Thingish Things

Social Engineering 101

Written By: William F. B. O'Reilly - Apr• 12•11

I walked to the train this morning with a neighbor whose son just enrolled at a great SUNY school. He had been accepted at a number of top private universities;  he had even been offered scholarships to attend them. But with the costs of those schools exceeding $40,000 and $50,000 per year, there was just no way. The debt he would have incurred over four years would have been life hobbling.

The student comes from a hard working, two-income middle class family. Both parents went to private colleges and both are highly-skilled professionals. But their children won’t be able to go to private universities. They simply cost too much today.

SUNY schools are excellent. There is nothing this newly enrolled young man will be unable to achieve by matriculating at the one he will be attending. But it is striking to me that, for so many parents like my neighbors, the opportunities for their children already have become more limited than the ones they had.

I went to an event last night with a Montana congressman deeply involved in federal education issues. He talked  with concern about the dramatic increase in Pell grants next year — scholarship funds to families with lower incomes. They will be jumping from something like $14 billion to $49 billion, despite the federal deficit.

I don’t know this for sure, but I suspect my neighbors would not qualify for Pell. Their gross income — never mind the expenses they face living in a Northeast suburb — would put them over the threshold. But that same income almost assuredly qualifies them to help pay for private university schooling for other people’s children.

This couple lives in Westchester, the county with the highest property taxes in America. So they get socked there.  They clearly make enough money to pay federal income taxes — almost half of all Americans pay none — and they pay all the cumulative nuisance taxes that have made New York the worst ranked tax climate in the country. What they have left over is insufficient to pay for a prestigious private education for their son.

It burns me up when highly organized groups like New York’s Working Families Party use the middle class moniker on rally signs in Albany and elsewhere to call for higher taxes and more spending.  They purport to be the middle class’s champion, yet they are systematically destroying it.

In five years, my neighbor’s son will sit for a job interview. One hopes he nails it. Because the next candidate interviewed may have Yale on his resume, paid for by the SUNY student’s parents and others in similar circumstances.

It is social engineering at its worst. And the middle class is paying for it.

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  1. Your Friend says:

    It’s funny how we always see these issues differently. I see a really big part of the problem as being the profit motive in the education system. Private universities have been raising tuition annually at a rate double inflation for decades. That borders on the criminal, but they’ll keep doing it as long as they have more applicants than open enrollment positions. That’s the problem with a market driven economy. As the demographic shifts drastically in the coming decades, they may regret the high prices, but I’m guessing there will always be plenty of international students willing to pony up the ticket for the best education in the world. So all we can really do is vote with our feet — go to SUNY, instead of Princeton; move to Connecticut or New Jersey instead of living in the tax h*ll of New York (and whatever you do, don’t die in NY — the worst estate taxes in the nation).

    Now stop and think about the fact that these universities also have enormous endowments (see Wiki link and pay special attention to the list of endowments per enrolled student) and, most maddeningly, they pay no taxes on any net returns on those investments. Why aren’t you and your friend mad about that? Princeton has $1.7M in endowment for every enrolled student. A return of 4% on that number would pay the entire tuition of each of those students, so why do they charge tuition at all? And it keeps getting bigger and they never pay any taxes on it.

    Now for the reality on the numbers. The 2011 Pell budget is just under $35B. That is, substantially less than 1% of the total federal budget. Max Pell grant aid per student is $5,500 (which will be cut by $1,000 thanks to the really stupid budget cuts just enacted) so no low income student can go to any state university without borrowing money to do so. Or, they can join the military and get a free ride on their education after they lose an arm in Iraq. Total military expenditures in our country will be well over $1T in 2011, up 81% in the last decade. No anger over that, huh? Everyone is just fine that? In this country, we don’t need smart kids, because we have smart bombs. Bombs away…

  2. Great points, Dwight. I am wide open to many of them. And I am angry at the universities. They have a scam going. Federal and state dollars will pay whatever they ask and they have abused that public generosity. There is no way private college has to cost what it does.

  3. Me says:

    For starters, colleges need to stop turning their campuses into country clubs and dorm rooms into suites at the Plaza. It’s insane.

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