How Colleges Are Selling Out the Poor to Court the Rich

I don't mean to restate the obvious, or pander to the crowd on HN, but every time we read one of these articles it needs to be stated that <i>the current system is broken even when it is paid for</i>. That is, for all the ink spilled over who can afford what and how much money is spent where, there are tons of kids right now graduating without a sliver of hope for a job. Worse yet, the system has been blowing smoke up their asses for so long that many of them somehow feel entitled to a job whether there's one out there or not.<p>I love education-related stories. I feel that hacking in this area can help the most people and advance the species the furthest. But we also need desperately need to keep new information we receive in context.

I graduated from a college that cost over $160,000 through four years. I am also from a low income house hold and I will attest to the fact that the college was very hesitant to give me any financial aid, while these kids that would pour in from Marin County California and Manhatton were going to school on a huge price break.<p>What I realized is that for the institution, my tuition money is all the money they were going to get. From the rich families they could expect donations throughout the year. I had a friend who paid very little to go to school there, but it was also clear to us that without his Dad financing the tennis team, we probably wouldn't have had any of the amenities that we were treated to. There's always that give and pull.<p>Another point to bring up is that financial aid can be up to the individual in charge of your application. When I worked at the schools technology center fixing faculty computers, one time I happened to fix the head of financial aid's computer and when she came to pick it up she asked to thank me personally and told me that, "If you need anything from the financial aid office, even just a little bit more, you come tell me and I will make sure to take care of you." I didn't know this lady until then, but I was sure glad to have fixed her comp...

When people vote to not raise taxes to fund these schools, what do they expect is going to happen to subsidized tuition? We saw this happen a few years ago in Washington after voters voted against raising taxes to fund schools, and schools started accepting more foreign students and fewer local students to make their budgets. People were upset about this, for some reason.<p>If the school gives four students $5,000 scholarships on a $20,000 bill - the school makes $60,000 and the students feel good about themselves. If they give one student $20,000, they make zero. At the end of the day, someone has to foot the bill - and if it's not the taxpayer, it'll be the people who can afford to pay.<p>Of course, high quality education should be available to everyone, but as a society we have to be more lucid about where the money is coming from. If taxpayers want people from low income families to go to school (and I am firmly in this camp), taxpayers need to be willing to pay for these people to go to school.

Tuition increases coupled with equivalent financial aid increases are also a convenient way for relatively well-endowed universities to turn "strings attached" money into "no strings attached" money that they can then use however they want. They're essentially laundering donor money.<p>&#62; At most private institutions, a substantial majority of grant aid comes from endowment funds set up by trustees, alumni, and other generous donors. Many pay into the system hoping that their grants will make college more affordable for their endowed students. In the short term, it does. However, in the long term, the institution responds by raising tuition rates to keep the net price at the market value. While this may benefit especially needy students who qualify for additional grant aid, the average student feels no difference and the additional scholarship money gets diverted to other purposes. They are rarely fraudulent or scandalous. Most of the time they just involve making the institution prettier and more competitive in the cutthroat race for the best and the brightest of America's high school seniors. But looked at from a birds-eye view, one gets the uncanny feeling that colleges are not honoring their donors' wishes to make the place more affordable. And lest you think that you can avoid all of this by refusing to donate, remember that as a United States taxpayer, you pay into the system just like millions of your fellow-citizens. Are you satisfied with how your money is being spent?<p><a href="http://www.stanford.edu/~rhamerly/cgi-bin/Interesting/EducationInflation.php" rel="nofollow">http://www.stanford.edu/~rhamerly/cgi-bin/Interesting/Educat...</a>

&#62; At Wabash College in Indiana, 28 percent of students receive Pell Grants, and low-income students pay an average of $15,480. Yet 12 percent of its freshmen get merit aid, averaging $15,393 each. At Case Western Reserve, one of the better known institutions among the high-pell, high-net-price schools, 23 percent of students receive Pell Grants grants, and low-income undergrads pay $18,381 on average. And yet 19 percent of freshmen also receive merit aid, averaging $18,359 each<p>I don't mean to nitpick, but these are tiny differences between averages.

That's not quite true. They're giving merit aid instead of income based aid. You can be poor and get high test scores and they'll court you too.

