How Princeton is Getting Around the Endowment Tax

[Anonymous]

They need the lobbyists to work to change that to 3k tuition paying undergrad

[Anonymous]

Anonymous wrote:

Anonymous wrote:Seems like a win for everyone!

Seems like it makes the endowment tax arbitrary stupid nonsense. Don't tax Princeton but tax MIT. Don't text Amherst or NYU but tax Notre Dame. This whole thing just seems pointless.

Heavily disagree. Liberal arts colleges aren't exactly hoarding cash anywhere close to the research universities, and they really extensively off of endowment withdraws to continue operating. LACs dominate best schools for financial aid.

Now onto why MIT but not Princeton. Princeton is choosing to give a substantial amount of aid, which means more American families will be able to attend. This is an accountability tax that seems to have worked very successfully.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I've never attended one of these private schools with the massive need-based aid programs. Is it a weird dichotomy with basically only poor kids and rich kids and no real middle class?

I attended a state school so there were basically all types of kids, but lots of middle class.

Yup. It is the barbell. Low income (which includes a number of middle income people in this case) go for free so don't care about sticker price. Super rich people don't care about sticker price. Those who are just above the threshold get squeezed - $100k a year is still meaningful to them when there is a much cheaper option. No one cries for the families in high cost of living areas making $400k a year, but going to Princeton will not be easy. Ironically, many legacies fit in this bucket - contrary to popular opinion, most Ivy alums are UMC, not rich.

I was an UMC full pay at an Ivy+ 30 years ago. I was far from ostentatious, but I had a car (a hand-me-down Toyota Camry from my grandparents) and would occasionally go out for dinner, to concerts, etc. on weekends (nowhere fancy). But I had friends who had to think twice about coming to dinner and doing other things that many took for granted. There were plenty of people who advertised their wealth much more, and it was a challenge. And this has likely just gotten worse.

Affording Princeton should be pretty damn easy on a 400k/year salary.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've never attended one of these private schools with the massive need-based aid programs. Is it a weird dichotomy with basically only poor kids and rich kids and no real middle class?

I attended a state school so there were basically all types of kids, but lots of middle class.

Yup. It is the barbell. Low income (which includes a number of middle income people in this case) go for free so don't care about sticker price. Super rich people don't care about sticker price. Those who are just above the threshold get squeezed - $100k a year is still meaningful to them when there is a much cheaper option. No one cries for the families in high cost of living areas making $400k a year, but going to Princeton will not be easy. Ironically, many legacies fit in this bucket - contrary to popular opinion, most Ivy alums are UMC, not rich.

I was an UMC full pay at an Ivy+ 30 years ago. I was far from ostentatious, but I had a car (a hand-me-down Toyota Camry from my grandparents) and would occasionally go out for dinner, to concerts, etc. on weekends (nowhere fancy). But I had friends who had to think twice about coming to dinner and doing other things that many took for granted. There were plenty of people who advertised their wealth much more, and it was a challenge. And this has likely just gotten worse.

Affording Princeton should be pretty damn easy on a 400k/year salary.

If you are now peaking at $400k (as opposed to having made that much for the past 5-10 years) and live in a high cost of living area (please don't tell me I should move - it doesn't work like that), multiple kids, didn't start saving until later in life due to your own loans, then not really. I'm not saying anyone should take up a collection for these people, but it is not "easy."

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Princeton makes financial aid changes presumably to get it to fewer than 3,000 “tuition-paying” students.

https://www.princeton.edu/news/2025/08/07/princeton-enhances-financial-aid-again-it-welcomes-class-2029-which-includes

If the administrations top "targets" start adjusting to avoid being taxed I expect the IRS regs to get reinterpreted to cut off the easy paths out of taxation. A few schools could just eliminate tuition but that isn't feasible for most. I suspect longer term "tuition paying" will be replaced with a strict size limit which protects Hillsdale but cuts off the avoidance opportunities for the Ivy schools. Top SLACs are going to win big as this shakes out as they are resource rich, not dependent on federal money, and are effectively shielded because of the republican desire to protect Hillsdale at all costs.

Second bolded sentence is why the first probably won’t happen. Only a few schools can do this. That, and the IRS already was challenged on this previously during the public consultation process in 2020 and would likely lose the ensuing lawsuit since they are on record defending the current approach, without a good legal rationale for changing course now. Congress could have taken “tuition-paying” out of the legislation, but didn’t.

