How Princeton is Getting Around the Endowment Tax

[Anonymous]

Don't care, you're in the top 2% of income. Should have made better financial decisions

[Anonymous]

Anonymous wrote:
I agree that that does not make sense. But I don't know if you're in a position to fundamentally change how Princeton calculates their financial aid so you probably should go with the system they are using.

And things are only going to get worse across the board for financial aid at places like Princeton. They are about to get whacked with hundreds of millions of dollars in endowment taxes that obviously will no longer be used for aid awards. It sounds like Princeton might have a chance to get out of some of it, but some of the others will not.

It sounds like you have no idea how much money these places have, and no, they are not using it all on aid - that’s the reason the government wants to start taxing them a lot more. Harvard for example has BILLIONS of dollars in their endowment fund. They could literally give full free ride to every single student in perpetuity, just from the investment earnings without touching the principal, but they don’t. Instead, they give aid to the irresponsible ones, and the responsible ones who aren’t actually rich can’t have Harvard as an option for their kids. And btw, the PP above is correct that the reason the sticker price is so high in the first place is because those families who are paying for their kids’ educations are also subsidizing others. And meanwhile, the endowment funds just keep growing and growing. I agree with the government on this that something needs to change. Yes, it’s a free country and you’re free to do what you want and just not go there if you don’t want to pay the price, whatever that is, but then the government shouldn’t be doing you any favors when it comes to not charging you the tax that you really should have been paying all along. Harvard wouldn’t have been able to amass a couple of billion dollars (something like a million dollars per student - just think about that) if they had to pay proper amounts of tax on their earnings and if people couldn’t claim tax deductions for donating to Harvard in the first place when the money isn’t benefiting students but just building their already obscene wealth.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just here to reiterate that "getting more students into the non-tuition-paying category" means students admitted and choosing to enroll, in a need-blind admissions environment.

They should drop the pretense of need-blind since need will, in fact, play a role in this process one way or another. Right now it's on the back end, but one bad algorithm from enrollment management consulting can really mess with the budget.

Because of Princeton's current numbers, it wouldn't need to drop its need blind policy; it can get where it wants without doing so, by giving more aid to students already getting it. But i agree that there are other schools (like Dartmouth) that would really have to go need-aware (in favor of those who have need) in order to get to fewer than 3,000 tuition-paying students.

Does the law say fewer than 3000 tuition paying students or fewer than 3000 tuition paying undergraduates? If it is the former, Dartmouth could never do this - they have a med school, law school, etc, none of which Princeton has. So Dartmount probably has >>10k students. Princeton has almost exclusively PhDs which don't pay tuition.

Your numbers are way off. Dartmouth has 6700 students, only 1100 or so are med and business. There is no law school.

[Anonymous]

Anonymous wrote:Making $400k is $240k after tax. Princeton total COA is $84k. It's downright laughable that some of you think spending 35% of post tax income on one child's tuition is "easy" or a good use of money.

If you do, you either have other sources of income or are terrible with money.

Or they understand that you should have been saving in advance instead of trying to cash flow all of it.

[Anonymous]

I’m not cash flowing college or retirement. I planned and saved.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Making $400k is $240k after tax. Princeton total COA is $84k. It's downright laughable that some of you think spending 35% of post tax income on one child's tuition is "easy" or a good use of money.

If you do, you either have other sources of income or are terrible with money.

Or they understand that you should have been saving in advance instead of trying to cash flow all of it.

Some of us have no generational wealth. We were busy paying for our own educations, and deposit on home, childcare etc, and then had to start putting aside something for retirement so we aren’t a burden on our kids or other taxpayers to deal with in a couple of decades. For those of you with elite educations paid for by mommy and daddy and house deposit given by grandparents, and who started your adult lives with no debt, and have a sizable inheritance coming, you can’t possibly understand what life is like for the rest of us.

[Anonymous]

Frankly, there shouldn’t be financial aid from the colleges at all. People should be able to get loans for all of it if they need to, and there should be merit scholarships for deserving people plus some demographic specific scholarships to encourage particular groups of people, if they are funded by private organizations (not taxpayers). But that’s it. Then the endowments should need to be used to lower sticker price for everyone equally.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Making $400k is $240k after tax. Princeton total COA is $84k. It's downright laughable that some of you think spending 35% of post tax income on one child's tuition is "easy" or a good use of money.

