This is pretty wild. Seeing the FBI tackle something like this is so far outside of the legal and cultural norms of society that it's difficult to even really comment on.
I was more surprised at the scope - tackling entrance exam cheats* AND direct bribes to the universities. Neither surprises me much, but glad to see somebody attempting to address both.
* Entrance exams in the US are created by one of several private entities (College Board, International Baccalaureate, ACT) and administered by the local secondary schools.
Well, frankly I'm glad they are. As many people die slipping in the bathtub each year as 9/11. If acronym-agencies want to actually help society maybe they should tackle these types of real-world problems (e.g. tax-evasion of 1%) rather than building cool Snowden spy-toys.
"outside of the legal and cultural norms of society"
True. Usually the norm is that wealthy people are exempt from prosecution. I am sure whoever pursued this will get a lot of angry calls from powerful people.
The rich are getting richer and that demographic usually attends Ivy League schools. As the middle class disintegrates you're going to see more public incentive to prosecute the rich who bend or break the law to sustain their wealth.
It's ok to post stories from sites with paywalls that have workarounds.
In comments, it's ok to ask how to read an article and to help other users do so. But please don't post complaints about paywalls. Those are off topic.
Also, complaining about paywalls assumes that everyone on HN doesn't subscribe to the publication in question. Some of us actually support journalism by paying for news.
The NYT, for example, is running a special right now at $2/week. Considering the number of Times articles that land on the HN front page, it seems like a worthwhile investment.
Before I saw this submission I posted from Chronicle of Higher Ed. But I don't know if it's paywalled or not since I subscribe to that (and to WaPo, fwiw).
That's a way to lose flagging rights on HN. This issue is indeed annoying, but has long been settled on HN: If there's a workaround, it's ok. Users usually post workarounds in the thread. This is in the FAQ at https://news.ycombinator.com/newsfaq.html and there's more explanation here:
This might be more overt than the usual form, but how does this differ from donating a new building, department, or scholarship fund and subsequently getting your kid in?
My mother did well in the Masters program at Stanford and I would have likely gotten in if she donated a couple million dollars but she didn’t and I didn’t (despite getting an invitation a year after accepting enrollment at another university).
It’s not like we ever had that type of money, but if we did I wouldn’t have wanted that.
It seems like they’re targeting this more obvious version of bribery but not digging in and targeting the systemic issue of affluent people buying their children’s spot in college.
I really don’t think it’s much harder to prove that an underperforming student who got in because their parents donated a couple million (or tens of millions of) dollars took the place of a more qualified candidate. Maybe I’m wrong...
It’s different in the scale of the donation. 2 Million dollar donation materially improves things for other students and is tax deductible. $15,000 bribe doesn’t do much for other students except rob them of a spot.
This is so true but greed enables them to take and take and take. I find this so hypocritical, these universities are shaping the future educating the next generation of leaders and already have more than what they need with their exorbitant fees.. it seems like there's no limit to this as long as there is supply, there is demand.
A guy donates an engineering complex, and every engineering student on that campus gets to take advantage of said complex and its resources. Guy donates a new business school building and every student on that campus can take advantage of said building and its resources. In exchange, the university lets in two girls, their daughters or whatever, who might want to major in Art History and French, and coincidentally will likely be inheriting a few hundred million to upwards of a billion dollars in the future. (Future donors.)
It's a fair trade. I'm not wealthy on that level, but if I were calling the shots at a university I'd make that trade every time.
Often they take the classy move and name it after a relative, often a parent. Harvard's Maxwell-Dworkin building got that name because those are the maiden names of Bill Gates's and Steve Ballmer's moms.
It isn't public - none of these universities publicly say, "You can donate 2 million and we'll let your kid in". Which was the amount at Stanford in 2012 (at least based on what someone I met working in admissions told me).
It's left unsaid because it's better for the brand to pretend that this isn't a thing and that just because your parents gave money or because your parents are famous doesn't mean they'll let you in.
if you put a gun to my head and asked me "Rich parents donated 2 million dollars to get their daughter into Harvard, what is her major?" I would say "Arts/Language/Social" every time. If it was a male, i would say "Business/political science" without fail.
If that's a reasonable proposition within the system, maybe the system is broken?
Also, in the interest of truth-in-advertising, shouldn't the institutions that practice this not have to rename themselves from "university" or "college" to "degree supermarket"?
Why can't a poor kid from Oakland, or wherever, watch the classes online and self-study, and pay a nominal fee to exam?
In other words, is the concept of creating barriers to entry, limiting competition, not unreasonable? In any market, economists say that is anticompetitive, and should even be illegal.
Are people paying for education? Or for epaulets?
So let's talk about this "materially improving things for other students" in an honest context of what this is.
They're paying for epaulets. I took graduate courses at a "local" state university before starting a full-time program at a big-name-top-low-number private school. The private school was not a better education, but it was undoubtedly better for my career because of the "epaulets."
>watch the classes online and self-study, and pay a nominal fee to exam?
We are already far past the point on using exam scores as a basis for admissions. Many of the Ivies, famously say every year that they could fill their incoming class with students with perfect scores and perfect GPAs many times over forcing these schools to consider other factors. The US DoE says there are 16.9m undergrads, assuming ~4m are freshmen, the top 1% is 40,000 students. The Harvard freshman class size is 2000 students. At this point its only natural, according to the "market", that people would be paying for slots.
The tax question here is what is the fair value of the benefit received, the waiving of admission requirements or the granting of admission. I would expect that to be pretty hard to put a dollar amount on.
It provides them the opportunity to network with a young, impressionable kid whose parents can afford to throw $15k into a toilet and flush.
If you believe the primary purpose of a university is to educate and certify, that is indeed "not much". But if you believe that the education is secondary, and the actual primary purpose is to cultivate a social network of influential graduates and dropouts, and to act as gatekeeper to future opportunities, then that bribe is better than a perfect SAT score.
That kid will end up with seed money or angel investments from mommy and daddy, and will be able to hire some former classmates right out of the gate, and they might build a unicorn, which will forever be tagged with "founded and built by a team of University X graduates".
In that sense, no one is robbing anybody of a spot. There are genius spots, and rich idiot spots, and the only problem is getting a few from each pile into the same rooms, with a reason to talk about their futures. One way is to coerce the rich kid into studying (or cheating) their coursework by paying off the genius kid. Management training.
This is precisely not the reason there's a distinction. The problem is that the $15,000 bribe went to the pockets of someone who was subverting the process (mainly the coaches), robbing the university.
I think it is a good thing, if done on a small scale (admitting rich people purely based on donations). It's like pairing smart and driven people with people with money and access to connections.
It's different because it's missing plausible deniability for the parties involved. If donations were actually altruistic, they would be anonymous, but sometimes, society needs a veneer of fairness to mask the real nature of the "pay to play" system we have.
