@PickOne1 - we the taxpayers subsidize Harvard students at the rate of $48,000 per student per year. In comparison U Mass at $9,000. Harvard doesn’t need us to subsidize them our tax system needs to be updated. It’s not a political issue, it’s simply common sense
I’ve already pointed out in post#73 that my kids’ boarding schools (COA 55K; actual school expenditure per student 85k) give FA to nearly half the students, plus full ride scholarships to outreach students, including giving them a stipend, money for travel, money for preppy clothing; scholarships for study abroad-- all without a billion dollar endowment or without federal grants.
Dunno why some people here are still arguing that harvard, w top notch hedge fund managers and an endowment bigger than the GDP of scores of countries, is too pathetically stupid to figure out how to do the same w/o pell grants.
I’m NOT arguing that pell grants should be eliminated at private colleges. But common sense dictates that harvard and a few other breathtakingly rich school really do not NEED them. It’s disingenuous to pretend otherwise. They already receive tax-free earnings on their enormous endowments & pay no property taxes-- although some schools have begrudingly coughed up some peanuts to contribute for local community services.
They can afford to pay their fair share on their endowments.
Huh?
http://www.usatoday.com/story/money/markets/2015/07/31/big-oil-profit-falls/30940917/
I realize that such is a popular position, but in fact the bulk of that so-called subsidy is the ability to expense most drilling R&D costs in Year 1, i.e, accelerated expense. But if such a tax break/subsidy didn’t exist, the oil companies would just take that expense over time, i.e, upon a depreciation schedule. Thus, it is not “more” expense, and lesser TOTAL tax, but earlier expense and fewer tax payments today. But that also means higher tax payments tomorrow.
btw: the big bad oil companies may not even the biggest beneficiaries of tax subsidies (on a % basis):
I think many older parents face the challenge mentioned here. This is why we stopped most of our financial support to our child after he had graduated from college. Actually, before our child completed the fall semester of his senior year in college, I had lost my job, and only found another job almost a year later. (Blame the downturn around 2008/2009.) So it was a necessity that we stopped supporting him financially.
Relatively speaking, our family is still lucky because we at least could support our child till the end of the college. Many other families even could not.
Not that interested now that I read the nexus article, frankly.
I will post it again for you:
http://nexusresearch.org/wp-content/uploads/2015/06/Rich_Schools_Poor_Students.pdf
That’s such a bogus argument in that paper. Pick any tax deduction and you can write a whining redistribution article about it. I think churches are BS. They should pay income tax and property tax and nobody should get a deduction for donations. I think the mortgage deduction is BS. Nobody should get a deduction and tax revenues will soar. The Red Cross is BS. Blah Blah Blah.
@parent1337 rich private colleges RECEIVE a ton of money to operate from the government. They SHOULD pay their fare share in taxes for their endowment money. It isn’t a political issue, both sides agree. Or would you prefer the status quo and YOUR taxes went up as a result?
I don’t think both sides or even a majority agree. To me this just sounds like the latest “little old lady to steal the purse from” rather than an attempt to improve the education of all our citizens. If Harvard loses tax-exempt status, someone will find a way to create a charity to do exactly what Harvard does now, and yes Harvard could keep its 10K students in their ivied halls probably for ever. But the revenue won’t be there for ever. Who’s next ?
That study is combining top 20 elite universities and Pell Grant recipients even those two subsets rarely intersect (Questbridge is trying, and you can contribute there, they are a charity). Tax exemption for non-profits has existed for decades or longer, no one is saying Harvard is distributing this money to shareholders or buying yachts or … well, I don’t think Harvard students are getting cash payments of 48K a year.
Certainly you are free to lobby wealthy contributors in your community to fund whatever CC program you want rather than give money to Harvard.
Great universities serve a purpose to our society.
There are plenty of other targets that are much harder to defend, for-profit schools getting huge amounts of student loan and grants, years of handouts related to financial bailouts, the McMansion tax writeoffs, free cell phones, disability benefits that preclude rejoining the workforce, etc. All you need is a sympathetic ear and a voting block and suddenly this all becomes really necessary, but is it ?
The federal budget is huge - there is lots of waste and lots of things that could be changed.
Why do you hate Harvard so much ? This is not taxpayer money in the endowment … it is alumni gifts and earnings on investment.
@pickone1 Republicans and Democrats both are lobbying for the high endowments to be taxed.
