even under the AMT. So there is no scenario where I would choose to trade down in income… :)</p>
<p>So yea, when GWB cut the rates for the truly wealthy, he was not kidding. They got the real breaks. These are the folks beyond all the phase outs who have marginal rates above the AMT. So any way you spin it, they saved big. The rest of us are still waiting for the trickle down…</p>
<p>In light of the limited resources colleges (state and private) have, should students in households that purchase HDTVs (or other ‘luxuries’ for that matter) be considered eligible for financial-need grant aid? </p>
<p>Moreover, what responsibility does a household have for self-sufficiency and the making of ‘tough-choices’ when saving for college?</p>
<p>Although I don’t think anyone supposes that if the most selective few colleges in the United States admitted even-handedly on the basis of academic qualifications (however defined) that the family income distribution at those colleges would be just like that of the country as a whole, there is still room to improve in making admission even-handed with regard to economic factors. There are quite a few scholars who have looked at quite a few different data sets (including data from studies of actual college admission files, and other data from federal longitudinal studies of students in the same age cohort, with mental test and income information available for each study participant) who conclude that low-income, high-ability students still have the worst time being admitted to college at all, or being admitted to college on affordable terms, even compared to LOW-ability, high-income students. It’s more expedient to be rich than to be smart if college is in your future plans. </p>
<p>Pretty sad, isn’t it, especially with all the statements by these same colleges and universities that they view such things as a tip factor. I wonder how many folks on these boards think that, just because a college asks if the applicant is first to go to college, that it actually helps?</p>
<p>If you look at this same issue: high ability/low income across the board, the situation is even worse. It is well documented that higher ed is becoming increasingly difficult to afford and that higher ed is becoming increasingly stratified. At the same time, some studies have shown that social mobility in the US is also decreasing.</p>
<p>Since many have concluded that higher ed, especially through programs like the GI bill post WWII and post sputnik financial aid programs increased access to higher ed and so contributed significantly to social mobility, I wonder if this decline in social mobility is due to the increasingly difficult access.</p>
<p>Think about it: </p>
<p>Poor? community college
Middle income? A low cost state college
Middle+ income? Maybe a flagship state U or low cost private college
Upper middle or better? Private college for you.</p>
<p>Yes, newmassdad, I have been quite astonished to learn how many college students at state flagship universities in the current generation come from families that are in the top 5 percent echelon of family income. They can afford to go lots of different places, but fill up state universities with taxpayer-subsidized tuition and fees to save a buck. I can’t blame anyone on the individual level for trying to save a buck–I try to economize too–but I am much more gratified to hear about my alma mater’s “Founders’ Scholarship” (full ride for low-income students) than about the “merit” scholarships my alma mater now offers. All up and down the academic selectivity echelons, colleges still have a lot more to do to recruit low-income students who are academically ready for each college.</p>
<p>"
Poor? community college
Middle income? A low cost state college
Middle+ income? Maybe a flagship state U or low cost private college
Upper middle or better? Private college for you."</p>
<p>Still, even in many of our own lifetimes, it was:
Poor: High school drop-out, started working fulltime as soon as it was legal.</p>
<p>Middle income: High school graduate. Perhaps community college or lived at home and went to local public 4-year
Middle +: In state public
Wealthy: Ivies, publics, whatever type of college they wished to attend (assuming they had the grades)</p>
<p>Keep in mind that it wasn’t until the mid 1940s that most people in the U.S. finished high school.</p>
<p>Even when many of us were applying to college or were college-age, college wasn’t something that most people in the U.S. went to.</p>
<p>The idea now that if people have the grades, scores, they should be able to go to any college in the U.S. that accepts them is a very modern idea. That’s not what we grew up in. I grew up in a solidly middle class, highly educated community where 88% of my high school classmate went to college. Most went to an in-state public even if their parents were college professors at the local LAC.</p>
<p>I, for one, think it does “help” to be low income. But, that one fact is not enought in itself to overcome other less attractive items in the app file. For example, the high scoring (gpa + test scores) Pell Grantees are extremely low, IMO. Note, I differentiate high scoring from “high ability,” bcos scores are really all the adcoms have to go on to assess “ability.” Thus, while there are plenty of high ability kids of all economic groups, it is the middle-wealthy that are able to assemble the “package” needed to be competitive in the game of highly selective admissions. </p>
<p>Re: state flagships – Cal and UCLA offer big admission tips (and rare merit scholarships) and thus, are comprised of ~33% Pell Grantees. Absent those admission tips, and others such a geographic diversity (across the state), those two campuses could be comprised of nearly all full pay kids from top suburban high schools.</p>
<p>“have been quite astonished to learn how many college students at state flagship universities in the current generation come from families that are in the top 5 percent echelon of family income. They can afford to go lots of different places, but fill up state universities with taxpayer-subsidized tuition and fees to save a buck.”</p>
<p>My H has been commenting on this for decades; he talks about how many well-off students were his classmates when he was a UC undergrad. </p>
<p>Saving a buck is part of the equation, but another part is perceived value. If one feels that college is overpriced at $40-50k a year, but is reasonably, priced at $20-25k a year, then it’s primarily the state flagships that are going to meet the expectations for that top 5% of income earners. Another factor that I see is with friends who’ve been paying $20k a year for K-12 private school. Some are tapped out when it comes to paying for college. Others have paid for private school with the understanding that their kids will go public for college.</p>
