Claim: Average Taxpayers Are Heavily Supporting Elite Colleges

January 24, 2012 at 10:22 am 4 comments

I don’t understand the claim of this study, which makes it hard for me to believe it.  I can sort of see how it’s possible that average taxpayers are providing subsidies to elite public schools.  While the state contribution to elite state universities are decreasing, because the elites are so much more expensive, they probably still take a larger part of state taxpayer dollars than other institutions in the state.  But elite private schools?  How?  Through Pell Grants and other federal programs?  How can that be more than the non-profits and middles?

An October study by the American Enterprise Institute (AEI) entitled “Cheap for Whom?” showed one way that  the university system is rigged in favor of the rich. It said:  “Average taxpayers provide more in subsidies to elite public and private schools than to the less competitive schools where their own children are likely being educated…. Among not-for-profit institutions, the amount of taxpayer subsidies hovers between $1,000 and $2,000 per student per year until we turn to the most selective institutions . . . Among these already well-endowed institutions, the taxpayer subsidy jumps substantially to more than $13,000 per student per year.”

via Average Taxpayers Are Heavily Supporting Elite Colleges.

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4 Comments Add your own

  • 1. Chris Goedde  |  January 24, 2012 at 11:04 am

    Well, it’s the AEI, so ….

    The actual report is here:

    Click to access 08-EduO-Schneider-Oct-2011-gnew.pdf

    From the appendix on page 6, it looks like they are counting “Government support, including federal grants and contracts, plus federal appropriations, including the sum of Pell, Academic Competitiveness, and National SMART grants”. It wouldn’t surprise me if elite institutions pull in enough money from NSF/NIH/DOE/AFOSR, etc. to raise their per-student “subsidies” well above those of non-elite institutions.

  • 2. gasstationwithoutpumps  |  January 24, 2012 at 1:55 pm

    I suspect that the report has confused research support with support for students. As long as our university leadership pretends that money for one can replace money for the other, it is no wonder that bloggers and legislators get confused.

  • 3. Fred Martin  |  January 24, 2012 at 11:17 pm

    The report also helpfully explains that “because for-profit institutions receive no state appropriations and pay income taxes, they cost the taxpayer nothing—indeed, they return a net ‘profit’ to the taxpayer.”

    I’m sure they couldn’t have ignored the higher-than-average student loan default rates at the for-profits — right?

  • 4. Andrew Bernat  |  January 25, 2012 at 10:17 am

    Consider the source of this claim.


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