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How Colleges Are Pushing Out the Poor To Court the Rich

An anonymous reader writes "A change from 'need' based financial aid to a 'merit' based system coupled with a 'high tuition, high aid,' model is making it harder for poor students to afford college. According to The Atlantic: 'Sometimes, colleges (and states) really are just competing to outbid each other on star students. But there are also economic incentives at play, particularly for small, endowment-poor institutions. "After all," Burd writes, "it's more profitable for schools to provide four scholarships of $5,000 each to induce affluent students who will be able to pay the balance than it is to provide a single $20,000 grant to one low-income student." The study notes that, according to the Department of Education's most recent study, 19 percent of undergrads at four-year colleges received merit aid despite scoring under 700 on the SAT. Their only merit, in some cases, might well have been mom and dad's bank account.'"

22 of 668 comments (clear)

  1. Goodbye by gagol · · Score: 5, Insightful

    Social mobility. Welcome Feudalism 2.0

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    Tomorrow is another day...
    1. Re:Goodbye by lister+king+of+smeg · · Score: 5, Funny

      feudalism 3.11 for workgroups

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      ---Saying gnome 3 is better than windows 8 not so much a compliment as it is damning with light praise.
    2. Re:Goodbye by hairyfeet · · Score: 5, Interesting

      Yep, got a nephew that is gonna end up having to drop out of college halfway through because he can't get the aid to finish even though he has high marks while the same school trips over themselves to court these third and fourth generation money kids that can just fuck off for four years for all they care, they'll have a diploma and a cushy job waiting at daddy's firm when they get out. He is gonna end up buried in 37k of debt without even a piece of paper, damned shame is what it is, poor kid worked his ass off and got screwed..

      George Carlin said it best "Its called the American Dream...because you have to be asleep to believe in it"

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    3. Re:Goodbye by pwizard2 · · Score: 5, Insightful

      What you're describing is fascism, not progressivism. Ever since Reagan, the USA has been going balls-out towards fascism. Lots of people would say that we're already there. Us progressives want to create a society that cares about its people instead of just the very rich and where it's possible for everyone to achieve a decent standard of living regardless of where they start at on the socioeconomic ladder.

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      "It is a denial of justice not to stretch out a helping hand to the fallen; that is the common right of humanity."
    4. Re:Goodbye by roman_mir · · Score: 5, Insightful

      But you wanted it, your entire ideology is based on destroying equality under law.

      Your entire ideology requires to discriminate against some to provide subsidy to others, this is just a tide going the other way, you have pushed and pushed and you have gotten now what you inevitably pushed towards - inflation, lack of productivity, lack of personal responsibility and lack of individual initiative.

      The government creates the moral hazard of fake loans that nobody in their sound mind would EVER give you out of their savings to go 'study' sociology, philosophy, literature. There was a story earlier in the day on this site about an employer not interested in these graduates, they are not worth the time, they have huge debts and they have proven themselves to be incapable of not following the crowd, they have proven to be lemmings.

      Obama's new 'Pay as you Earn' idea is going to change the way people pay back loans, no more the loan payment will be tied to the actual loan amount, now it will be tied to your yearly earnings, so it will make sense to rack up the biggest debt you can and stay in college as long as you possibly can stretch, and then find a low enough paying job so that you won't be repaying too much. In 10 years the remainder of your loan is forgiven, and so colleges will raise tuition faster than ever before in history, I even fully expect to see doubling of tuition in a single year. Why not, you are not paying for it, you are not price sensitive.

      It's a bail out, it's inflation. Elizabeth Warren wants to push interest rates for student loans to be the same as the rate the affiliate banks get at the Fed's discount window.

      Good politics, I am sure 99% of you will agree and 99% of you want that to happen. Of-course it's terrible economics, the banks should not be getting that free money, that's inflation.

      Of-course the banks are getting it from the Fed so that they can turn around and buy US Treasuries, to maintain the artificially low interest rates, to maintain the ability of the gov't to spend on your bankrupt social and military programs. The Fed also wants the banks not to fail for as long as they can stretch it, so the banks make the spread between the Fed's discount rate and the Treasury yield, a couple of percent, nothing fancy.

      Except that it's over 2Trillion a year not counting the new 85Billion a month in just mortgages and refinancing. The Fed wants to reinflate the housing market, they are somewhat successful. The banks use these 'record profits' to inflate the bond and the stock market, stock market is record high.

      Guess what, Warren's plan will make college tuition record high for the same reason that the stock and bond markets are high: inflation. Enormous inflation.

      But her bill won't pass, however Obama's plan will and so don't worry, you'll be able to rack up all the debt you want and never have to repay it, just pay a little bit over 10 years. Of-course what are you going to pay it from? Who is going to hire these sociology and ethnic studies majors?

      PhDs are going to wash floors in McDonalds.

