Reply to How Princeton is Getting Around the Endowment Tax

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[quote=Anonymous][quote=Anonymous]
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 [b]that obviously will no longer be used for aid awards. [/b] It sounds like Princeton might have a chance to get out of some of it, but some of the others will not.[/quote]

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.[/quote]

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