Reply to Suit Accuses Georgetown, Penn and M.I.T. of Admissions Based on Wealth

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]
I’m trying to understand how admitting full pay students harms other students by increasing their costs. I think that is what the lawsuit is claiming, is that right? [/quote]
Well, that brings up an interesting point. The colleges colluded on financial aid formulas, for which the supposed damages are reduced need-based aid to individuals. However, that was completely allowed under the carve-out exception as long as the universities were need-blind. If the universities intentionally admitted students who were [i]much more[/i] than merely full pay, seems irrelevant to the alleged damages, at a minimum, and quite possibly increased the level of generosity of financial aid.

If the allegation is that the financial aid formulas would have been more generous if the universities had not intentionally admitted big donor students, that makes no sense. Universities may have had budget line items for post-enrollment donations from prospective families that supported the level of generosity in the financial aid formulas.[/quote]

The allegation is that the collusion on financial aid hurt the recipients. The collusion was allowed because there was an anti-trust carve out for need blind schools. The definition of need bling in the carve out required that "all students" be admitted on a need blind basis. By showing that the universities did not admit "all students" on a need blind basis, the Plaintiffs argue that the antitrust exemption does not apply and that the collusion was illegal. [/quote]

I don't understand. Colleges need to budget their FA don't they? They can not literally admit 2000 per class that ALL need aid. They would go broke. [/quote]

need blind schools wouldn't go broke. they could afford it.

if you can't afford that, then you have to say you're need aware. that's fair.

but dont say need blind if you're not[/quote]

But to be -- and stay -- need blind, you need to do what? Raise a crap ton of money. People fighting this are cutting of their noses to spite their faces.[/quote]

From what I gather, among the elite private universities an applicant's ability to pay full tuition isn't that consequential. The endowments of these schools and the research dollars they bring in - except for Georgetown - is enormous. A few million dollars of financial aid is nothing. It's the cost of doing business to get the best students. What gets you on a preferred admissions list is the likelihood of significant future donations. These students come from very high net worth families. And schools look at them and think ka-ching and give them preferential treatment.

Is it wrong? I don't know. If a school admits too many dumb rich kids their reputation will fall. But the money those families donate does support the rest of the school and allows them to maintain all the things that support a quality education. This isn't about tuition dollars. [b]This is about seven and eight figure donations. It's a balancing act for these schools.[/b] What bothers me the most is collusion. I have a kid at one of the private universities listed in the lawsuit. That university settled and we actually got a check from them. It wasn't much, but it was an admission of guilt when it comes to colluding about financial aid.

I think private universities should be free to do as they wish when it comes to choosing who they admit. As long as they remain in their silos. But if the elite universities are colluding amongst themselves when it comes to financial aid, that's a big problem. And hopefully that's come to an end. [/quote]

Agree. if you are not in this world, you don't realize what the $$$ looks like. It's not a million dollars. Its a 25 million INITIAL gift to a new initiative or pet project of the president's - followed by MORE - to eventually get to $100 million or usually more. Especially if admitting the first of several children....

Schools need this private funding for ALL of the various pet projects and initiatives that are NOT funded by the endowment. This isn't about funding the school's financial aid. These are the pet projects that presidents at universities get famous for.[/quote]

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