      Yes, it's the new feudalism, the politicians, your gov't, the bankers that are part of it are the feudals and you are the useful idiots.

      -

      Now go ahead, this comment only has one way to go.

    5. Re:Goodbye by Penguinisto · · Score: 5, Informative

      Fun question here... how is your nephew going to school, and where?

      I've known folks who paid their own way through school, who got their Bachelors' 8 years after they started, but they paid their own way along, CLEP'd out of the drudge-work classes, used the GI Bill, used employer-sponsored tuition reimbursements, got their undergrad at the local (read: cheaper) community college but their BS at the state uni, etc.

      There's the traditional (and IMHO stupid) way of doing college, and then there's the smart way to do it. Do it traditional, and (sadly) prepare for the consequences.

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      Quo usque tandem abutere, Nimbus, patientia nostra?
    6. Re:Goodbye by akeeneye · · Score: 5, Insightful

      His health plan was changed so that his defense-contractor MegaCorp employer, that feeds almost exclusively at the trough of the Socialist military, could make more money. There's absolutely no question that this fantastically huge and wealthy company couldn't have maintained funding for the current plan. They simply chose not to, because In These Tough Economic Times, they can get away with it.

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      The man who dies rich dies disgraced. -- Andrew Carnegie
    7. Re:Goodbye by davydagger · · Score: 5, Insightful

      No, Progressives want to create a society which is actively managed by the top, instead of passively managed by the top.

      The hallmarks of progressivism have always been regulating the working man "for his own good", in addition to aid and funding.

      Fascism(real facism) is similar in concept, except more stringent, more violent, and more racist and factionalist.(progressivism is far friendlier).

      What we've been heading towards since Reagan is Corporate Feudalism.

      A good example of "fascism", would be the old Prussian style education system, where education was free, but it was harsh, strict, designed to teach group think and obediance and manditory.

      Facists don't let people starve on the streets, but they aren't above shooting them there either.

    8. Re:Goodbye by ranton · · Score: 5, Informative

      That leaves more than two thousand dollars per year. Now, one could realistically borrow this money, but who would lend it? I have a friend who was offered 13% interest. Fuck that bank.

      Anyone can get $57,500 in student loans from Stafford loans. Since it cannot be discharged, you can get it even if you declared bankruptcy yesterday. The subsidized portion is 3.4% interest and the unsubsidized portion is 6.8% (not 13%). In this case you only have to make $10k per year; $8k if you spend your first two years in community college. Even if you do have to take out the full amount, your after college income only has to be about $6k/yr more to account for your $300k monthly college loan payment.

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      -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
    9. Re:Goodbye by hairyfeet · · Score: 5, Interesting

      Sorry friend but you can't just do that anymore, you can't even keep gas in your car with a minimum wage job as they won't let you get full time hours anymore, he looked at the GI Bill but considering how they have refused to let soldiers leave when their enlistment is up? No thanks, not to mention his grandma is getting up there in years and her health is declining and if my mom passed on while he was overseas he would be devastated, and its pretty much just the one college here as the only other one in the state is a 120 mile round trip which again, gas prices.

      So its all well and good you got lucky by being born at the right time but...that America? Really doesn't exist now, being 19 today is a hell of a lot different than being 19 then, nobody will give you full time hours, jobs are scarce, there just isn't any real paying jobs to be had. Hell I've had 3 guys, including one in his 50s bless his heart, trying to get the job mowing my mother's lawn, things are THAT bad now friend.

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      ACs don't waste your time replying, your posts are never seen by me.
  2. guessing it's more complex than that by buddyglass · · Score: 5, Informative

    For instance, if your parents make less than $65k/year (approx. 150% median U.S. household income, or 300% the cutoff for "poverty level") you can attend Harvard for free. Assuming you can get in. Which, in the grand scheme of things, sort of makes it a "merit based" scholarship after all.

    1. Re:guessing it's more complex than that by NicBenjamin · · Score: 5, Insightful

      The problem here is that most families with $65k have no idea how to turn their 90th percentile kid into the kind of kid who gets into Harvard. They don't know about "SAT Coaches," don't know which extracurricular activities to push, don't have friends who can donate massive amounts to the orphanage little darling just founded in Kenya, etc. If one parent makes $150k, the other makes $60k, and their friends all work at Hedge Funds, it's really easy to look great on a college application.

      More importantly they generally don't know that Harvard will be free for their kid. They see the Harvard name, they see the price tag in USNews is astronomical, maybe they google the actual tuition charges of roughly $37k, and instead of pushing their kid to apply to Harvard and spend $0 they push him to apply to [cheap state school] and spend $10,000 or so a year.

      There was recently on article on three Latina friends from a small city in Texas. The one who went to Emory had loans, but that was because as a teenager she didn't understand all the paperwork requirements needed to get aid. Her family had nobody who had ever gone to a school like Emory, so they couldn't help very well.