The current approach isn't the previous approach which was solely based on endowment size. It may be similar but it isn't the same and is open to revisiting from a regulatory standpoint. More important is the simple fact that this administration doesn't care, they want to punish. Harvard can do anything that Princeton does to get around the tax and I'm not buy the idea that the buffoons in the Whitehouse will meekly allow workarounds. They will aggressively work to ensure punishment.

You can’t regulate in a way that is inconsistent with the plain language of a statute. The Trump Supreme Court has made that clear. The IRS can’t write “tuition-paying” out of the statute.

Let’s just wait and see how things turn out when Princeton tries to get creative.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Seems like a win for everyone!

Seems like it makes the endowment tax arbitrary stupid nonsense. Don't tax Princeton but tax MIT. Don't text Amherst or NYU but tax Notre Dame. This whole thing just seems pointless.

Heavily disagree. Liberal arts colleges aren't exactly hoarding cash anywhere close to the research universities, and they really extensively off of endowment withdraws to continue operating. LACs dominate best schools for financial aid.

Now onto why MIT but not Princeton. Princeton is choosing to give a substantial amount of aid, which means more American families will be able to attend. This is an accountability tax that seems to have worked very successfully.

MIT is as generous as anyone when it comes to aid.

[Anonymous]

The article’s breakdown of accepted students shows you how much hooks help. More than 50% of the class comes from legacy, first gen, and low income…that’s without even considering geographic location, military rotc/nrotc/etc, athletes, etc.

[Anonymous]

And children of college professors and international students. So basically no one else attends.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've never attended one of these private schools with the massive need-based aid programs. Is it a weird dichotomy with basically only poor kids and rich kids and no real middle class?

I attended a state school so there were basically all types of kids, but lots of middle class.

Yup. It is the barbell. Low income (which includes a number of middle income people in this case) go for free so don't care about sticker price. Super rich people don't care about sticker price. Those who are just above the threshold get squeezed - $100k a year is still meaningful to them when there is a much cheaper option. No one cries for the families in high cost of living areas making $400k a year, but going to Princeton will not be easy. Ironically, many legacies fit in this bucket - contrary to popular opinion, most Ivy alums are UMC, not rich.

I was an UMC full pay at an Ivy+ 30 years ago. I was far from ostentatious, but I had a car (a hand-me-down Toyota Camry from my grandparents) and would occasionally go out for dinner, to concerts, etc. on weekends (nowhere fancy). But I had friends who had to think twice about coming to dinner and doing other things that many took for granted. There were plenty of people who advertised their wealth much more, and it was a challenge. And this has likely just gotten worse.

Affording Princeton should be pretty damn easy on a 400k/year salary.

If you are now peaking at $400k (as opposed to having made that much for the past 5-10 years) and live in a high cost of living area (please don't tell me I should move - it doesn't work like that), multiple kids, didn't start saving until later in life due to your own loans, then not really. I'm not saying anyone should take up a collection for these people, but it is not "easy."

Yes it is. We're in that exact situation and our child's tuition is not a problem.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've never attended one of these private schools with the massive need-based aid programs. Is it a weird dichotomy with basically only poor kids and rich kids and no real middle class?

I attended a state school so there were basically all types of kids, but lots of middle class.

Yup. It is the barbell. Low income (which includes a number of middle income people in this case) go for free so don't care about sticker price. Super rich people don't care about sticker price. Those who are just above the threshold get squeezed - $100k a year is still meaningful to them when there is a much cheaper option. No one cries for the families in high cost of living areas making $400k a year, but going to Princeton will not be easy. Ironically, many legacies fit in this bucket - contrary to popular opinion, most Ivy alums are UMC, not rich.

I was an UMC full pay at an Ivy+ 30 years ago. I was far from ostentatious, but I had a car (a hand-me-down Toyota Camry from my grandparents) and would occasionally go out for dinner, to concerts, etc. on weekends (nowhere fancy). But I had friends who had to think twice about coming to dinner and doing other things that many took for granted. There were plenty of people who advertised their wealth much more, and it was a challenge. And this has likely just gotten worse.

Affording Princeton should be pretty damn easy on a 400k/year salary.

If you are now peaking at $400k (as opposed to having made that much for the past 5-10 years) and live in a high cost of living area (please don't tell me I should move - it doesn't work like that), multiple kids, didn't start saving until later in life due to your own loans, then not really. I'm not saying anyone should take up a collection for these people, but it is not "easy."

You are describing maybe 0.1% of the population. Can’t develop policy for 0.1% scenarios.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've never attended one of these private schools with the massive need-based aid programs. Is it a weird dichotomy with basically only poor kids and rich kids and no real middle class?