> I really don’t think it’s much harder to prove that an underperforming student who got in because their parents donated a couple million (or tens of millions of) dollars took the place of a more qualified candidate.
It's the opposite actually; if you're giving money to the development office then you're enabling more qualified students to attend the school.
That’s why college only costs 50k per year when it costs 150k to provide that service to you.
"Legacy" admits with consideration of donations are allowed as far as I understand. It supposedly has a bigger effect than affirmative action, and at many schools we are just a few generations away from segregation now, which somewhat dictates the race makeup of the legacy pool to this day.
In the highlighted case, the "bribe" actually wasn't - the mother paid a 3rd party fix her daughter's exams (administered by the local school on behalf of CollegeBoard, IB, or ACT).
But, generally, your point is correct. In this case, there was an explicit pay-off/bribe/fraud committed. In the case of the super-wealthy, there's a large donation and a wink-wink/handshake.
How do you determine the parent's motives? I can't deny that parents use donations as a pay-to-play mechanic at colleges, but how do you guard against it? Do you ban kids from enrolling in or applying to colleges in which their parent's (or close relative) has donated to?
My local college was a blessing to me. It provided me an education, a safe atmosphere, and most of all, confidence. It changed me for the better. I'd like to donate to the college if I were in the position to do so, and because I had such a great experience, I'd encourage my child (don't have one, yet) to go.
We can start by not naming things after donors. I don't understand how that's not immediate quid pro quo right there, you get advertising for your personal brand.
how do you guard against it? Do you ban kids from
enrolling in or applying to colleges in which
their parent's (or close relative) has donated to?
Blind admissions, where the admissions committee isn't told a name or enough details to identify an individual.
Obviously, people's opinion on that will depend on their opinion on things like admissions essays and extracurricular activities; anything like "I learned a good work ethic helping my father with his senate campaign" will have to go.
Blind grading after admission would be sensible too, for the same reasons. Although perhaps difficult in subjects where individual students' work was identifiable even without their name.
Donating a building is a payment to the university. The university then gets to decide to admit your child in return. It may not be meritocratic, but it's not corrupt (except perhaps insofar as by pretending the exchange is a donation, the university and donor manage to cheat the taxman). The donor is simply paying the university to provide a service that they have every right to offer for money. It also benefits other students, which is why the universities take the deals in the first place.
In this case, we're talking about bribery of specific employees to act against the interests of their employer. That's simply corruption.
They might be equally non-meritocratic, but they're definitely not equally dishonest or equally socially harmful.
One of the reasons people want to go to these schools is because they have lots of resources. If you ban wealthy parents and alumni from donating, the school wont be outstanding, so the University has good reason to accept these.
Plus it may not be against the interest of the other students to get a chance to network with rich kids (and the related future business/investment opportunities).
The purpose of a research institution is to do research, not provide degrees to some selection of particularly smart young people. They will act in ways to increase the research they can do. People don’t deserve to be let in just because they are clever, they also should have some probability of furthering the research aims through their studying/paying fees. Why is it more unfair to let in someone who can pay for a great deal of research to be done than to reduce student numbers to pay for research to be done?
Your first two statements I agree with but they don't really apply to this article which is about undergraduates.
Undergrads are pretty much irrelevant to major research institutions (e.g. my undergraduate alma mater MIT spends only about 16% of its budget on undergrads who are actually subsidized -- tuition is about 14% of revenue). Grad students are what matter and apart from the B school they are mostly paid (barely) to attend.
Research students are paid to intend. professional students (business, law, government, medical, dental, etc) are not. And some scientific/art students are not research students (often these are students who enter as Masters candidates, not PhD candidates)
I wonder if you can help me understand this better. Why does a specific private university need let in the smartest or most capable students? What does that have to be their goal or they are unjust? Why can't they have different reasons and goals when building their student body? I understand things like racism and other forms of bigotry. But what's wrong with adding some students that will bring in the perspective of the super wealthy? Not to mention the significant additional funds it will provide for everyone else?
It feels like having a purely merit based population of students would create a very stagnant and dull environment.
Well, they don't - but then they'll eventually get the reputation of being a party school rather than the prestige that goes with outstanding academics.
It feels like having a purely merit based population of students would create a very stagnant and dull environment.
'This university sucks! Everyone here is a nerd.'
OK, you probably did not mean it that way but I can't resist having a little fun with this. If all you want to do is shake things up, why not just draft random working class people via lottery? For extra amusement, make them go even if they don't want to. True, we would not learn anything about the perspective of the super wealthy, but they already have billboards and TV stations to inform us of their opinions.
Legality aside, "corruption" implies fraud. Fraud implies personal gain by dishonest means. The allocation of spots at a private university to the children of wealthy donors would only be corruption if it were dishonest, but it's not.
Why is this any more corrupt than any other exchange of services for money?
Yes, there's a system available to the masses that the super-rich are bypassing using their wealth. The same is true of anyone who flies by private jet, or anyone with private health insurance in a country where the vast majority of the population uses the public health system. Are these things "corrupt"? What's different here?
If there's no dishonesty and nobody is harmed, what's the moral issue? Why are universities, unique among all society's institutions, required to operate as perfect meritocracies?
>> The same is true of anyone who flies by private jet, or anyone with private health insurance in a country where the vast majority of the population uses the public health system. Are these things "corrupt"?
Short answer: The difference lies in the transfer of wealth to the next generation and our meritocratic values.
As a society, we have a value system that we implicitly adhere to. At least in the US, meritocracy is big part of our value system.
We believe that if you work just as hard and contribute just as much as your neighbor, you deserve to enjoy the same quality of life.
So, let's look at some examples:
Example A) Person A works his/her ass off and becomes rich off the fruits of his labor. He then spends his riches on private jets and private health insurance.
Does this conflict with our meritocratic values? No. He deserves a higher quality of life because he worked his ass off.
Example B) Person A then purchases access to an elite university for his child, who as a direct result, enjoys a better life than his poorer peer who works just as hard.
Does this conflict with our meritocratic values? Yes. His child didn't deserve their higher quality of life because they didn't work their ass for it.
You don't have to agree with meritocratic values, but it explains the difference.
I'm happy to concede that it's a violation of the ideal of meritocracy, and already did. But so, for that matter, is buying your child a private jet or buying your child health insurance that others can't afford. It's the fact that money is being spent by a parent on a child who hasn't earned it that makes it unmeritocratic. The case of this being done for a university place is still not special, and it's still not corrupt.
Yes? Paying someone to go against the best interests of their employer is different than paying the employer directly. Paying a grocery store cashier separately to put aside the best fruits for you is not the same as paying the store extra for a higher grade of fruit.