I wish more schools had the resources to go to the aid model that the Ivy League schools (and also Stanford?) have moved to in recent years. Fully need-blind admission and financial aid based ONLY on financial need. At Ivy League schools today there are ZERO merit or athletic scholarships. There are a few special programs that give merit-based grants for research or other special academic expenses but none that cover tuition or living costs. Even more importantly, there are semi-rigid guidelines laid out in advance that show the correlation between family income and expected family contribution (how much you'll pay for your kid to go to school). So if your child gets in on merit, you can reasonably predict how much you'll have to pay and in many, many cases it is a greatly reduced price. This is a good version of the "high tuition high aid" system. Best of all, all of this financial aid is no-loan and no-strings-attached free money.<p>Yes, of course elite schools will always court rich kids. Need-blind admissions will never change this. If your business school is named McGruberstein School of Business and Mr. McGruberstein's child applies to your school you'll probably take him. While this chips away at the idea of a true meritocracy it does encourage many of the donations that fund the financial aid for low income students in the first place. Yes this is "evil" and is certainly Not Fair, but the colleges need to court these donations in order to build facilities and provide aid at current levels. I know that many of the elite schools spend much more on students each year than they bring in via tuition, and this is financed by the large and ever-growing endowment that they so value.

Both the Atlantic story kindly submitted here and a recent Business Week story<p><a href="http://www.businessweek.com/articles/2013-05-09/college-financial-aid-isnt-going-to-the-neediest" rel="nofollow">http://www.businessweek.com/articles/2013-05-09/college-fina...</a><p>are reporting on findings from a report by Stephen Burd for the New American Foundation, "Undermining Pell: How Colleges Compete for Wealthy Students and Leave the Low-Income Behind."<p><a href="http://newamerica.net/publications/policy/undermining_pell" rel="nofollow">http://newamerica.net/publications/policy/undermining_pell</a><p><a href="http://newamerica.net/sites/newamerica.net/files/policydocs/Merit_Aid%20Final.pdf" rel="nofollow">http://newamerica.net/sites/newamerica.net/files/policydocs/...</a><p>This has been an ongoing problem for a long time. Colleges seek the advice of consulting firms that tell the colleges how to maximize revenues, and one way to do that is to skew "financial aid" policies in favor of students from high-income families.<p><a href="http://www.maguireassoc.com/services-challenges/optimize-net-revenue/" rel="nofollow">http://www.maguireassoc.com/services-challenges/optimize-net...</a><p>As a matter of talent development across the whole country, the United States finding consistently is that it is more advantageous for a child to a be a low-ability child from a high-income family than a high-ability child from a low-income family.<p><a href="http://www.jkcf.org/news-knowledge" rel="nofollow">http://www.jkcf.org/news-knowledge</a><p><a href="http://www.nagc.org/index.aspx?id=10000" rel="nofollow">http://www.nagc.org/index.aspx?id=10000</a><p><a href="http://www.nytimes.com/2013/03/17/education/scholarly-poor-often-overlook-better-colleges.html" rel="nofollow">http://www.nytimes.com/2013/03/17/education/scholarly-poor-o...</a><p>It's understandable why a parent who has money would want to use that money to give Junior leverage to gain upward social mobility. What's harder to understand is why publicly subsidized financial aid programs would fail to identify the most able students who lack family means to attend college, rather than being used by colleges to leverage the admission of even more average students from well-off families.<p>AFTER EDIT: Other comments in this thread are asking where parents and taxpayers can find information about the costs of each college. The United States federal government IPEDS database gathers data about college revenues and spending from all colleges in the country, and the federal data are presented in the most user-friendly format by the College Results website<p><a href="http://www.collegeresults.org/" rel="nofollow">http://www.collegeresults.org/</a><p>operated by the Education Trust. You can look up how radically colleges differ in what they spend per student and in graduation rates of admitted students, among many other interesting statistics, on the College Results site.

So, if the people pay, they bargain (successfully), if the government pays, no need for the people to bargain, so the costs skyrocket. How many times we have seen this? Now we see it in education too. Will we ever learn the lesson?

Historically hasn't this always been the case? I thought it wasn't until recently when college became a at least remotely affordable option.

Maybe we'll bring back the apprentice program. That's what I'm working on, I'm an Edoceo-er

Why is the graph so small?