How Colleges Are Selling Out the Poor to Court the Rich (Atlantic)

Parents Forum
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<p>[Marietta</a> Pritchard: The fate of a field in Amherst | GazetteNet.com](<a href=“http://mobile.gazettenet.com/opinion/6961103-108/marietta-pritchard-the-fate-of-a-field-in-amherst]Marietta”>http://mobile.gazettenet.com/opinion/6961103-108/marietta-pritchard-the-fate-of-a-field-in-amherst)</p>

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<p>Yes, the costs of new construction can sometimes equal the costs of renovation, particularly once you factor in the costs of asbestos removal, lead paint, ADA accessibility, adding air conditioning, etc. </p>

<p>UVa was going to replace their dorms built in the early 1950s. Then, they realized those dorms were still in great shape, but the dorms built in the late 1960s were physically falling apart. Apparently, some of the construction had been rushed, and the concrete was not cured at the right temperature. Therefore, the late 1960s dorms have all been replaced, and the early 1950s dorms are still very popular with students.</p>

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<p>You have to wonder why UVa thought anything was wrong with its 1950s dorms other than the fact that they were built in the 1950s:</p>

<p>[Google</a> Image Result for <a href=“http://www.arch.virginia.edu/housinghistory/final_jpegs/Grounds/McCormickDorms/McCormick_pic.jpg[/url]”>http://www.arch.virginia.edu/housinghistory/final_jpegs/Grounds/McCormickDorms/McCormick_pic.jpg](<a href=“http://www.google.com/imgres?imgurl=http://www.arch.virginia.edu/housinghistory/final_jpegs/Grounds/McCormickDorms/McCormick_pic.jpg&imgrefurl=http://www.arch.virginia.edu/housinghistory/Grounds/McCormickRoad.htm&usg=__B9O83Y6vj8TrWaxT60PYc1eqNGc=&h=297&w=450&sz=185&hl=en&start=1&zoom=1&tbnid=mNQHmM3tuHTr1M:&tbnh=84&tbnw=127&ei=sVvTUbGjEsbZ0QHMxoC4Aw&prev=/search%3Fq%3Dmccormick%2Broad%2Bdorms%26sa%3DX%26hl%3Den-GB%26tbm%3Disch&itbs=1&sa=X&ved=0CCwQrQMwAA]Google”>http://www.google.com/imgres?imgurl=http://www.arch.virginia.edu/housinghistory/final_jpegs/Grounds/McCormickDorms/McCormick_pic.jpg&imgrefurl=http://www.arch.virginia.edu/housinghistory/Grounds/McCormickRoad.htm&usg=__B9O83Y6vj8TrWaxT60PYc1eqNGc=&h=297&w=450&sz=185&hl=en&start=1&zoom=1&tbnid=mNQHmM3tuHTr1M:&tbnh=84&tbnw=127&ei=sVvTUbGjEsbZ0QHMxoC4Aw&prev=/search%3Fq%3Dmccormick%2Broad%2Bdorms%26sa%3DX%26hl%3Den-GB%26tbm%3Disch&itbs=1&sa=X&ved=0CCwQrQMwAA)</a></p>

<p>In fact, I can’t help but notice the resemblance between UVA’ s dorms and the ones slated for destruction at Amherst:<a href=“http://www.google.com/imgres?imgurl=http://www.amherstiana.org/campus/images/buildings/coolidge_1.jpg&imgrefurl=http://www.amherstiana.org/campus/coolidge.html&usg=__StRbd1nZAu7h8UQNEr00hH9uZBM=&h=300&w=400&sz=22&hl=en&start=13&zoom=1&tbnid=jbjfEfQIizQslM:&tbnh=93&tbnw=124&ei=O2DTUdS3JofB0QHnv4GYAg&prev=/search%3Fq%3Damherst%2Bsocial%2Bdorms%2BCoolidge%26hl%3Den-GB%26biw%3D533%26bih%3D853%26tbm%3Disch&itbs=1&sa=X&ved=0CEQQrQMwDA[/url]”>http://www.google.com/imgres?imgurl=http://www.amherstiana.org/campus/images/buildings/coolidge_1.jpg&imgrefurl=http://www.amherstiana.org/campus/coolidge.html&usg=__StRbd1nZAu7h8UQNEr00hH9uZBM=&h=300&w=400&sz=22&hl=en&start=13&zoom=1&tbnid=jbjfEfQIizQslM:&tbnh=93&tbnw=124&ei=O2DTUdS3JofB0QHnv4GYAg&prev=/search%3Fq%3Damherst%2Bsocial%2Bdorms%2BCoolidge%26hl%3Den-GB%26biw%3D533%26bih%3D853%26tbm%3Disch&itbs=1&sa=X&ved=0CEQQrQMwDA&lt;/a&gt;&lt;/p&gt;

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<p>Any family eligible for PELL grants and with a child with top grades etc. should be printing out these Average Costs for Freshmen lists. There are some excellent schools noted with costs well below $10,000 per year for PELL grant students.</p>

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<p>^^^

[Undermining</a> Pell | NewAmerica.net](<a href=“http://newamerica.net/publications/policy/undermining_pell]Undermining”>http://newamerica.net/publications/policy/undermining_pell)</p>

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<p>Implicit in that 2/3’s quote is that private colleges:</p>

<ul>
<li>owe poor kids an education</li>
<li>all have fat endowments and can afford to fund full grants</li>
</ul>

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<p>^^Well, as long as we’re talking about who’s deserving and who isn’t, the same report says over 45% of merit aid at all four year institutions (both public and private) is awarded to students scoring less than 1000 on the SAT.</p>