Paying the store an unknown extra amount, calling it a donation, getting your name on a building (i.e. advertising your brand) and getting a tax deduction for it isn't the same as paying the store extra in the amount of a publicly listed price available to all for a higher grade fruit.
I didn't say it was a publicly listed price. You could have a deal set up with the store's owner, that's fine. Having an individual deal with a cashier that results in the rest of the customers having a slightly lowered experience to the benefit of one person and it not going to the owner is the problem. If the owner is fine with the quality for the general public going down and what that does to his business, that's fine and the owners's call to make as to whether it's beneficial overall. If an employee is taking all the benefit and giving the negative consequences to the business, that's a problem.
There are portions of what schools are doing here which are perfectly normal. There are portions which may not be (I imagine public funding may preclude certain admittance options, but I'm not sure). If the school is willing to put up with now the public perceives these actions and how it affects their business (because it is a business), then that's their decision.
I mentioned the non-public price information to indicate that it's to lend a helping hand for those also wishing to commit tax fraud and deducting the "donations". If there was a public price, then they would lose that.
My intent was to demonstrate that whatever is going on is hush hush for a reason, and not comparable to a legitimate transaction where a private business owner chooses to sell a product or service to someone at whatever price the two agree upon.
Whether you think it's tax fraud probably depends on what purpose you think being able to deduct donations to non-profits serves.
I would say that every donation carries with it the possibility of some benefit to the donator, no matter who does it. There's always the public relations or social benefit or being seen as "doing a good thing". Without this benefit, some amount charity might go away. Does it matter that people or organizations give because they see benefit to themselves in it? I think not, and I think the tax law is set up specifically to turn a blind eye to this. In that respect, it's not fraud at all, it's how the system is designed to work to promote charitable giving.
Also, since to my understanding most of this "advertising" for donations which results in naming a building is to individuals, it also depends on how you classify advertising. Is establishing a legacy for yourself so you're looked on favorably after you're dead advertising? We generally don't call it as such, but even it is, so what? Does is promote more good or harm to society in general? That's the only metric we should measure it by.
That’s why I’m against any preferential tax treatment, to prevent theft from everyone in the nation via this impossible to prosecute white collar crime.
You think donating tens of millions of dollars for an individual to get their name on a building is theft from everyone in the nation?
What if it's a hospital or clinic in an area? Are those people being stolen from or left worse off for it being possible in their area because someone gets their name there?
I can't help but feel you're being both far too pedantic in wanting to prosecute a crime that doesn't seem to actually hurt anyone (and actually benefits large groups and communities), and also completely misidentifying it as a crime when it's allowed by tax law.
I mean, at least part of the purpose of the law is to encourage people to give their wealth for the good of society by encouraging additional benefits (write-offs) in addition to the benefits that have always existed (recognition), so all I see here is a system functioning as designed, for the good of all. I'm not sure how you're seeing some great miscarriage of justice here.
That's the beauty of this type of white collar crime, it allows for so much plausible deniability and difficulty in identifying who is hurt and who benefits.
The simplest argument, however, is that the purpose of taxes is to provide the services that a society wants, theoretically indicated by the way it votes. The services and products that the taxes buy should benefit everyone in the nation. If the country has a budget of $x and needs to levy a tax of $y (obviously must be calibrated to ability of one to pay), then why are we allowing adjustments to this?
Why open up the door to abuse? If you want to donate, then donate, what difference does that make to the money needed for government expenditures? The fact that we would even need a donation to a hospital is indicative of a broken system.
The end result of the tax deduction is that we have abuses, and we now have to spend more resources to police the abuses. And the only way to stop the abuses is to close the loophole that allows it.
All of the complexity of the tax laws simply enable more and more corruption. We should be aiming for transparency and simplicity, and instead we end up playing this "steal or be stolen from" game where you try to suck more out of it (but don't make it obvious) than you put in. How does donating millions to Harvard or an art museum benefit society? And even if it did, why would we want to give up our democracy's power to democratically spend the tax receipts the way we want, and instead give that power to a single person to spend however they want?
> it allows for so much plausible deniability and difficulty in identifying who is hurt and who benefits.
The reason you're having trouble identifying who is hurt in this case is because very, very few are, but the people who benefit are generally a large group.
In the worst case of the story in question, if someone donated a large amount to a school and their child was given preferential treatment, the loser is possibly a child whose spot is taken, but the beneficiaries are all the other students of the school, and possibly an additional amount of future (or current) students that would not have been able to attend, if those funds are used to allow more applicants.
> The simplest argument, however, is that the purpose of taxes is to provide the services that a society wants
This is a tax program used to incentivize trade of non-traditional goods, and trade generally benefits all involved. What we have are people that are not benefiting society in a way they could (people saving money that's not being put to use in the economy, but specifically more so than needed to safeguard their safety or way of life), and a program to incentivize them to use it in exchange for goods they desire (recognition, genuine altruism) but might need a push to pursue. That push is the government subsidization of the transaction to some degree.
As subsidies go, encouraging wealthy individuals to give money to causes that have to prove they aren't doing it for profit is probably my favorite. Sure, it can be abused by unscrupulous individuals or organizations on both ends, but I'm confident the social good achieved (over people just hoarding wealth longer) far outweighs the negatives.
> All of the complexity of the tax laws simply enable more and more corruption.
Non-profit deductions are simple. You'll have to do much more to convince me that a few anecdotal misuses outweigh what I see as one of the major causes of redistribution of wealth from the wealthy to the less wealthy over many decades.
The pragmatic approach is to attempt to measure who is hurt and by how much, and who is helped and by how much, before making an ultimate decision on whether this is good or bad. I doubt keying off anecdotal media stories about misuse of a tax law will yield better results than that.
The comparison of massive and powerful organizations to ma and pa grocery stores is really tiresome. Stanford university has a hell of a lot more power than your grocery store and occupies a privileged position in society. They should have proportionally more responsibility to society than your grocery store.
Placements at the university aren't the property of the individual being paid, so it's illegal in the same way that embezzling funds or stealing trade secrets would be.
It's not "bribing" the school, because what's being paid for is something that the school has the right to give. This comment makes about as much sense to me as saying:
> So, to recap, paying someone to steal my car is bad, but paying me to give you my car is fine. Got it.
>> It may not be meritocratic, but it's not corrupt
Maybe not in the 1800s, but doing that today violates any number of published school policies. It likely also violates several laws, especially if the school receives state/federal funding (they all do). Violating published policies, circumventing established admission systems, and denying a spot for a qualified candidate in order to accommodate a wealthy donor, that is the definition of corruption.
A few, most famously Hillsdale, refuse government money in order to protect their civil liberties (including as race-agnostic admission procedures, for better or for worse).
I suppose the IRS doesn't prosecute some of the tax fraud, because it might be difficult to prove a quid pro quo or the value of an admission.