Why the strawman type arguments?
How exactly are my taxes going to go up if Harvard keeps its endowment?
Not sure what the argument is here. And certainly in a free market system, if you object to paying tuition to Harvard, don’t send your kid. If you think your state U’s are underfunded, stop voting for representatives who are going to cut the budget in the last five minutes of the session. If you think community college is the best way for first gen or disadvantaged students to begin their higher education, then storm city hall (or county hall, or whatever your local government is) and demand that they put back the bus routes which serve your nearest CC and then your downtown past 6 pm. My county cut that route after the 2008 meltdown, and local guidance counselors say that it has had a disastrous impact on kids who work a full day and then are trying to take CC classes at night. Not every kid has access to a car; not every parent can pick a kid up from work and drop them off for Freshman Bio, picking them up again at 10 pm when their lab is over.
But sure, the problem is Harvard and the solution is Harvard. My local CC has a huge (and almost empty) parking lot (faculty and staff cars) at night. The kids don’t own cars and need public transportation to get there. Enrollment in night classes is down.
Duh.
@blossom - if you don’t understand the argument why don’t you research and learn?
I have one “correction” and one point to make.
In post 64 above, I made up a fictitious institution named “Crappy Community College” that had a 20% graduation rate. My intent wasn’t to malign community colleges; it was just meant to be an off-the-cuff example of a hypothetical college that I thought we all could agree probably didn’t serve all its students that well.
Well, I did a little research. It turns out that 20%, rather than being an example of a bad graduation rate, is actually the average graduation rate for public community colleges. (To be fair, many community colleges believe the Dept. of Education’s official statistics don’t capture their true performance and would argue that 30%-35% is more accurate, but 20% is the official number.)
So, in order for “Crappy Community College” to actually be crappy, it would need to have a graduation rate more like 5%. That’s the “correction”.
Here’s the point - a maximum Pell grant student gets $5,730 per year. So, it costs the taxpayers $28,650 per year, for as much as 3 years, to graduate one Pell student from the average public community college with their associates degree, At a below average community college with a 10% graduation rate, it costs the the taxpayers $57,300 per year to graduate one student. And at “Crappy Community College” with its 5% graduation rate, it costs the taxpayers $114,600 per year to graduate one Pell student with an associates degree. And this money is spent over as much as 3 years, for a total investment of almost $350,000 for one Pell student to obtain an associates degree. For this amount of money, the taxpayers could give a student a 100% full-ride to Harvard, have them get their bachelors degree, and have almost $100,000 left over.
Again, my point isn’t to malign the community college sector. It plays a very valuable role in the higher education landscape - PickOne1 made the important point that we need different types of higher education for different students. I’m just saying that cheap demagoguery is exactly that - cheap, whereas creating good policy is hard and might require thoughtful analysis by reasonable, informed people.
Clarinet- I understand the argument very well as presented here- it’s the gaps in logic that trouble me. Hence my facetious comment.
That’s unfortunate, I hope the average CC attendee who does not graduate gets some value out of their time there. In addition to “our” money, they are spending their time and trying to fulfill their dreams of bettering themselves.
I bet the average Harvard Pell Grant recipient graduate costs us less than 30K, the rest is all Harvard’s money and resources to help these students graduate. And they are valuable graduates since they know both their childhood worlds and the bigger world out there.
How about the really big number of above average middle class students who are competing for limited places in flagship or 2nd tier state schools and get limited to no aid? Really, this is a result of state legislatures lowering their contribution to these schools, probably for years or even decades. State school quality, excluding the semi-privates like Michigan that are using private school tuition prices to subsidize a small cadre of in-state students and a really top notch university, depends on state contributions. Tuition affordability is also a state decision as is lack of FA at state schools.
The total tax revenues in the Nexus article is $5B out of $3T federal budget and does break the compact between the US and these 95 elite schools that they are a non-profit, which could encourage even worse behavior (end to FA ?) since at that point, they are just another group of for-profit companies with a small educational arm. Maybe we just will flood Target with Harvard sweatshirts … but there could be other consequences like a slowdown in research - note that the federal governments and private industry do less and less of this every year !
So you are saying that a 0.1% tax increase is worse than changing our 95 best universities ?