If you do, you either have other sources of income or are terrible with money.

Or they understand that you should have been saving in advance instead of trying to cash flow all of it.

Some of us have no generational wealth. We were busy paying for our own educations, and deposit on home, childcare etc, and then had to start putting aside something for retirement so we aren’t a burden on our kids or other taxpayers to deal with in a couple of decades. For those of you with elite educations paid for by mommy and daddy and house deposit given by grandparents, and who started your adult lives with no debt, and have a sizable inheritance coming, you can’t possibly understand what life is like for the rest of us.

We’re talking about people making $400k so no, sorry, there’s no excuse for not having saved something. Even for people peaking at $400k, they didn’t just suddenly end up there, they had years of making in the $200s and $300s. And for the PP to accuse people who don’t understand of being “terrible with money” is what is so funny, because the people who are truly terrible with money are the ones who can make these amounts and fail to save for their kids’ college.

I know all of this because neither my spouse nor I come from generational wealth nor did we get help on any of the things you mentioned, and our HHI is about $350k, and I know exactly how feasible saving for college is.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just here to reiterate that "getting more students into the non-tuition-paying category" means students admitted and choosing to enroll, in a need-blind admissions environment.

They should drop the pretense of need-blind since need will, in fact, play a role in this process one way or another. Right now it's on the back end, but one bad algorithm from enrollment management consulting can really mess with the budget.

Because of Princeton's current numbers, it wouldn't need to drop its need blind policy; it can get where it wants without doing so, by giving more aid to students already getting it. But i agree that there are other schools (like Dartmouth) that would really have to go need-aware (in favor of those who have need) in order to get to fewer than 3,000 tuition-paying students.

Does the law say fewer than 3000 tuition paying students or fewer than 3000 tuition paying undergraduates? If it is the former, Dartmouth could never do this - they have a med school, law school, etc, none of which Princeton has. So Dartmount probably has >>10k students. Princeton has almost exclusively PhDs which don't pay tuition.

Your numbers are way off. Dartmouth has 6700 students, only 1100 or so are med and business. There is no law school.

I wasn't the PP you're responding to, but even with your numbers, but it would require a monumental change to its business for Dartmouth to get to fewer than 3,000 tuition-paying students. Of the remaining 5,600 students, fewer than 1,900 would need to be tuition-paying. Presently about half of undergraduates, or about 2,200, are full-pay. Even if we assume that all of the other undergrads receive grants exceeding full tuition (and that is almost certainly not the case), that leaves 2,200 undergrads and 1,100 med and business students paying tuition. So Dartmouth would need to increase by 300 the number of undergrads receiving aid and give them huge awards. I don't see how Dartmouth can do this without becoming need-aware and favoring students with significant financial need.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Making $400k is $240k after tax. Princeton total COA is $84k. It's downright laughable that some of you think spending 35% of post tax income on one child's tuition is "easy" or a good use of money.

If you do, you either have other sources of income or are terrible with money.

Or they understand that you should have been saving in advance instead of trying to cash flow all of it.

Some of us have no generational wealth. We were busy paying for our own educations, and deposit on home, childcare etc, and then had to start putting aside something for retirement so we aren’t a burden on our kids or other taxpayers to deal with in a couple of decades. For those of you with elite educations paid for by mommy and daddy and house deposit given by grandparents, and who started your adult lives with no debt, and have a sizable inheritance coming, you can’t possibly understand what life is like for the rest of us.

Most of us are the rest of us. Who the hell has their education paid for by Mommy and Daddy and a house deposit given by grandparents and no debt? Most people have none of that.

And there's a lot of people that can't afford to go to Princeton University. Not being able to afford Princeton University is not a tragedy. People are struggling to pay the rent and bye food.

[Anonymous]

Buy food

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just here to reiterate that "getting more students into the non-tuition-paying category" means students admitted and choosing to enroll, in a need-blind admissions environment.

They should drop the pretense of need-blind since need will, in fact, play a role in this process one way or another. Right now it's on the back end, but one bad algorithm from enrollment management consulting can really mess with the budget.

Because of Princeton's current numbers, it wouldn't need to drop its need blind policy; it can get where it wants without doing so, by giving more aid to students already getting it. But i agree that there are other schools (like Dartmouth) that would really have to go need-aware (in favor of those who have need) in order to get to fewer than 3,000 tuition-paying students.

