Fellow New Yorkers, question about new NYS free college tuition program.....

[Jen and Ashwin]

And what kills me is the BILLIONS of dollars colleges have on hand and don't pay taxes on. And yet these same schools get away with taking government aid (taxpayer dollars) plus milking students with higher and higher tuition each year. Not to mention how many kids graduate with four year degrees who are making minimum wage because so many of the majors offered by colleges have no real job potential. And don't think it's just ivy league and big state schools. I worked for a small university who had a billion dollars in endowments yet still charged students $24,000 a year and raised costs at least 10% every year. Some students are much better off going to a community college for a few years or even a trade school. Electricians and plumbers in our area make six figures without a college degree and yet I have friends whose kids aren't even making the poverty level with bachelors degrees in music theory, recreation, or psychology. It's a big racket these universities have going convincing every kids in the US that they must go to college (and offering "fun" majors to recruit them), leaving many of them not ready to be financially independent or ready for the job market.

End of fiscal year 2015 endowment
Harvard University (MA) $37,615,545,000
Yale University (CT) $25,542,983,000
Princeton University (NJ) $22,291,270,000
Stanford University (CA) $22,222,957,000
Massachusetts Institute of Technology $13,474,743,000
University of Pennsylvania $10,133,569,000
University of Michigan—Ann Arbor $9,809,705,000
Texas A&M University—College Station $9,754,202,036
Columbia University (NY) $9,639,065,000 5 (tie)
University of Notre Dame (IN) $8,784,381,000 15 (tie)

Endowments come from private donors, not through tax payers or tuition. And endowments almost always come with stipulations regarding how they can be spent, such as a specific program. Usually the principle in an endowment is never touched and the residual interest is what is used to fund programs. Universities can't just raid the principle because this usually violates the terms of the endowment. So overall endowments can increase significantly over time given more and more donations being made.

As for the institutions that you listed, these are all very fine universities that do a good job preparing their students for jobs after college. Having a diverse set of offerings is important for a well rounded education. What a student decides to pursue a career in is ultimately up to the student. I majored in Women's Studies, which you would probably say was a terrible decision, but it has worked out just fine for me.

 

[cvjw]

We have something similar here in Georgia with the Zell Miller scholarship (free tuition) and the Hope scholarship (partial tuition) funded by the georgia lottery. All of you who have mentioned that it makes getting into state schools harder are correct.

It is next to impossible to get into Georgia Tech and very difficult to get into UGA due to all the brightest Georgia kids staying instate to get free tuition. The second tier universities are still attainable, but the 2 best state schools have been hit hard. It is a double edged sword - the tuition is free, but do you want your kid to go to a second tier in state school?

 

[LadyD]

We have something similar here in Georgia with the Zell Miller scholarship (free tuition) and the Hope scholarship (partial tuition) funded by the georgia lottery. All of you who have mentioned that it makes getting into state schools harder are correct.

It is next to impossible to get into Georgia Tech and very difficult to get into UGA due to all the brightest Georgia kids staying instate to get free tuition. The second tier universities are still attainable, but the 2 best state schools have been hit hard. It is a double edged sword - the tuition is free, but do you want your kid to go to a second tier in state school?

California does not have a scholarship system and I would argue that tuition at a UC is not exactly reasonable for a state school. California has a tiered system for their public schools. The top tier state schools are the UCs. These days to get into a UC, you have to finish within the top 9% of your class after junior year (or some kind of state equivalent) and complete a rigorous study course while maintaining a minimum GPA of 3.0 in these courses with no grade below a C. It is crazy. Below the UCs are the CSUs. They're not as competitive, but you still have to be a good student to get in. Or you can go to one of the many community colleges, save a lot of money, and transfer into a UC after two years and still graduate with the UC degree.

Some states are really just screwed with their higher education.

 

[Cosmic]

Adjusted Gross Income is your income BEFORE deductions and exemptions, so not sure how that would help.

I was mistaken about the standard deduction, but what I specifically was thinking of was the NY 529 college saving plan. For a married couple filing jointly, up to $10,000 put into NY's 529 savings plan comes right off of the AGI. You can see on line 30 of the tax form below that the money is part of the "subtractions" used to calculate the NY AGI starting from the federal AGI.

https://www.tax.ny.gov/pdf/current_forms/it/it201.pdf

Edit: Maybe with three other kids already in college, they were already doing the plan?