    2. Re:guessing it's more complex than that by buddyglass · · Score: 5, Informative

      Which state? And what percentage of their students pay full sticker price? (Hint: probably only the wealthy ones.)

      For fun, here's a list of top public universities and their in-state costs (from US News):

      1. UC-Berkeley, $11,767
      2. UCLA, $12,692
      3. UVA, $12,006
      4. Michigan, $13,437
      5. UNC, $7,694
      6. Wm. and Mary, $13,570
      7. Georgia Tech, $10,098
      8. UC-Davis, $13,877
      9. UC-San Diego, $12,128
      10. UC-Santa Barbara, $13,671
      11. Wisconsin, $10,384
      12. UC-Irvine, $14,090
      13. Penn State, $16,444
      14. Illinois, $14,428
      15. UT-Austin, $9,792
      16. Washington, $10,574
      17. Florida, $5,656
      18. Ohio State, $10,037
      19. Maryland, $8,908
      20. Pitt, $16,590

      So which state's two major state universities are both $20k+?

  3. In capitalism... by elloGov · · Score: 5, Insightful

    Wealth and Power are compounding, always siphoning to the top. Unless you place restrictions, i.e. socialist policy, it's only a matter of time before serfdom ensues, It's no coincidence that 80% of the wealth created over the past two decades have gone to the top 1% of the population. Remember the dream of being millionaires in the 90s? Nowadays, billion is the dream. Yes, inflation over time is real, however it doesn't warrant an increase of 10^3 magnitude.

  4. fact check? by Artifex · · Score: 5, Informative

    The study notes that, according to the Department of Education's most recent study, 19 percent of undergrads at four-year colleges received merit aid despite scoring under 700 on the SAT. Their only merit, in some cases, might well have been mom and dad's bank account.

    The study doesn't actually say that, at least not according to the chart on page 4. It says that 18.8% of the students in college who had scores of 0-699 got merit aid. Not that 18.8% of all the students in college received aid with such low scores.

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  5. Re:living in america :( by erroneus · · Score: 5, Insightful

    I read somewhere...

    We spend more per capita on prisons than we do on school. Something it really messed up with our priorities.

  6. Re:Q&A by pwizard2 · · Score: 5, Insightful

    You'd rather live in a society where there is no escape from poverty if you weren't talented^h^h^h^h^h^h^h^hlucky enough to be born a millionaire? That's where we're headed if what TFA is about becomes commonplace. The idea is that everyone pays for it through taxes. This inherent selfishness of "I've got mine so fuck everybody else" is what is destroying my country and I'm sick of it! All the conservatives who bitch about taking care of other people have benefited far more from society than they can fathom and yet they can't see it. Taxes are the price we pay for civilization and part of civilization is making sure that everyone has a decent standard of living. Yes, you're paying for other people, but guess what? Other people are paying for you at the same time so it all works out. If you don't want to pay taxes you clearly don't want to live in a civilized country either.

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    "It is a denial of justice not to stretch out a helping hand to the fallen; that is the common right of humanity."
  7. Re:living in america :( by Fluffeh · · Score: 5, Insightful

    I hear this statistic a lot as some kind of indictment of our education system, but if you think about it, it makes sense.

    Wow, that train of thought has completely blown me away. I am not even sure on where to start replying to you.

    If you spend more on education, not just tertiary, but primary and secondary, it will nurture youth to have higher aspirations, it will teach them more. If you have someone leaving secondary school with a good understanding of basic subjects (math, English, at least one science and computers) as well as a rounded splash of some elective subjects such as history, economics, art, music, religion they are much more likely to either look for further education on their own (even if they have to pay as much for it as in the US) and move on to being a productive member of society rather than ending up in prison.

    That's not to say that everyone with a good education will never do anything illegal or end up in jail, but the number of people in prison with a poor education should stand out above anything else that to keep people out of prison, give them an education. Give them the ability to actually join society as a peer rather than as the bottom of the ladder cleaning the bathrooms or working as a parking attendant.

    This concept of paying more earlier also has the advantage saving more money in the long run. If you don't need to pay for putting someone in prison AND have the benefit of that person contributing to the society they live in, it clearly is a win-win scenario.

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  8. Re:living in america :( by erroneus · · Score: 5, Interesting

    Going to school to get a good job is not longer a reasonable expectation.

    And it doesn't make sense. We are spending the money. If we could spend the same money to keep people out of prison, we would simply have a better life and culture here in the US. But as tone of your comment suggests, we will perpetuate this "every man for himself" mentality that got us where we are. Reality is far different from your notion of reality. Reality says that people give up on themselves long before the 12 years of public school are over. Their expectations of life have been defined for themselves already.