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<p>I’m reminded of that Russian proverb,
“The marvel is not that the bear dances well, but that the bear dances at all.”
Despite what their founding charters might have declared, colleges like Amherst were developed largely by and for wealthy elites. The marvel is not that they are (or aren’t) working miracles to educate the poor and middle class, but that they’re admitting and financially supporting large numbers of needy students at all.</p>

<p>62% of Amherst students get need-based FA. So do 60% of Harvard students. Is most of this aid going to the neediest of the needy? Maybe not. Could they be doing more? Probably, but demand needs to come from stakeholders including alumni, parents, and students.</p>

<p>However, in my opinion the public should be barking up other trees. State universities educate a far greater number of needy students. Taxpayers and voters have (or should have) real leverage over how much money they get, and how it is spent.</p>

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<p>

</li>
</ul>

<p>I would remind you that private colleges and universities are the beneficiaries of lavish public subsidies, justified on grounds that they are charitable institutions. If they only provide “charity” to the affluent, I would question whether the public subsidies make any sense.</p>

<p>Private colleges and universities receive generous tax subsidies every which way to Sunday. Contributions to them are tax-deductible. Their endowments grow and compound perpetually tax-free, and they pay no capital gains tax when they cash in on appreciating assets. (Harvard has aptly been described as “a large hedge fund that maintains a small educational arm on the side, for the tax preferences.”) In many states their purchases are exempt from state and local sales taxes. In most states, they pay no property tax on their real estate holdings. In addition to all these direct tax subsidies, they are the chief beneficiaries of federal Pell grants, federal student loans, and in some states, state scholarship and loan programs. They are indirect beneficiaries of tax-advantaged 529 college savings programs, tax-deductibility of student loan interest, and tuition tax credits. And of course, their research operations subsist primarily on federal grants.</p>

<p>Given these lavish public subsidies, it is perhaps not unreasonable for the public to expect some public benefit in return.</p>

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<p>Everything is a matter of balance.</p>

<p>Let’s keep in mind that if it wasn’t for the rich kids and the international students paying full sticker price, it wouldn’t be possible for most colleges to offer greatly discounted tuition to the minority and low/moderate income US students.</p>

<p>Someone explained how the situation works at many but not all colleges:</p>

<p>the students in large classes subsidize the kids in small classes
the out of state public university students subsidize the in-state public students
the students accepted off the wait list often subsidize the students who were admitted early and received the most aid,
the liberal arts students may subsidize the engineering students
the international students who can’t get college aid subsidize everyone else
etc.</p>

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<p>The way Harvard and Amherst define “need” might make many others laugh. Income over $100K can qualify.</p>

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<p>Non-profit private colleges get the same tax benefits as other non-profit institutions, whether charitable or not. Also non-profit private colleges are not the “primary beneficiaries” of Pell Grants - only 10% of Pell Grants go to non-profit privates.</p>

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<p>

</p>

<p>Not so. There are many different types of non-profit institutions, subject to different treatment under the Internal Revenue Code. For example, 501(c)(4) “civic leagues” and “social welfare organizations” are tax-exempt for many purposes, but contributions to them are not tax-deductible, and in addition may be subject to the federal gift tax (if large enough). Tax-deductibility is a huge deal; very few wealthy donors or charitable foundations, or even more modestly affluent individuals, will make major gifts to an institution that doesn’t have 501(c)(3) tax-deductible status. As a consequence, 501(c)(4)s rarely have the kind of large endowments or real estate holdings that major 501(c)(3)s have, so their other tax exemptions aren’t worth nearly as much to them because they aren’t shielding nearly as much income and wealth. Also, income spent on some 501(c)(4) activities–like engaging in political campaigns–is taxable; 501(c)(3)s, like churches, charitable foundations, and colleges and universities, are strictly prohibited from engaging in electoral politics. 501(c)(6) tax-exempt trade associations are subject to rules similar to those that apply to 501(c)(4)s.</p>

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<p>Also note that most types of non-profit institutions don’t benefit from tax-advantaged 529 college savings plans, tax-deductibility of student loan interest, and tuition tax credits–all of which operate to subsidize college tuition, and thereby allow colleges and universities to charge higher prices.</p>

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<p>We the people have wisely recognized that every student who attends a private school saves the taxpayer money, since we do not have to subsidize public education for that student. The tax exemptions make sense from that perspective, whether the colleges are “charitable” or not.</p>

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<p>Harvard doesn’t give FA aid to the affluent, nor does it give merit money</p>

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<p>No, just to the very nearly so. And many would see people earning $150K as affluent.</p>

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<p>[Net</a> Price Calculator](<a href=“http://npc.fas.harvard.edu/]Net”>http://npc.fas.harvard.edu/) indicates that it is not hard to come up with scenarios where Harvard will give non-zero financial aid to students from families with incomes over $200,000 per year.</p>

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<p>

Define “affluent” here.</p>

<p>I don’t know much about the financial aid process at Harvard. Who is responsible for deciding how much FA is given to an applicant? Is there a Chinese wall between FA and admissions?</p>

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<p>

Google is your friend. See [Financial</a> Aid Office](<a href=“http://www.fao.fas.harvard.edu/icb/icb.do]Financial”>http://www.fao.fas.harvard.edu/icb/icb.do)
Alos <a href=“http://talk.collegeconfidential.com/harvard-university/1095327-financial-aid-speculation.html[/url]”>http://talk.collegeconfidential.com/harvard-university/1095327-financial-aid-speculation.html&lt;/a&gt;&lt;/p&gt;