The Expensive Private College Rip-Off

While many exclusive and expensive private colleges have large endowments that are supposed to go to those in most need, this is not true. According to an article in that crazy left wing magazine Forbes, Maggie McGrath exposes a seedy side to the financial aid formula. It is called “financial aid leveraging” and it has a major effect on the rising rate of tuition at many private universities.
It has a three part formula that goes something like this. First, charge an exorbitant rate for tuition. Second, the schools then take that money and use it for things like sports stadiums and luxury dorms. These amenities have no impact on educational quality. They are simply bait to snare the children of America’s wealthiest families. The final part of this plan is to use this country club atmosphere to hand out some ego boosting “merit” aid to the rich kids. Why not give 5k to four rich families that will pay the remainder of the tuition out of pocket? This is much more profitable than handing over 20k to a deserving kid from a family who really needs it.
While this plan makes financial sense for the schools, it is morally bankrupt. Shutting out poor and middle class kids so college coaches can be paid millions of dollars and students can have vegan menus is a damaging message. Just like our politicians are bought and sold, the same can be said for attendance at some of the priciest colleges. Education is the best way to address wealth inequality. It seems many of our colleges are using policies to exacerbate it.