Sometimes, alumni give to their alma mater for charitable reasons! And some USC grads do better than some Yale grads, I'm sure.
But maybe the IRS should try to brush back the most conspicuous cases of donating to receive admission. I'm seeing stories of admissions officers being pretty open about it at Ivy League schools.
If the donor pays for a service why does it "donates" instead to pay?
This smells very much like donating to a political party just to get government contracts which I believe is bribery.
I don't like it but U.S. courts do not consider party donations, or even more direct benefits, to get contracts bribery unless there's explicit evidence; B following A does not mean A caused B unless the people involved say so, even if there's a clear pattern.
I think it's a corollary of their misguided "money is speech" interpretation of the 1st amendment. A university admissions bribery case is unlikely to benefit from such 1st amendment arguments.
(Kudos to patch.com for actually including a link to the charges in their coverage. Middle finger to the Washington Post.)
Charges are divided into three groups, which appear to correspond to different roles in the bribery. At the top are four people "charged by information". William Singer and Mark Riddell are charged with conspiracy to commit money laundering. (And some other charges.) Based on the media coverage, this is because some payments in the bribery system took the form of donations to a nonprofit operated by Riddell, and this is tax fraud. (One of those other charges is "conspiracy to defraud the United States".) Rudy Meredith is charged with wire fraud, the catchall crime that everyone in the country is guilty of. John Vandemoer is charged with racketeering.
The second group, "charged by indictment", are all charged with racketeering, except for David Sidoo who is charged with mail and wire fraud. I don't know what these people are supposed to have done. I'd like to think that a racketeering charge requires the organization you're involved with to have committed a crime; that would imply that what they're really charged with is helping the sham charity commit tax fraud.
The third group, "charged by complaint", are the parents. One and all they are charged with conspiracy to commit mail fraud.
It doesn't look to me like paying an admissions officer to admit your child is a crime at all. Similarly, bribing a maitre'd to seat you more quickly is bribing a specific employee to act against the interests of his employer, but it's not a crime. Taking the bribe might or might not be a crime. All of the charges here that involve a crime relate to using a sham nonprofit for tax benefits.
> It doesn't look to me like paying an admissions officer to admit your child is a crime at all.
I have not had a chance yet to look properly at the case, but I'd assumed the "fraud" charges are for precisely the act of paying an admissions officer to admit a child. Do you have reason to think that's not the case?
> bribing a maitre'd to seat you more quickly is bribing a specific employee to act against the interests of his employer, but it's not a crime
It's petty enough you wouldn't expect anyone to be prosecuted over it, but are you sure it's not a crime?
>> bribing a maitre'd to seat you more quickly is bribing a specific employee to act against the interests of his employer, but it's not a crime
> It's petty enough you wouldn't expect anyone to be prosecuted over it, but are you sure it's not a crime?
It looks like the legal status of commercial bribery (no involvement of a public official) in the United States, while often illegal, is not always clear-cut: https://en.wikipedia.org/wiki/Commercial_bribery
When the mails are used in the course, the federal offenses that appear to be involved from the charges in this case are “mail fraud” and “honest services mail fraud”; the bribing of the officials would probably also be criminal frauds (against the university) under State law.
> It doesn't look to me like paying an admissions officer to admit your child is a crime at all.
Then why are people being charged with (or pleading guilty to) criminal fraud (or patterns of racketeering activity where the concrete racketeering activity includes criminal frauds) for doing that, conspiring to do it, or facilitating other people doing it? Yes, the federal government doesn't have jurisdiction over mere fraud, so it's the use of the mail that is key to the federal charges on this case, but the basis of the charges here (other than the money laundering and tax fraud related to concealing the quantity and source of the profits from the main scheme) are all about bribing school and test administrators.
Anecdata: In my extended family, we have some members with a fair bit of 'bread'. These family members met at a somewhat known (yet small-ish) college and really loved the place and all the memories they had there. They donated a lot of money over the years and, yes, had a building named after them. When it came time for their daughter to apply to college, the choice was obvious.
However, the daughter was rejected outright due to a multitude of factors. She wasn't violent, or addicted, or lazy. Nothing like that. She just wasn't ahead of the other applicants.
Well, you can imagine that the parents were none too enthused. All the love they had for that college, those dreams for their daughter, gone. There were phone calls and in person visits. Still, the daughter was not what they were looking for.
In the end, things have gone alright for everyone. The building still has their names on it, though the donations have ceased. The daughter is doing just fine at the school she is now at. The college is dealing with it's own issues just as it ever was.
Though there may be corruption at many universities and colleges, there are still a fair number of places where merit and fair decisions still reign. I'd look to those schools for the graduates to hire. Integrity is still in high demand, just as it will ever be.
When I hear stuff like this I wonder what in the hell could have been so great about their experience that they'd want to do something like that. It makes me wonder what I missed out on in college that I don't feel the same way. Did I just by chance happen to not go to some meeting or join some club that would have changed everything?
It really is if you gained access to a circle of people who have moved up in influence in varying sectors.
My Alma-mater gave me access to leaders, hiring and referral opportunities, and even a life long partner with similar ambitions. I can probably name a good long list of of people I can call and get a a little help from now if I was in a bit of a pinch or need a little perspective.
Same-ish. My Alma was a great place for me at that time. I grew up a LOT and have very fond memories, specifically of my department. Via the push from professors, I learned so much and I am very grateful for that. I used to donate to just the department, but with a change in leadership, that is no longer possible. That time, that place, and that person who I was, will always be special to me.
This is bizarrely instrumental reason. Few of my classmates are now captains of industry or even in my career field, but I have extremely fond memories of my college experience because it was a nurturing, supportive environment where I had a close-knit community of friends, access to a lot of different resources to pursue my interests and the freedom to experiment and explore how I wanted to live life, all relatively free of stress and serious obligations.
Granted, I went to a smallish regional state school. The experience there, or at, say, Small Liberal Arts College, may be very different from Big State Engineering or Pressure Cooker Elite U.
I see you got some downvotes, but no really this is true. Diversity is a frequent selling point, and you get a chance to meet people from around the world at university. Clubs, sports, frats, job networking, are all socially driven. Some people need the social feedback to drive their studies; we're social animals so there's really no shame in that.
Sometimes though, we need instruments to do science, so that's another major purpose for undergrad work. Occasionally. But if the undergrads decided to all take online courses one day, it would sure help the grad get work done.
> Did I just by chance happen to not go to some meeting or join some club that would have changed everything?
