Covert Welfare: Your Student Loans Might Not Just Be Paying For Your Education
Now even middle-income students are paying part of their tuition to pay for those who come from poorer backgrounds, writes Douglas Belkin in the WSJ:
Well-off students at private schools have long subsidized poorer classmates. But as states grapple with the rising cost of higher education, middle-income students at public colleges in a dozen states now pay a growing share of their tuition to aid those lower on the economic ladder.The student subsidies, which are distributed based on need, don't show up on most tuition bills. But in eight years they have climbed 174% in real dollars at a dozen flagship state universities surveyed by The Wall Street Journal.
During the 2012-13 academic year, students at these schools transferred $512,401,435 to less well-off classmates, up from $186,960,962, in inflation-adjusted figures, in the 2005-06 school year.
At private schools without large endowments, more than half of the tuition may be set aside for financial-aid scholarships. At public schools, set-asides range between 5% and 40% according to the Journal's survey.
The growth of subsidies is directly related to cutbacks in state aid, according to school administrators. Reductions in public spending for higher education have prompted universities to raise tuition levels, they said, making it tougher for students from poorer families to cover costs. To offset that burden, wealthy and middle-class students pay more in subsidies known as tuition set-asides.
"Without it, there is no way I'd be here," said Maria Giannopoulos, a 20-year-old junior at the University of Wisconsin, Madison, who receives $5,000 a year through the program.
But former classmate Allie Gardner, whose father works at Costco and whose mother is a waitress, said she resented kicking in the extra money.
"It's this sneaky little thing they've put in place because they know we'll pay it, we're already taking out loans," said Ms. Gardner, who graduated in December.
Please explain to me why Allie and her family should be paying Maria's tuition.







Because otherwise they administration might have to take pay cuts or stop taking kickbacks from financial companies, duh.
Gog_Magog_Carpet_Reclaimers at January 10, 2014 12:38 AM
"Income Inequality"
Bill O Rights at January 10, 2014 2:54 AM
And don't forget the kickbacks from the book companies either. The community college I work at has a revolving door from several textbook publishers in the area to the college's bookstore and back.
spqr2008 at January 10, 2014 5:32 AM
Well you see, Allie and her family are struggling hard to make sure Allie can afford to pay for both her and Maria's education. Oh wait, that makes sense (somewhat) for K-12, as I think as a society we can agree that a high school education is a necessary thing in life for most students. But college education too? Especially when there are a lot of boomerang college grads and those who still struggle years after graduating??
Hopefully this becomes more widely known. Saddling Allie with years of student loan payments so Maria (and Tom and Sally and...) can also attend (not necessarily graduate) is ... unjust.
the other Patrick at January 10, 2014 7:03 AM
I'm not sure I see the problem here. Aren't universities allowed to charge what they want? And aren't they allowed to do what they want with the tuition they receive? And aren't students permitted to choose whether to go to a university (or not go if they are not happy with what the university does with its funds)?
Snoopy at January 10, 2014 7:24 AM
I think the issue here (for me at least) is not that the universities are free to do with the tuition they receive, but that instead it does not show up on students' tuition bill, nor is it widely known or disclosed that's what's occurring. When everything else is broken down on their bills (Student IT fee, Rec center Fee, xyz fee), why not "shared tuition fee" or something.
Also, for most public institutions, and in my state where it's mandated that tuition be as affordable as possible, students like I was don't have a choice to go to a school where this isn't occurring - I couldn't have afforded a private school where this wasn't occurring, yet it was instilled in me that I needed to go to college. Others who are looking to further their education for whatever reason also don't have much choice.
the other Patrick at January 10, 2014 7:47 AM
Amy Alkon
http://www.advicegoddess.com/archives/2014/01/10/covert_welfare.html#comment-4190049">comment from the other PatrickI think the issue here (for me at least) is not that the universities are free to do with the tuition they receive, but that instead it does not show up on students' tuition bill, nor is it widely known or disclosed that's what's occurring
Exactly, the other Patrick.
Amy Alkon
at January 10, 2014 8:48 AM
In other news, when I buy Amy's book, it doesn't show up on my bill, nor is it disclosed, that part of the proceeds will be used to fund a vacation for her in Paris. So what?