 

[Hikergirl]

Thanks NY. I'm so glad you don't bother to take into consideration the fact that there are many families making just above the limit, living in high COL areas with multiple kids to put through college.
But hey I guess I should just keep feeling good about getting the shaft and having to shoulder the financial burden for all those who who can take advantage of your "free" tuition.

 

[Dakota731]

New York already has the highest state taxes in the country and is one of the top five states in financial trouble (not enough money to pay debts, pensions etc) but as long as they don't ask for money from the rest of us to bail them out in a few years, then they can go at it! And why stop at tuition, next time an official needs some votes, let's pay for "free houses" and cars for everyone too!

 

[Dakota731]

Endowments come from private donors, not through tax payers or tuition[/QUOTE

I realize this - I worked in the business office of a university for years. My point was that IN ADDITION to these billions in endowments these schools are still getting TAXPAYER subsidies that cover the operating costs of most colleges and universities ranging from around $8,000 to more than $100,000 for each bachelor’s degree awarded, with most public institutions averaging more than $60,000 per degree.

Among elite private universities, like Harvard and Yale, the average taxpayer subsidy is $13,000 per student per year, while the annual subsidy at the most selective public universities, like the University of North Carolina, Chapel Hill, and the University of California, Los Angeles is more than $23,000 per student annually.

The financial figures reflect the amount of money colleges and universities receive IN DIRECT GOVERNMENT SUPPORT and tax breaks. They do not include loans and grants provided by state and federal governments to help students meet tuition costs.

If any other industry in this country had billions of dollars sitting around yet was still receiving millions of dollars of taxpayer subsidies we'd be outraged. It is a racket pure and simple and I saw first hand that the people who suffer are the middle class who are paying outrageous tuition bills in addition to higher taxes to support an industry that doesn't even pay taxes on these billions of endowment dollars.

 

[Jen and Ashwin]

Among elite private universities, like Harvard and Yale, the average taxpayer subsidy is $13,000 per student per year, while the annual subsidy at the most selective public universities, like the University of North Carolina, Chapel Hill, and the University of California, Los Angeles is more than $23,000 per student annually.

So your point isn't quite true. Taxpayer dollars don't directly go to private universities, but rather those universities benefit from government subsidies in the form of tax deductions for people who make charitable contributions to them. So it isn't actually in addition to endowments. The tax benefits come directly as a result of those endowments. You are saying that these are different things, when in fact they are the same. So for private universities, it isn't direct government support as you state, but rather indirect support through tax breaks for donors.

 

[Dakota731]

In economic terms a tax deduction is the same as government spending. It has to be made up by other taxpayers.

An example from the Berkeley Blog, a few years back, Meg Whitman, of Hewlett-Packard, contributed $30 million to Princeton. In return she received a tax break estimated to be around $10 million.

In effect, Princeton received $20 million from Whitman and $10 million from the U.S. Treasury – that is, from you and me and other taxpayers who made up the difference.

 

[Jen and Ashwin]

In economic terms a tax deduction is the same as government spending. It has to be made up by other taxpayers.

An example from the Berkeley Blog, a few years back, Meg Whitman, of Hewlett-Packard, contributed $30 million to Princeton. In return she received a tax break estimated to be around $10 million.

In effect, Princeton received $20 million from Whitman and $10 million from the U.S. Treasury – that is, from you and me and other taxpayers who made up the difference.

Yeah, I read that blog. But the government didn't give her $10 million, she paid $10 million less in taxes. Many, many people make donations to tax exempt organizations, including universities, and receive tax deductions. I bet you have done this.

Also, there are limits on personal exemptions if your income is over $311,300 if married filing jointly. Anything beyond the that point, all deductions (including charitable contributions) are limited to 80 percent of AGI or 3 percent of the amount by which the income exceeds the limit, whichever is less. (But these limits were probably not in place in this way when Whitman made her donation, so I can only go based on today's tax scheme).

So if we pretend that Meg Whitman made the donation today and had an AGI of $50 million (I have no idea what she makes in a given year, but this is an easy number to work with), she could only deduct $311,300 + ($49,688,700 * 0.03) = $1,801,961. That is nothing close to the $10 million that the article purports.

Now we could have a tax code that more heavily discourages very, very wealthy people from donating money at all. But I personally think that is not advantageous, since many students probably benefited from Whitman's donation. Her donation allowed the University to build a new residential facility which allowed more students to remain in dormitories throughout their 4 years, as well as accommodating some graduate students. But maybe we want really wealthy people just to horde their fortunes and pass all that money to their children upon their death, rather than donate during their lifetimes?