Probably? Personally my first semester at uni was depressingly dull other than the novelty and the subjects (well, mostly dull there too but the future semesters looked interesting and I was programming for the first time). By chance I was walking through a club recruitment event when a single person stopped to talk to me and tried to convince me to join and come to a meeting that night. They got my email too. Well, I didn't go to the meeting but a few days later an email showed up saying the first practice will be tomorrow. I figured why not, I'm not doing anything, and showed up. I stuck with it for four years, taking on duties over time until I was president, it was most of my social life (e.g parties, hanging out) and I made most of my friends through it, shifted my lifestyle from videogames and procrastination to working out, having fun with sport and mastering it, having flow/mushin consistently, and getting work done ASAP, and other considerations.
I've never felt the desire to donate to my old college, but certainly I already have donated to my old club and have considered doing more for it. I assume folks with very good experiences were part of some sort of organization: my high school friends that stuck together in college without branching out had a good time but was overall meh.
I never quite understood why people donate to colleges in such a way that it is the legal entity of the university that benefits.
They provide a service, and they charge money for it. The university operates as a business. I don't donate to Wal-Mart, so why would I donate to University X?
Why wouldn't you instead endow a scholarship for students of your favorite college? Instead of giving cash to Wal-Mart, buy prepaid Wal-Mart gift cards, and pass them out to fellow customers. The university doesn't need your donations. It is fully capable of building its own buildings outright, begging for state funding, or at least issuing bonds backed by future tuition. If someone is so keen on having a building with their name on it, perhaps they should instead construct some off-campus student apartments, and make some nice signs in the same general style as the university signage.
Most universities primary function is research, and tuition doesn't pay for research. Most funds from research (should) come from grants and donations. The research into a cancer cure doesn't come from Jimmy Undergrad paying tuition.
Per my anecdata, it wasn't a research university, just a liberal arts college. From what I can remember, most of the donated funds that my extended family gave went to scholarships, though I'm not 100% on that.
At the more desirable schools, tuition fees don't pay for tuition costs either. There's a correlation between how much the college (and its donors) give to a student and the quality of the college, for reasons that are obvious upon reflection: it aligns incentives.
If the school is paying for your attendance, their motive is for you to succeed at something (or else why would they bother schooling you)? If the school is profiting from your enrollment, their motivation is for you to enroll, not suceed.
Actually, in the US, at the vast majority of universities, the primary job of faculty involves teaching, extension/outreach, and forms of service like mentoring students. Most universities have research expectations, but that is not how faculty spend their time.
> and tuition doesn't pay for research.
This is a STEM-oriented view. In a lot of fields the primary cost of research is faculty time, and it is often paid by tuition.
>This is a STEM-oriented view. In a lot of fields the primary cost of research is faculty time, and it is often paid by tuition.
While I don't doubt there are colleges out there that primarily function of tuition, I'm fairly confident that the schools that the GP was talking about which take in millions of donations, are not funded by tuition - STEM or not. Endowments are practically tax-free hedgefunds. There are several liberal arts colleges in boston with billion+ endowments - where the return alone on the endowment rivals the total revenue from students (assuming they were all paying the full 50k, which they likely aren't).
Because almost all universitys are NOT businesses... they are non-profits. They don't provide their services so they can make money, they make money so they can provide their services.
Now, you can argue that incentives sometimes get messed up, but that is the case for ALL charities/non-profits.
Non-profits are businesses--businesses with a privileged tax status.
It is possible to set up a non-profit business such that the money that comes in goes out through different ports than the ownership outflow pipe. A typical setup for a corrupt non-profit is for managers of the business to earn above-market salaries, and to own for-profit businesses that "compete" for service contracts with the non-profit entity.
For example, Jack Grift establishes a non-profit charity for orphan children with fantods. He works the circuit and manages to fund it to the tune of $1M per year. He leases a nice office space in a building owned by Jack Grift AAA Office Space, and contracts with Jack Grift Janitorial Services to empty the trash can, and sets the charity's salary for CEO at $250k/year, and Chief Revenue Officer at $100k/year, plus a bonus of 5% of incoming donations. Jack, of course, holds both positions. He gets $250k as CEO, $150k as CRO, $100k as his own landlord, and $50k for taking out his own trash. He rolls $440k into uncapturable overhead, marketing, and fundraising efforts, and still has $10k left to supply orphans with copies of both Huck Finn and Tom Sawyer.
The finances of universities are even more obfuscated, but it is undeniable that some university employees have the power to spend the organization's money for their own personal benefit. Catered faculty luncheons. Campus beautification in and around personal offices. Settlements from the university to forestall civil suits based on personal indiscretions. Premium parking spaces. These expenditures may, in fact, be justified by the mission of the university, but it is impossible for me to audit any given university's accounting books to make that determination for myself before deciding whether I want to give them more money than they demand on their invoices.
There are a lot of outflow pipes for business revenues. Non-profits only close one of them.
> Why wouldn't you instead endow a scholarship for students of your favorite college?
Because endowing a scholarship is setting up a charity and donating to a University (the kind anyone donates to, at any rate—no one is endowing chairs at the University of Phoenix) is giving to an existing charity; the two probably have similar tax, feeling of giving back, and status/ego benefits, but the former is more work.
The charity you set up will be perfectly aligned with your interests and values, whereas the highest paid employees of the existing "charity" are probably the president and the men's football coach, and not necessarily in that order.
As charities, universities massage their financials to make themselves look better. They set the tuition rate. They determine the scholarship amounts. They bring in dollar-denominated donations, but the actual "charity" they provide is a nebulous value for the amount of additional knowledge and education the student would have been otherwise unable to acquire without paying more out of their own pocket in tuition. The university decides what that is worth anyway. They move $50k from one pocket to another, and then say they gave away $50k worth of education.
A private scholarship charity can't play those games, because the costs of education are set by someone else.
> The charity you set up will be perfectly aligned with your interests and values
If you are perfect at setting up and managing a charity, perhaps, but then if you are concerned with education, and what something perfectly aligned with your values, may mean you need to set up a university, not a scholarship fund.
> whereas the highest paid employees of the existing "charity" are probably the president and the men's football coach
You assume that this conflicts with, rather than reflects, the interests and values of the kind of people who donate money to the universities. I think that if you explored the issue you would find that it is not the case, and particularly that the variation in whether or not that is true at any particular university correlates very neatly with the values of the people who donate to the university. (As far as causal explanations, I would assume that there is a two-way feedback loop; donors who value football will make a school more likely to pay the football coach well which will attract more donations from people who value football and less from those who do not, etc.)
> A private scholarship charity can't play those games
Yes, but that's just another way of saying that a private scholarship charity has a lot less control of what actually gets delivered as education than a university.
Not sure that's a reason to support the former over the latter, though, especially when the choice is taking the additional effort and cost to set up the former; its just another way of saying "less bang for the buck".
> Why wouldn't you instead endow a scholarship for students of your favorite college?