Does the law say fewer than 3000 tuition paying students or fewer than 3000 tuition paying undergraduates? If it is the former, Dartmouth could never do this - they have a med school, law school, etc, none of which Princeton has. So Dartmount probably has >>10k students. Princeton has almost exclusively PhDs which don't pay tuition.

Your numbers are way off. Dartmouth has 6700 students, only 1100 or so are med and business. There is no law school.

I wasn't the PP you're responding to, but even with your numbers, but it would require a monumental change to its business for Dartmouth to get to fewer than 3,000 tuition-paying students. Of the remaining 5,600 students, fewer than 1,900 would need to be tuition-paying. Presently about half of undergraduates, or about 2,200, are full-pay. Even if we assume that all of the other undergrads receive grants exceeding full tuition (and that is almost certainly not the case), that leaves 2,200 undergrads and 1,100 med and business students paying tuition. So Dartmouth would need to increase by 300 the number of undergrads receiving aid and give them huge awards. I don't see how Dartmouth can do this without becoming need-aware and favoring students with significant financial need.

The estimated tax for Dartmouth per the other thread with the AEI link is $32 million. 300 undergrads getting full tuition and fees of ~$71,500 is ~$21.5 million. So, there is space to do this, depending on the exact numbers.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Making $400k is $240k after tax. Princeton total COA is $84k. It's downright laughable that some of you think spending 35% of post tax income on one child's tuition is "easy" or a good use of money.

If you do, you either have other sources of income or are terrible with money.

Or they understand that you should have been saving in advance instead of trying to cash flow all of it.

Some of us have no generational wealth. We were busy paying for our own educations, and deposit on home, childcare etc, and then had to start putting aside something for retirement so we aren’t a burden on our kids or other taxpayers to deal with in a couple of decades. For those of you with elite educations paid for by mommy and daddy and house deposit given by grandparents, and who started your adult lives with no debt, and have a sizable inheritance coming, you can’t possibly understand what life is like for the rest of us.

Most of us are the rest of us. Who the hell has their education paid for by Mommy and Daddy and a house deposit given by grandparents and no debt? Most people have none of that.

And there's a lot of people that can't afford to go to Princeton University. Not being able to afford Princeton University is not a tragedy. People are struggling to pay the rent and bye food.

The question is why should it be free for some people and not for others. If access is an issue, of course we should give out loans. But why should some people graduate with massive loans to pay and others graduate with none? If your family doesn’t pay for college then you should graduate with a full loan to pay back that’s the same as others whose parents didn’t pay. It is not fair otherwise.

[Anonymous]

In this current environment, this could level the playing field for middle class families who are NOT full pay. It seemed to trend that full pay families would overwhelmingly benefit from fewer student loans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Making $400k is $240k after tax. Princeton total COA is $84k. It's downright laughable that some of you think spending 35% of post tax income on one child's tuition is "easy" or a good use of money.

If you do, you either have other sources of income or are terrible with money.

Or they understand that you should have been saving in advance instead of trying to cash flow all of it.

Some of us have no generational wealth. We were busy paying for our own educations, and deposit on home, childcare etc, and then had to start putting aside something for retirement so we aren’t a burden on our kids or other taxpayers to deal with in a couple of decades. For those of you with elite educations paid for by mommy and daddy and house deposit given by grandparents, and who started your adult lives with no debt, and have a sizable inheritance coming, you can’t possibly understand what life is like for the rest of us.

Most of us are the rest of us. Who the hell has their education paid for by Mommy and Daddy and a house deposit given by grandparents and no debt? Most people have none of that.

And there's a lot of people that can't afford to go to Princeton University. Not being able to afford Princeton University is not a tragedy. People are struggling to pay the rent and bye food.

The question is why should it be free for some people and not for others. If access is an issue, of course we should give out loans. But why should some people graduate with massive loans to pay and others graduate with none? If your family doesn’t pay for college then you should graduate with a full loan to pay back that’s the same as others whose parents didn’t pay. It is not fair otherwise.

Why the heck do you even want to go to Princeton University? Princeton seems to operating in a very different value system then you. They want to offer generous financial aid. If you don't like it, don't go to Princeton. Instead of trying to change this University, find one that suits you.