This Is What (1 – Our High Percentage of Students on Financial Aid) Means

tumblr_lt876fT6sp1r25y9yo1_500

A couple of recent posts about the overrepresentation of wealthy students at top colleges and universities have been traveling hither and yon across the internets. While I’m happy that this problem is finally getting the exposure it deserves, it really is a belated and insufficient statement of the obvious. When a college proudly proclaims that some high percentage of students receive financial aid, what that obscures is the reality that “1 – some high percentage of students” has no need for aid:

But why college costs so much is an important question. In the ultimate sense, colleges charge what the market will bear (even if that market is massively subsidized and distorted): when you hear a private institution crowing about how fifty percent of its students receive aid (i.e., it’s socioeconomically diverse), remember this means that half of the students come from families that can pay $40,000 to $50,000 per year in cash. When you account for families with more than one child–and children often overlap–we’re talking about families that can plunk down $80,000 to $100,000 for a couple of years in a row, with some $50,000 years in the front and back to boot.

It’s important to phrase the problem this way because it’s yet another form of class massacre by the wealthy perpetrated against the middle class and the poor. Because once this is understood to be the underlying problem–the bidding up of an inelastic positional good by the wealthy, whose incomes have risen faster than everyone else’s–you wind up in a very different policy space, albeit one that the target advertising audience for The Atlantic and Business Insider would not necessarily like…

This entry was posted in Economics, Education. Bookmark the permalink.