Many people do. They also give money to improve football facilities, bring speakers to campus, and endow a chaired professor position.
> I don't donate to Wal-Mart, so why would I donate to University X?
Because a university is a nonprofit that exists only for the purpose of improving the world. (Not necessarily the employees, who work there as a job, but it's why universities exist.)
You probably don't see a lot of donations to the University of Phoenix or other for-profit universities.
>Because a university is a nonprofit that exists only for the purpose of improving the world. (Not necessarily the employees, who work there as a job, but it's why universities exist.)
For something like fifteen years of my life I owed well over a hundred thousand dollars of non-bankruptable debt because of the fees this "non-profit" charged.
A "non-profit" university exists for many, many reasons. Giving the dean a million dollar salary is one of those reasons. Student education is likely third or fourth on the list.
Correct.
Despite this, I choose to donate to my universities because a) when its my children's turn, I want the organization to remember my name, and b) I honestly believe that education is a truly worthwhile pursuit and I want to expand access to, and quality of, education and discovery.
PhDs and grad students may be a bunch of blowhards but they drive a lot of innovation.
> when its my children's turn, I want the organization to remember my name
When it's time for my children, I want the organization that will be teaching them about professional and ethical conduct in the real world to not only not be corrupt, but also demonstrably free of all prejudicial biases in the applications process.
Which is to say, I want my children to be assigned a randomized identifier and their personally identifiable information anonymized, before their application is given to an admissions officer, so that irrelevant qualifications like the amount of money parent alumni have given to the organization are not and cannot be used for an admit/no-admit decision.
I'm fine with your kid getting a 2nd-floor room in the posh dormitory, and first bite at class scheduling. You can pay for additional conveniences, but not to deny someone else an opportunity earned by their own hard work.
Well, okay, so I should stop donating to the scholarship fund then? If alumni stopped donating then quality of education or number of students would have to go down.
If my kids aren't going to get preferential status then there is no reason to be a sponsor of that institution over any other.
Given that your top comment is, "I don't understand why people donate to Universities," I'm not sure that you're in a great position to say that others shouldn't receive priority admission. If everyone did what you did then our University system would collapse.
> "Non-profit" is literally no more than a corporate tax status
It is a tax status (actually, a group of them), but the name has substantive meaning, since to qualify for any of them there must be no one with a claim on the entity’s accumulated earnings.
> That actual charitable causes happen to be non-profit is a coincidence.
It's not a coincidence, it's an actual legal defining characteristic of the kind of nonprofit to which donations are tax deductible.
A non-profit has to show their outflows but it is quite common to have a non-profit where 100% of the money is doled out as taxable income to the board members.
It's small and in the mid-west, you may have heard of it, but it's also possible you may not have. The point, for the family, was not in 'cred' but because they loved the place.
I think you're making a valid argument that misses the larger point.
I agree that the practice of university donations in exchange for college admission is neither legally corrupt nor dishonest.
However, it is still wrong according to our societal values.
That is, we have a value system that we implicitly adhere to and meritocracy is big part of our value system.
At least in the states, we believe that if you work just as hard and contribute just as much as your neighbor, you deserve to enjoy the same quality of life.
When parents purchase access to an elite university for their child, they are conferring an advantage to their child over the child's peers that is unearned and unfair.
Elite college admissions is a zero sum game. There are only a certain number of spots available and purchasing a spot for a kid who slacked off in school necessarily takes the same opportunity away from a more deserving kid.
These universities publicly portray their admissions process as meritocratic. They go out of their way to dispel the notion that buying your way in is officially an option. That it IS an option, in spite of their assurances, is corruption in my book, regardless of whether or not it's an open secret.
>>Donating a building is a payment to the university.
>>It may not be meritocratic, but it's not corrupt
Its just dampening the effects a little, but its the same though. Donating X, just means the person who bought in the donation gets promoted or gets awarded some bonus or gets rewards by their employer(university). Instead of receiving the bribe directly.
This is a classic trick from corruption handbooks used by ace corrupt people.
When you trade something for something which could be wrong, only stupid people directly do it through exchange of money. Clever people trade through favors and indirect profit/help. They also call this lobbying in places like politics. In many other places they call these things incentives, commissions, brokerage or whatever.
This is really one of those classic problems with defining corruption. Books and stories can always be cooked in a way to make anything look good.
Universities can admit who they want to admit based on any criteria they want, including large donations. This news story is about rich people going behind the university's back to get people admitted via exam cheating and employee bribery.
Technically, the same thing, but one side goes to jail because they can't donate millions. One is legal because of wink and a nod, the other is illegal (as it should be) but both sides tried to do their best for their children.
Jared Kushner, the brilliant philosopher went to Harvard at the same his father donated $2 Million to the university.
https://www.theguardian.com/commentisfree/2018/oct/21/what-w...
I understand the legality and the law is the law, but let's cut the c*ap, both sides are cheating. The poorer side gets caught because they don't have the money needed to bribe the University, they have just enough to bribe its employees.
I'm not familiar with tax deductible donation related law, but in that case, universities need to make sure they aren't breaking the law. Is that what's happening?
As far as I can tell, saying "get really good test scores or pay us a million dollars to get in" is not illegal.
No university says "get really good test scores or pay us a million dollars to get in". Universities get to keep their pretense of having objective admissions and that you can't buy your way in, and the donor gets admissions, personal advertising, and a tax deduction.
There's a reason no university simple states a price on their admissions page
They’re accused of, e.g., paying insiders at the SAT and ACT to change scores and engage in other such dishonesty, against the wishes of those organizations and the universities. This is fraud.
This is very different from buying entrance to a university. Universities are allowed to admit on any criteria that they want (with a few exceptions). They are private organizations.
Some of the examples were egregious, bribing Athletic Coaches to create fake profiles for the kids who weren't even athletes or paying people to take the SAT for their kids. Quite different than donating $100M for Admission.
Donating so that you get something in exchange is fraudulent, and is different, but I don't see how it's any better. It's also possibly tax fraud, therefore theft from other members of society.
Colleges can admit whoever they want for whatever reason they want, there's nothing fraudulent about that. Unfair? Obviously but certainly not fraudulent. The examples I gave however are illegal and obviously different than donations for admission.
So, I've seen admissions described by three doors:
Front Door: Student performance (scholastic and academic)
Back Door: Family donations
Side Door: What this article is about. Part of the ruse was faking athletic credentials to get into a more likely of admissions candidates (athletes have an advantage, apparently).
When you "donate" a building, the school gets to use it. It blurs the line between legitimate and fraud because there's obvious benefits that transcend the arrangement of a wealthy sprog.
When you "donate" $1.2m to a "consultancy" you're just committing fraud. Nobody benefits except your kid and the "consultancy." It's much easier to prove that this transaction is fraudulent.