    Prisons decrease earning potential even after getting out. That's another problem we are failing to face. Once a person has a prison record, they are black-balled for life. It's okay if prison were a deterrent to crime. For some people, it's a rite of passage.

    Government doesn't "foot the bill." *WE* foot the bill. They just decide where the bills go. Once again, if the money that goes to prisons went to schools, even in part, it could make a huge difference in the long run. The problem is it wouldn't make a difference for several election cycles. And no way a republicrat will vote in money for schools instead of prisons when the opposing party would get the glory.

    Once a person has gone to prison, they are no longer full citizens. They lose the right to vote and to bear arms.... legally. We have decided their career for them.

  9. Re:living in america :( by Fluffeh · · Score: 5, Informative

    In reply to yourself and the AC above you, let me provide a decent snip of the conclusion of a rather detailed study from Berkley:

    Full PDF link

    There are many theoretical reasons to expect that education reduces crime. By raising earnings, education raises the opportunity cost of crime and the cost of time spent in prison. Education may also make individuals less impatient or more risk averse, further reducing the propensity to commit crimes. To empirically explore the importance of the relationship between schooling and criminal participation, this paper uses three data sources: individual-level data from the Census on incarceration, state-level data on arrests from the Uniform Crime Reports, and self-report data on crime and incarceration from the National Longitudinal Survey of Youth.

    All three of these data sources produce similar conclusions: schooling significantly reduces crim- inal activity. This finding is robust to different identification strategies and measures of criminal activity. The estimated effect of schooling on imprisonment is consistent with its estimated effect on both arrests and self-reported crime. Both OLS and IV estimates produce similar conclusions about the quantitative impact of schooling on incarceration and arrest. The estimated impacts on incarceration and self-reports are unchanged even when rich measures of individual ability and family background are controlled for using NLSY data. Finally, we draw similar conclusions us- ing aggregated state-level UCR data as we do using individual-level data on incarceration and self-reported crime in the Census or NLSY.

    Given the consistency of our findings, we conclude that the estimated effects of education on crime cannot be easily explained away by unobserved characteristics of criminals, unobserved state policies that affect both crime and schooling, or educational differences in the conditional probability of arrest and imprisonment given crime. Evidence from other studies regarding the elasticity of crime with respect to wage rates suggests that a significant part of the measured effect of education on crime can be attributed to the increase in wages associated with schooling. We further argue that the impact of education on crime implies that there are benefits to education not taken into account by individuals themselves, so the social return to schooling is larger than the private return. The estimated social externalities from reduced crime are sizeable. A 1% increase in the high school completion rate of all men ages 20-60 would save the United States as much as $1.4 billion per year in reduced costs from crime incurred by victims and society at large. Such externalities from education amount to $1,170-2,100 per additional high school graduate or 14-26% of the private return to schooling. It is diffcult to imagine a better reason to develop policies that prevent high school drop out.

    Highlights are mine.

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  10. There is a downside by Anonymous Coward · · Score: 5, Interesting

    An over-educated workforce creates serious economic problems.

    There are only so many jobs available that require higher education. When supply of educated workers is higher than the demand, a few bad things happen:

    1) Lots of educated people simply cannot find work. The opportunities just aren't there. They wind up depressed, and working menial jobs that are below their skill sets and which do not pay them enough to make headway against their crushing student debt.

    2) Salaries for the educated labor start coming down, since supply is so high. The people who manage to land the jobs must overwork themselves in order to hold them (since there is a line of people who would jump at the chance to replace them), and their low salaries means they can't pay off their student debts either (or if they do pay them off, it takes a very long time, which creates serious problems if they want to raise families).

    3) Jobs that normally don't require an education start requiring one, since there are so many educated candidates (who cannot otherwise find work) applying. These jobs still don't pay enough for one to dig one's self out of debt, but now one must get an education and endure the mountain of crushing debt in order to get any job at all.

    On the one hand, denying education opportunities to the poor is unfair. On the other hand, over-educating the population makes nearly everyone poor.

  11. Re:living in america :( by kermidge · · Score: 5, Insightful

    Not bad, and I agree that education is a key element to much.

    But why does damn near every 'good' job these days require a fucking college degree? Many use little more than what can be gotten readily with a year or two of voc-ed, if that. (1986 want ad in local paper for a dish washer at country club ended with "Send resume [sic]..." Inflation indeed.)

    Further, ask yourself why have we effectively demonized such activity as parking cars or cleaning? It's useful work which in some manner makes life better for others. Should this not be a source of pride? And a liveable income as well? Why do we continually stratify tasks such that we have people upon whom we look down our noses? Doesn't this say something a bit nasty about the fragility and skew of our own perceptions about self-worth? Why is someone who brings food to a table or washes the dishes that come back somehow a lesser being? Is it required to have a de facto caste system? Or is that just the way it is because that's just the way it is? Seems to me what humans make they can generally un-make, or make differently.