Snoopy at January 10, 2014 9:13 AM
"So what?" Snoopy
while Amy may be an institution, she isn't a Public one...
Since public Uni's are taxpayer funded also... don't you think we should demand some transparency? Obviously NOt just in this. There should NEVER be more administrators than teaching faculty, but that is a different Q?
SwissArmyD at January 10, 2014 9:40 AM
"I'm not sure I see the problem here. Aren't universities allowed to charge what they want?"
They are charging one group of people a different price than they are a different group for the same goods. Based upon a superficial quality of their parents.
Joe J at January 10, 2014 10:13 AM
They are charging one group of people a different price than they are a different group for the same goods.
This, exactly this. When I went to college, I worked to pay my way. The college had the program set up for people who wanted to work: They helped place us in jobs related to our degree. I worked a full semester, went to school a semester, alternating.
Anyhow, I was never more livid that one semester when I was standing in line to pay my tuition - hard-earned dollars from a semester of working. I was filling out my check when - to my utter shock - the student in front of me received a check from the school. Why? He was on a sports team.
a_random_guy at January 10, 2014 10:25 AM
> They are charging one group of people a different
> price than they are a different group for the
> same goods.
It's called price discrimination:
http://en.wikipedia.org/wiki/Price_discrimination
"Price discrimination or price differentiation is a pricing strategy where identical or largely similar goods or services are transacted at different prices by the same provider in different markets or territories."
Perfectly legal and done all the time - e.g. discounts for seniors.
Snoopy at January 10, 2014 11:34 AM
Snoopy nailed it.
Everything can be reduced to pure capitalism. Fuck America. It's the dollar that matters, not the health, strength, vitality, or future of the country, the society, education, or anything else.
That's just feel-good hippy bullshit. If these students were smart they'd just teach themselves for free at the public liberry and demand to be tested on their equivalent knowledge during job interviews!
Incidentally, did you know that public liberries are an unjust tax burden on citizens? It's true!
Gog_Magog_Carpet_Reclaimers at January 10, 2014 12:10 PM
Here is why this is a problem. The students who are being charged are not people who pay cash for their tuition, they also have student loans. So, not only are they asked to subsidize someone else's tuition, they are also forced to finance it too! That make the actual cost of the subsidy increase exponentially if you have to pay it off over a long period of time. I also find it insulting that a family where the dad works at Costco and the mom is a waitress is considered so "well off" that someone else can sponge off of them. This is disgusting.
Sheep mommy at January 10, 2014 12:34 PM
Incidentally, did you know that public liberries are an unjust tax burden on citizens? It's true!
Posted by: Gog_Magog_Carpet_Reclaimers at January 10, 2014 12:10 PM
Well when their main mission seems to be buying ten copies each of the latest romance novel, and blockbuster film on bluray and maintaining lists to check out that trash, as opposed to stocking copies (or internet access to) good but obscure science journals, I think they should go out of business.
They have become nothing but make work programs ffor people not ambitious enough to get a job with the TSA.
My own public library decided it was within their mission statement to run a coffee bar, which lost 50k a year, until the county commissioners finally said "enough" and shut it down.
Isab at January 10, 2014 1:03 PM
Wow, Isab, just wow! Who in your public library pissed you off?
I work in a public library and do a very good job for very little pay. Nearly everyone I work with is in the same boat. We get paid less than the people who take your order at McDonald's or pick up your garbage, but have to take more crap from people like you who want some obscure science (or history or political or economic) journal that only you read, which costs more than the Wall Street Journal for a yearly subscription and are too cheap to pay for it yourself.
Public libraries are more than just a place to check out books of all kinds (both paper and electronic), movies, music, and magazines. Libraries also offer literacy tutoring, free computers, quiet study areas, family history centers, and safe places for children and teenagers. Did you know that public libraries also serve as gathering places, shelters, and information centers in areas that have experienced flooding, tornados and other natural disasters?
You may not value public libraries, Isab, but quite a lot of people do and will continue to do so well into the future.