So in this case the government is going after fraudsters because the government isn't getting paid, and neither is the school. I'd be willing to bet that the government would have continued looking the other way if a) the wealthy had paid taxes on their bribe or b) there was some indisputable asset one could point to and say "there's my donation!"
No, you're right. But the ultra rich have "loopholes" since donating a building or a stadium to a college is not against the law, and a backroom handshake deal can still be made to donate millions without it going on the record as an exchange for all your kids getting accepted into that school.
Same difference in that sitting presidents don't ask for and don't get paid $millions for giving speeches during office - - yet the record shows that almost ALL of them arranged deals during their presidency in exchange for favorable legislation, so that the minute they walked out of the white house they were jetting off to give these million dollar "payback" speeches.
It differs insofar as when you do it 'above board' more people get a piece of the pie, the pie tends to be larger, and there are more events where the consumption of pie is celebrated. One can argue that the benefit accrues to the university rather than the corrupt individuals, but from the point of view of excluded applicants that difference is moot except insofar as a donation expands the number of admissions or academic resources.
Well yes, because donating a building benefits all the students using that building today and well into the future. Small payments (i.e. bribes) to individuals benefit no one except those individuals.
The parents are facing serious federal charges there. Conspiracy to commit mail fraud is what, up to 5yrs prison and a $250k fine? I feel for them - it's the type of crime I can easily imagine myself committing* - but good that this has been put to a stop.
*while also believing that, given the opportunity, I would choose to play it fair.
Oww. Lots of plea bargains coming up I am sure. Don't think any of the parents would make a particular sympathetic defendant in front of a jury.
Matt Levine today framed it rather neatly as a property crime, in that the dodgy charity guy and the coaches stole those selective admissions slots from the universities and sold them on to the parents. (Those parents of course being fully aware that other people would be taking test on their kids' behalf, so they are hardly victims.)
Are you saying that's a high number or a low number? Because if you're saying it's high, you picked the wrong examples, here's a different example from the article:
>The student’s parents paid $1.2 million in bribes, officials said.
It sounds like part of the problem was that only some individuals were involved out of the institution. So it was a case of some coach being paid off to transmit false info to the admissions committee about someone being on a sports team (making it federal wire fraud). The admissions committee was then influenced to accept based on that fake info.
Apparently there are no more drug cartels to go after? We’re now worried about a has-been actress who paid $15,000 so her kid could cheat on the SAT?
I’m skeptical of the FBI’s investigative priorities. Wall Street is suddenly squeaky-clean? No more insider trading? Ponzi schemes have all gone away? Municipal governments across the land are staffed by honest and dedicated civil servants? All defense contractors are scrupulously precise about their billing and would never ever bribe a DOD procurement official?
I’m not saying it’s right to engage in cheating on the SAT or bribing someone to get into a university. But inarguably there are many more crimes that are far more serious.
> Apparently there are no more drug cartels to go after? We’re now worried about a has-been actress who paid $15,000 so her kid could cheat on the SAT?
I think this is fantastic. I'd prefer law enforcement crack down on serious crimes of wide scope, as a punishment, as well as a deterrent for others who might wish to do the same.
If all they did was go after the most heinous crimes, it would be immediately obvious that you can 'get away with' everything else.
"Investigators allege the scheme was run largely through Key Worldwide Foundation, which ostensibly was a nonprofit but, according to the FBI, was really a conduit for bribing college employees to get rich kids into elite schools."
Well, it's not like there's truth in advertising:
"We partner with your son or daughter to identify their strengths, unlock their potential, choose the right college, position themselves for admission, and outline a course of study and extracurricular experiences to lead to a life of success." -- http://www.thekeyworldwide.com/
Why is this illegal while underfunding the schools and paying $35K to a "college counselor" not equally corrupt? Because the results of the latter are less certain?
Because one is outright fraud while the other is just better training, tutoring, and guidance? If the college counselor was doing the same thing as alleged here than that would also be illegal.
I meant underfunding high schools so the candidate pool of kids are not well prepared.
For example California's public school system is one of the worst schools in the nation; even top schools like Palo Alto are pretty appalling compared to what I got on the east coast. And Palo Alto's schools get all sorts of "private" donations from PA residents, not shared with other schools. But almost all the high school and middle school students also receive private tutoring after school to make up for the crummy public education.
So, I want to see some data on these kids. This could be some great research, what are these kids doing now? How do they stack up against their graduating class, with career etc. Could you find some correlations, hard to see if everything was a product of their parents cash, but I would be interested in seeing some of this Data
You can find correlations with enough tests and enough variables. You may have to join in outside data but finding correlations alone is not tough. It'd be actually getting data on these people into analyzable form...that'd be a huge task that would ruffle many feathers.
It only started 2011 at the earliest, and seems like the bulk of it was 2015-2017, so you won't have much data yet; most of those kids are still in college. You could look at the GPA I suppose. It's also an interesting ethical question; what do the universities do with the kids? Were any of them unaware of the scheme? I read that the test-taker would take the test "with" the kid... so presumably they do some kind of paper mixup at the end. It's conceivable that the kid might not even realize their parents have paid somebody to take their test at the same time as them.
There's so much discussion from the perspective of the parents, but what about the message this sends to the kids that it's OK to cheat your way through life?
If you could get into USC with a ~1000 SAT score like Huffman's daughter, would you even want to go? I wouldn't. It is shortchanging the achievement, and really missing the point of what admission to such a university represents.
The reality is that the college you attend, especially for undergrad, has relatively little bearing on your life as a whole. If you're in the GPA/SAT range to get into Stanford, but end up attending UC Irvine instead, you'll be just fine. You might even graduate with less debt and at the top of your class. On the other hand, if your parents bail you out and buy your way into Stanford when you're not qualified, it sets you up for a life of disappointment. You'll likely struggle to keep up with classmates, and won't know what it feels like to achieve on your own. It teaches reliance on mommy and daddy rather than reliance on yourself, which is not a sustainable approach to life when you get into the real world.
> The reality is that the college you attend, especially for undergrad, has relatively little bearing on your life as a whole.
In most cases yes. But when we're talking about elite colleges, it has significant bearing. Living in the dorm with a future CEO may be helpful in your future job search, and if you go to an elite college, you have a much better chance of having done that.
Going to Stanford or Berkeley or MIT or UW and doing CS there will mean that when you graduate, a whole lot of hiring managers will see that you attended the same college they did and give you an automatic boost.
And if you go to USC film school, you're pretty much guaranteed to know someone who will one day be very successful in the film industry and will help you get jobs or connections to have your own projects produced. Heck, the school does that for you.
So yeah, in most cases it doesn't matter, but in some very specific cases it does.