 

[rigs32]

Who is going to pay for all of this tuition? Taking from those that do and giving to those that don't/won't is not social justice.

It's going to cost less than $10 per taxpayer per year. Not much when you consider what we all pay to support K-12 schooling.

 

[wilkeliza]

Thanks NY. I'm so glad you don't bother to take into consideration the fact that there are many families making just above the limit, living in high COL areas with multiple kids to put through college.
But hey I guess I should just keep feeling good about getting the shaft and having to shoulder the financial burden for all those who who can take advantage of your "free" tuition.

I'm sure they did consider and the line had to br drawn somewhere. 125,000 is pretty solid middle class. Sure if you are in Manhattan and have kids on that you'll have to make a lot of decisions but that is the extreme of extreme.

 

[Gracie09]

Thanks NY. I'm so glad you don't bother to take into consideration the fact that there are many families making just above the limit, living in high COL areas with multiple kids to put through college.
But hey I guess I should just keep feeling good about getting the shaft and having to shoulder the financial burden for all those who who can take advantage of your "free" tuition.

no matter where they drew the line some people will be just above it. Some people will have multiple kids in college. At a cost of $10 per taxpayer per year, I don't think its a massive financial burden for people and should generate economic benefits for the state and its citizens.

 

[Hikergirl]

no matter where they drew the line some people will be just above it. Some people will have multiple kids in college. At a cost of $10 per taxpayer per year, I don't think its a massive financial burden for people and should generate economic benefits for the state and its citizens.

No it isnt a massive burden but that isnt the point. Are you in NY?

 

[Hikergirl]

I'm sure they did consider and the line had to br drawn somewhere. 125,000 is pretty solid middle class. Sure if you are in Manhattan and have kids on that you'll have to make a lot of decisions but that is the extreme of extreme.

NY is a large state with many high Col areas beyond just NYC. The families living in those are not the extreme, they are just middle class people who continue to be squeezed out. Ny has the highest outbound migration rate, there is a real reason for that. Think what you want, the people living in ny know the deal. Cant say more without getting political.

 

[wilkeliza]

NY is a large state with many high Col areas beyond just NYC. The families living in those are not the extreme, they are just middle class people who continue to be squeezed out. Ny has the highest outbound migration rate, there is a real reason for that. Think what you want, the people living in ny know the deal. Cant say more without getting political.

I live in NY so I know the deal. I still think they looked at the numbers and figured out what was obtainable but still helped a lot of families. I'm sorry you barely missed out and technically I do too now but I'm not going to crap on the program because I can't use it. Of course I could have if it exsisted back when I was college (and had been a NY state resident I wasn't until after college) but again I never fault programs simply because they don't help me directly.

 

[Hikergirl]

I live in NY so I know the deal. I still think they looked at the numbers and figured out what was obtainable but still helped a lot of families. I'm sorry you barely missed out and technically I do too now but I'm not going to crap on the program because I can't use it. Of course I could have if it exsisted back when I was college (and had been a NY state resident I wasn't until after college) but again I never fault programs simply because they don't help me directly.

If you look back at my post you will see that I didn't fault the program, I faulted the State.
I have no issues with the program, it will help alot of families, including my extended family and some friends.

 

[Dakota731]

And if you believe it when government tells you if will only cost $10 a year then I have some swamp land to sell you. Ever hear of Obamacare?

It's just pathetic when my daughter got paid $50 in interest from her savings account and had to pay taxes on that amount, yet universities are given millions yet don't pay a cent of taxes on that money.

You can say all you want that it's a subsidy or a tax break but it's that much less the government takes in and must be made up somewhere -can you say middle class?

New York State is already the second state in fleeing taxpayers so each year you have less and less taxpayers to pay for more and more social programs and giveaways.

 

[Rantybaby]

What are the requirements for this assistance? NYS resident, GPA and what else? Also, why are OTHER states being mentioned? That's why I'm confused .

 

[Kaytie]

NY is a large state with many high Col areas beyond just NYC. The families living in those are not the extreme, they are just middle class people who continue to be squeezed out. Ny has the highest outbound migration rate, there is a real reason for that. Think what you want, the people living in ny know the deal. Cant say more without getting political.

Not everybody is going to qualify for every program every time. Yes, it can be costlier for someone with both state and private colleges. Less expensive correlation: Free admission for every 15th guest entering a park Guests 1-14, 16-29, 31-44, etc., don't get in free. No, not the same as Free tuition because that's choice, not chance.