I attended a state school so there were basically all types of kids, but lots of middle class.

Yup. It is the barbell. Low income (which includes a number of middle income people in this case) go for free so don't care about sticker price. Super rich people don't care about sticker price. Those who are just above the threshold get squeezed - $100k a year is still meaningful to them when there is a much cheaper option. No one cries for the families in high cost of living areas making $400k a year, but going to Princeton will not be easy. Ironically, many legacies fit in this bucket - contrary to popular opinion, most Ivy alums are UMC, not rich.

I was an UMC full pay at an Ivy+ 30 years ago. I was far from ostentatious, but I had a car (a hand-me-down Toyota Camry from my grandparents) and would occasionally go out for dinner, to concerts, etc. on weekends (nowhere fancy). But I had friends who had to think twice about coming to dinner and doing other things that many took for granted. There were plenty of people who advertised their wealth much more, and it was a challenge. And this has likely just gotten worse.

Affording Princeton should be pretty damn easy on a 400k/year salary.

Ha. At a different Ivy - 2 kids $180k/year is not easy on that salary in this area. It’s kind of ridiculous people with half that go free when we literally give 50% of our income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've never attended one of these private schools with the massive need-based aid programs. Is it a weird dichotomy with basically only poor kids and rich kids and no real middle class?

I attended a state school so there were basically all types of kids, but lots of middle class.

Yup. It is the barbell. Low income (which includes a number of middle income people in this case) go for free so don't care about sticker price. Super rich people don't care about sticker price. Those who are just above the threshold get squeezed - $100k a year is still meaningful to them when there is a much cheaper option. No one cries for the families in high cost of living areas making $400k a year, but going to Princeton will not be easy. Ironically, many legacies fit in this bucket - contrary to popular opinion, most Ivy alums are UMC, not rich.

I was an UMC full pay at an Ivy+ 30 years ago. I was far from ostentatious, but I had a car (a hand-me-down Toyota Camry from my grandparents) and would occasionally go out for dinner, to concerts, etc. on weekends (nowhere fancy). But I had friends who had to think twice about coming to dinner and doing other things that many took for granted. There were plenty of people who advertised their wealth much more, and it was a challenge. And this has likely just gotten worse.

Affording Princeton should be pretty damn easy on a 400k/year salary.

Ha. At a different Ivy - 2 kids $180k/year is not easy on that salary in this area. It’s kind of ridiculous people with half that go free when we literally give 50% of our income.

You poor poor poor baby. Are you only left with $220,000 a year to survive on? How do you possibly do it?

[Anonymous]

Anonymous wrote:The article’s breakdown of accepted students shows you how much hooks help. More than 50% of the class comes from legacy, first gen, and low income…that’s without even considering geographic location, military rotc/nrotc/etc, athletes, etc.

50% is just not true. Are you just adding up the percentages of those three groups? That's not how the math works. Most of those 16.7% first gen are going to fall within the 25% low income group. Legacies probably do not fall within the low income group, but they only account for 12.7%.

[Anonymous]

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.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've never attended one of these private schools with the massive need-based aid programs. Is it a weird dichotomy with basically only poor kids and rich kids and no real middle class?

I attended a state school so there were basically all types of kids, but lots of middle class.

Yup. It is the barbell. Low income (which includes a number of middle income people in this case) go for free so don't care about sticker price. Super rich people don't care about sticker price. Those who are just above the threshold get squeezed - $100k a year is still meaningful to them when there is a much cheaper option. No one cries for the families in high cost of living areas making $400k a year, but going to Princeton will not be easy. Ironically, many legacies fit in this bucket - contrary to popular opinion, most Ivy alums are UMC, not rich.

I was an UMC full pay at an Ivy+ 30 years ago. I was far from ostentatious, but I had a car (a hand-me-down Toyota Camry from my grandparents) and would occasionally go out for dinner, to concerts, etc. on weekends (nowhere fancy). But I had friends who had to think twice about coming to dinner and doing other things that many took for granted. There were plenty of people who advertised their wealth much more, and it was a challenge. And this has likely just gotten worse.

Affording Princeton should be pretty damn easy on a 400k/year salary.

Ha. At a different Ivy - 2 kids $180k/year is not easy on that salary in this area. It’s kind of ridiculous people with half that go free when we literally give 50% of our income.

And the difference is you have a 2 parent working household (both making $200k) where the households with a parent that never worked are the $200k getting the aid. It’s fkkkd up. They should assign a salary to the non-worker like they do in divorce proceedings.