Most if not all federal research grants are competitive, so either Harvard is providing facilities and better researchers on their own dime, or maybe they just have assembled the right parts in Cambridge. Are we going to move this to some community college ? Or … well what school do you like exactly ?
Re: Nexus Research paper cited in post #107^^^,
I think it would be interesting to try to cost out the value of tax subsidies to wealthy private universities. I’m sure the figure would be very high. Unfortunately, the authors of this “study” do a particularly poor job of it for many reasons, but I’ll point to just three. First, they take the year-to-year gain in endowment value as a proxy for the school’s untaxed income. As the authors themselves admit in a footnote, however, this is a flawed measure. The change in endowment value from one year to the next is a function of several factors: realized and unrealized capital gains/losses, additions to endowment from charitable giving, annual payout from endowment to support the school’s operating expenses and capital projects, and costs of managing the assets (which for certain kids of investments can be very high). Conflating all that and treating it all as realized capital gains—i.e., what would be taxable if the assets were owned by an individual or a taxable entity—strikes me as just a wild stab in the dark, so far off the mark as to be laughable.
Second, looking at changes in endowment value for a single one-year period (2013-14) can be extremely misleading. Most endowments did very well in 2013-14, typically showing gains of around 15%, a few lower (e.g., Harvard +11%), some much higher (e.g., Penn +23.8%). But if you look at the previous year, 2012-13, endowments gains were typically about half the 2013-14 figures (e.g., Harvard +6.2%, Yale +7.4%, Stanford +9.7%, Princeton +7.4%), with some quite dismal (e.g., Chicago +1.5%). And the year before that, endowments were mostly flat, with many even losing value (e.g., Harvard -4.1%, Yale -0.1%, Stanford +3.2%, Princeton -0.9%). You can’t just look at a single year and say, “Taxpayers subsidize Yale to the tune of $69,000 per student per year.” Even if that’s an accurate figure for 2013-14, you’d need to look at the average over a much longer period to say what the annual tax subsidy is. Also some of the private-v.-public comparisons can become very skewed by looking at a single year. The authors identify Rice as one of the rare private schools that aren’t subsidized more heavily than the public flagship in the same state. but that’s mainly because the University of Texas has its own massive endowment consisting largely of lands from which it earned record oil and gas royalties in 2013-14, resulting in a whopping 23.4% increase in endowment value over that period, far outstripping Rice’s very respectable 14.3% gain. But in 2012-13 the gap was much narrower, with Texas up 12.0% and Rice up 9.5%. Who knows what the 2014-15 figures will be, given the recent deep drop in oil and gas prices and drilling activity.
One last quibble. Odd that the authors chose the University of Chicago when they said they were looking at the largest private endowment in each of several states. Northwestern has a bigger endowment than Chicago, and that was true both at the beginning and at the end of the 2013-14 study period, and has been true for many years now. I thought perhaps they chose Chicago because it has fewer students and therefore a higher endowment per student, but that doesn’t appear to be the case; endowment per student is nearly identical at the two schools ($505K per student at Chicago, $509K per student at Northwestern). So I guess it’s just sloppiness on the part of the authors.
I’d grade this paper a D. But I’d love to see a more skillful party take on the topic.
Somehow also lost in this is that alumni are giving their money to these universities rather than just buying a bigger boat or a bigger house or whatever …
Way to encourage those 1%-ers to be generous.
And there are people giving really big gifts to state universities, which will help them get out from under the burden that state legislatures put on them to try to provide a $60K education for $20K.
.
Pickone- in my region, the kids who drop out of community college are really in the Bermuda triangle of bad outcomes. No degree, no better employment prospects, and stuck with the minimum wage job they started with. No medical facility in my area is hiring a kid with half a radiology certificate, or someone who is “not quite but sort of” trained to be a dental hygenist or pharmacy tech. You either get certified and finish your program or you don’t. Some kids who finish then go on to get a Bachelor’s- which of course is fantastic- but the kids who drop out part way really don’t have enhanced employment opportunities.
I sat in on a remedial CC math class not too long ago. Shame on our public schools for graduating kids with 5th grade math skills and thinking they could survive a nursing, pharmacy tech, vet tech program. Teaching a class of HS graduates what a decimal point is?
Shameful. But do you really want your mom’s cancer dosage being verified by someone who doesn’t know what a decimal point is?
So sure- all of you can get on your high horse about Harvard but I hardly think that’s the biggest problem facing our educational system today.