<p>Top income families are just as tuned-in to value as anyone else. They’ve worked hard for their money & want to spend it on a good education. Many evaluate their options & decide the public is the best option for their kids, just as they may have decided that the expensive private elementary or h.s. was also a better choice than the free public. What’s wrong with that?</p>
<p>Anything wrong? It depends. If this “bargain” for top income families comes at the expense of low income, then I think something is wrong. And I believe that is what is happening, in two ways:</p>
<ul>
<li><p>everyone attending a state supported university gets a subsidy from the state. How much varies, but just compare what a U charges in state and out of state to get an idea.</p></li>
<li><p>many states have not had their own grants and financial aid for low income students keep pace with inflation. This is true both for programs run by the state and for programs run by the state universities. </p></li>
</ul>
<p>So that’s what’s wrong with that. It is not the high income folks directly that are responsible, though. But to the degree that they support the current system by their votes, one could bear some responsibility.</p>
<p>But heck, if one is a fan of social and economic stratification, (maybe a bit like the UK or India?), then this is a fine picture. :)</p>
<p>Well, this top 5% is paying the bulk of the taxes. Low income are probably paying none at all. If you don’t believe the wealthier kids are deserving of a chance at their own state school, then you’re condoning extortion. In order to remain vibrant, state schools have to attract top students. It would be foolish to shut out top kids simply because they are from wealthy families. </p>
<p>I thought diversity was the new buzzword. Isn’t SEC a factor in creating a diverse institution?</p>
<p>No college anywhere is shutting out kids because they come from wealthy families. Quite the contrary. If a student reaches a certain level of demonstrated achievement, AND the student’s family has full ability to pay, the student can often get a greatly reduced price and ready admission at many fine colleges. Another student with the same level of demonstrated achievement, but limited ability for mom and dad to pay, often doesn’t get into college at all, or struggles much more during college just to pay the bills. That’s the status quo. It seems to me that to gain a particular level of achievement with more limited family resources actually shows that the student has more “potential” than the otherwise similar but wealthier student. All I would ask of social policy is that we maximize opportunity for every student who has good potential. That can take many forms, including privately operated colleges offering discounts from list price (“scholarships”) on various grounds, publicly operated colleges enrolling students at a list price below actual cost of instruction, and students seeking loans on the rationale that future increased earnings make going into debt for college a worthwhile investment. The greatest opportunity for college study is found in countries that have a mixed nonsystem of all these channels to higher education.</p>
<p>On the other hand, I’ve seen what happens when top income families decide not to use the “bargain” of public K-12. There’s less political pressure for K-12 educational funding, which convinces more parents to pull their kids from public schools, and voila, you get a stratified system where those who can afford private options leave the public system to those who have no other option. </p>
<p>I do like the idea of somewhat differentiated public higher education tuition, depending on family income, as a way to help subsidize lower-income students. But only to a point, that point being where public tuition bumps up near private costs. Better overall to fund state grants and tuition subsidies via state income and property taxes. That’s a burden that is supposed to be shouldered by the state’s population as a whole, not just upper-income families with kids attending State U.</p>
<p>Low income pay no taxes at all? Maybe in a state with no sales or property tax! (BTW, can you tell me which states those are? I’m looking for a cheaper place to live! )</p>
<p>More seriously, as a percent of income, low income folks often pay a higher percentage of their income to one’s state. Maybe not income taxes, but certainly property taxes, through their rent, sales taxes, gas taxes, use fees, highway tolls. The list goes on. </p>
<p>Regarding your comments about who pays the income taxes and such, i.e. those rich folks, I understand your point. This is why there is no universal agreement regarding what is fair. But to call it “extortion”?</p>
<p>Sometimes it isn’t just the “families” making the more cost-effective frugal decision. We have told our D that we can and will pay for whatever college she can get into that she really wants most to attend. She tells us she’s not sure some of the tuitions make sense. Sometimes the students themselves see things in a very cost-benefit, objective way. I know some prosperous families who have told their kids that if they go to the public U they will give them some capital later with which to start a business or buy a home. A number of kids opt for that.</p>
<ul>
<li><p>“Low income” in Princeton speak, means the bottom half of the population. So 15% of their students come from the bottom 50%!</p></li>
<li><p>now lets look at the aid increase from $15,000 to $31,000. Note that over a 10 year period, a 5% rise per year means costs would go up 63% over that timeframe. With the family incomes of many parents flat over the same time period, it is not hard to see how many families attending can be in the same financial spot, in spite of these “huge” increases.</p></li>
</ul>
<p>Press releases like this would be much more useful, perhaps even more honest, if they would use more commonly accepted definitions of “lower income” Note that their unusual definition is in the** last** paragraph. It would also help if they would frame the financial impact in ordinary “pocket book” terms: How has the EFC of a “typical” family changed over this period? My guess is that it has not changed.</p>
<p>So to keep things in perspective, remember that over a 10 year period, the bottom half of our society went from about 7% to about 15%. At least they all get to attend without loans. But what is their family EFC for room, board and incidentals?</p>
<p>stickershock…methinks that’s because the top 5% makes the bulk of the money! of course the gross amount they pay will be much more. </p>
<p>and even if that were true, that the rich pay unfair taxes (I’m a complete supporter of a progressive tax system), i see nothing wrong with “extorting” to help the needy.</p>
)</p>