I just learned that something that I have long-expected is true. Universities are practicing income redistribution and doing it without telling anyone. A big part of the tuition increases at college and universities is through something they call set-asides. Basically, they tap students who can afford tuition by having them pay into a fund that is used for students the institution deems needy. According to a Wall Street Journal article, that amount has jumped 174% in real dollars in just eight years. It is estimated to be $512 million in the past academic year.
I have 6 grandkids. According to the Wall Street Journal formula, they will pay $40,000 into set-asides in their total four years in college. Or, they will educate several strangers. Because their grandmother and I decided to set up college trust funds for them when they were born and their parents set-up 529 educational funds, we will be punished. We could have spent that money, like those whose kids’ parents who get our set-aside money did. What happens to the kids who don’t have either benefit that our grandkids have, but don’t qualify for the set-aside money? They just get it added to their student loans. So, the kids who receive the set-aside money get free tuition or smaller student loans.
The rationale for all this is to educate more poor kids. Does it work? Does any government program work? Students from the wealthiest 25% of U.S. households are nearly nine times more likely to earn a bachelor’s degree by the age of 24. So, the answer is no, it doesn’t work. This percentage has remained constant for 30 years.
And, this doesn’t take into consideration the billions in scholarships. That number is $33 billion in 2011-2012 up from $23 billion in 2006-2007. Most of this goes to students who can present need. Is it no wonder that the very universities who inundate students with liberal philosophy practice as much socialism as they can. To those in academia this is the right way to do business. Take billions in funding from the federal and state governments, steal a few dollars in a little hidden scam called set-aside, and still increase tuition to waste on more perks and frills and salaries. Jump student loans to what is now $1.2 trillion, held by you the taxpayer, and produce less-educated graduates.
Much of that money went into climbing wall and elaborate architecture or bloated bureaucracy or salary and benefit increases for staff. The percentage of jobs requiring college degree has remained fairly constant, especially in the Obama economy, while the percentage of college graduates has increased significantly. Hence, the gap in pay between college degree jobs and non-college jobs has shrunk. So, the incentive to go to college has shrunk while the cost to go has skyrocketed. The cost to go has doubled but the quality of the education at most US colleges has gone down. In summary, you borrow money from the government to go to a college the government already gives millions to in grants and the college gouges you to go there, takes money to give to other students, spends recklessly, and provides a lesser education this is worth less in the job market.
We do put up with a lot in this great country, don’t we?