Kima at January 10, 2014 1:46 PM
You may not value public libraries, Isab, but quite a lot of people do and will continue to do so well into the future.
Posted by: Kima at January 10, 2014 1:46 PM
Thats fine. They get a vote just like me, and when it is 49 percent, we can shut the place down. Every public school building in this town has their own infinite library through the magic of the internet,
I don't value public services that do little more than compete with private enterprise and undercut their prices, usually at great expense to the tax payers. (That's me,the taxpayer). I am the one funding the library, and the schools for that matter.
Not singling you out, I feel the same way about public school teachers, and recreational facilities that duplicate or compete with private gyms, and clubs.
Nothing sacred about either libraries or schools in my book. Most of them delver a very poor product, at a price way higher than the market.
I know how "special" you think you all are, but I don't buy it.
And this isn't personal. I know nobody who works at our local country library.
And if you think spending 40k a year to compete with a coffee shop a block away, is a good use of public money, go ahead and defend it.
Isab at January 10, 2014 2:46 PM
". Nearly everyone I work with is in the same boat. We get paid less than the people who take your order at McDonald's or pick up your garbage"
Which kind of begs the question as to why you all aren't doing those other things, that pay more.
I guess the intellectual snob appeal of working at the "library" and being a "do gooder" at taxpayer expense, trumps actually having to find a job in private enterprise.
Isab at January 10, 2014 3:13 PM
Wait...librarians make less than minimum wage? Are you sure about that? As for the guys who collect trash, those guys hustle for every nickel they make. That is a hard, unpleasant job and they should make decent money. My friend's husband works in HR for Waste Management and says that the guys get bonuses for being quick and efficient. It seems snobbish to me to suggest that sitting behind a desk in an air conditioned office swiping books all day is somehow morally superior. I can say this because I work in our local library as a volunteer often and see the work that gets done.
Sheep mommy at January 10, 2014 3:30 PM
I love our local library! It's maybe 1,000 square feet total. There's a dual fall out shelter/ senior citizen day center in the basement, so the place often smells like mashed potatoes. Every season brings a used books/ knit goods/ bake sale fundraiser, and the librarians know all the after-school kids by name. The plum tree in the front yard was so prodigiously fruitful that the library director stood up at a local Rotary meeting and asked everyone to please take as many plums as possible. I made jam for the first time and shared the extra and the recipe with a timeless librarian who I learned had lived in Brazil and spoke fluent Portuguese. Cozy, vibrant, sweetly calamitous. And sometimes they're forgiving of the fines.
Apropos of nothing.
Michelle at January 10, 2014 6:34 PM
"Apropos of nothing."
Apropos of EVERYTHING that makes a community a community.
Gog_Magog_Carpet_Reclaimers at January 10, 2014 10:02 PM
Point taken :)
Michelle at January 11, 2014 7:56 AM
As others have said here - it isn't fair that different folks are charged different rates for the same product. And one group is forced to, unknowingly, pay for the other group.
I would also like to add that what makes these groups different isn't something so cut and dry - it is college administrators and government bureaucrats who make such decisions and they really don't have all the facts as they "pigeonhole" students.
Yep, this one "rich" that one "poor" based upon what, I ask? Some chart or "formula" that they developed?
While this is only anecdotal, I remember 30 years ago when I went to school I watched as other richer classmates got grants that I didn't get. Why? By the time I went to college, my parents had paid off their small house while those other students' parents owned bigger houses that they still were paying a mortgage on. The state looked at them as being "more deserving" than me as my parents didn't have a huge debt to income ratio as they did. In fact, the grant administrator told my father that he might want to consider taking out a second mortgage just to increase his debt so that I would qualify for a state grant.
That to me, was totally fucked up. Save your money and you're viewed as being "wealthy." Spend beyond your means and you're "deserving" of financial help.
Gee, I guess in 30 years things really haven't changed that much, have they? Buy a house you cannot make payments on, get the taxpayer to bail you out, run your company into the ground and get the taxpayer to bail you out, don't buy your own health insurance when you are young and healthy get the taxpayer to bail you out when you need health insurance. Man, I have been on the "wrong side" of this equation my whole life!
Charles at January 11, 2014 9:33 PM
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