My point is not that going to a top college isn't a great opportunity. My point is that for someone who could have gotten into Stanford, the actual admission it isn't defining. Someone with that sort of intelligence and drive will find a way to meet the future CEO, get a great job and so on regardless of whether they attend.
I went to Stanford. I love my undergrad. But I also have faced plenty of rejection and adversity on the way and since graduating. What matters is how you respond to that rejection, which is what the struggle to earn admission reflects. Having your parents bail you out means you will never learn those lessons.
You really believe that a person with the same intelligence and drive who goes to say Stanford vs a mid tier state university will have the same outcomes in life? Unless this person has an exceptional will, this will never be the case. The kind of network that you will probably build at Stanford without noticing is vastly superior to the one at a mid tier state university. You probably personally know many people who've started up XYZ company, work for FAANG, top hedge funds, scientists etc... No one is saying that life is easy for a Stanford graduate, i'm sure any ambitious person will face a ton of rejection in their life time regardless of where they went to school but a lot of doors will open for you in your life time just because you went to Stanford vs going to UC Irvine.
But I'm more curious as to the people that can't get into Stanford and have to go to lesser schools like I did - what exactly are we to do? It's pretty clear that our outcomes are not going to be as good by any means, and it seems like political correctness limits any discussion of that.
It just means you are gonna have to initially work a bit harder, be a bit more resilient to rejection, and be a bit more creative in trying to build those networks. I.e You are going to have to force those doors to open for you.
If you discount that different people value different things in life, and take a viewpoint of money as being the sole measure of success, then the median Harvard salary after 10 years is like 90k? Certainly not every Stanford/Harvard/whatever graduate is killing it regardless of how many opportunities they have had. At the end of the day, success is really on an individual level. You make your own outcomes in this world. I could name countless people who've done very much without a degree from a prestigious university, David M. Solomon, the ceo of Goldman Sachs, Andy Rubin, etc... Certainly guys who went to HYP/X/Y/Z will have it easier in many regards, but you can also think of clawing your way to desired outcomes as teaching you life lessons that those guys will never have learned.
>My point is that for someone who could have gotten into Stanford, the actual admission it isn't defining.
I didn't get into Stanford (or anything like that, best I did was UNC in-state) - what exactly are my options here? It seems to me what you just said only applies to my intellectual superiors who are choosing between Stanford and UC Irvine, not the people that go to UC Irvine or Santa Cruz or Merced because they couldn't get into Berkeley or Stanford (who make up the majority of the country).
The fact is that people have this weird idea that college doesn't matter come from a position of immense privilege that someone like me doesn't even have the capacity to fathom. Of course it matters - being a Cardinal is a life-long thing, but being a member of the Wolfpack is more of a temporary embarrassment at best.
>>My point is that for someone who could have gotten into Stanford, the actual admission it isn't defining. Someone with that sort of intelligence and drive will find a way to meet the future CEO, get a great job and so on regardless of whether they attend.
Maybe, but getting into an elite college is a very strong signal that can act as a multiplier for every other character trait.
Having drive and intelligence is great. Having drive and intelligence, and getting into Stanford, is life-changing.
> If you could get into USC with a ~1000 SAT score like Huffman's daughter, would you even want to go? I wouldn't. It is shortchanging the achievement, and really missing the point of what admission to such a university represents.
Many people are happy to take advantage of these unfair "bumps" that happen to be in their favor. Simply look at elite school admission rates by race and LSAT/GMAT/SAT/ACT scores [1]...you'll notice that it is a lot easier to get in if you're Black or Latino compared to Asian or White...Maybe they feel like they don't deserve it, maybe they do, who really knows?
> ...which is not a sustainable approach to life when you get into the real world.
The real world if full of unfair advantages metered out by race/gender/alma matter/cultural background/etc...Some people are fine taking advantage of it and some aren't...In the Navy they have something informally called the "Filipino Mafia" which basically means that there is an overrepresentation of Filipinos that kind of control things and give out good deals to fellow Filipinos...as a Filipino I sure as hell took advantage of this...I got the good assignments and the poor White kid with no racial support system in the Navy got stuck swabbing the deck...that is just how it goes...There are "good old boys" clubs, there are "diversity hires", as well as many other kinds of unfair, unjust, and undeserved rewards. That is the real world, racial groups sticking together, genders sticking together, rich people sticking together, etc...
It may be "real world" but it's unfair and what you're suggesting is racist. Honestly if I were to join a "[race] mafia" like your "Filipino mafia" my family would shame me, because that's immoral. Just like those who joined the Nazis for professional advancement were supporting a racist system, even if they didn't personally commit crimes themselves. Hope you have some morals to not go along with those sort of systems.
> would you even want to go? I wouldn't. It is shortchanging the achievement, and really missing the point of what admission to such a university represents.
I think a lot of people (arguably the majority of people) view a degree as a piece of paper you need for a job. What you learn doesn't matter as much as having a high GPA from the right school and getting a job.
I think if you polled parents, it'd be a split of those willing to do fake scores, bribe officials, whatever it takes to give their kid a leg up.
An officially sanctioned form of this is retaking standardized tests and super-scoring. For those who can afford it, you can retake the test as many times as it takes to get the score you "deserve." If you can't get the right score in one sitting, you can cherry pick the best scores from the 4 or 5 times you took the test.
It defeats the whole purpose of a standardized test. It no longer a random sample of an estimate of a student's knowledge/ability. It's how well did you prepare. How much did you spend on tutors. How many times can you afford to take it.
I guess what I'm trying to say is that SAT scores are all bullshit, especially for top schools.
That’s a pretty miserable way of looking at the college experience. Anecdotally, most college students I’ve encountered care a great deal about what they learn and appreciate college for more than a rubber stamp. But, likely depends on where you go and who you’re associating with.
The issue you raise with standardized testing could be addressed by subsidizing the cost for low income students or making the test free. The wealthy girl in the article apparently couldn’t get a good enough score regardless of how many times she could take the test. Personally I think we need some form of standardized testing because it’s the only standardized measurement tool that exists.
What I find interesting is that when my kid got into a UC via a semi-sport yes, it helped her, but only a tiny bit -- the overall average GPA for these students is only slightly lower (by two points -- 4.0 vs 4.2) than the overall average of who get in, but you still HAVE to make the requirements, and the SAT requirements and other requirements stay exactly the same. Why is it different at other schools like UCLA? That would seem to be an easy fix for this.
I think it's because mail used to be the predominate means of interstate commerce so most federal fraud charges would focus on mail naturally due to volume.
The underlying problem is that a college only needs a smattering of renowned alumni in order to maintain its academic prestige; graduating a whole lot of dummies who paid their way in doesn't detract from the cherry-picked examples of academic achievement. The remaining bulk of its prestige can be rooted in money and social position. That seems to be the formula.
A friend of mine, from high school (~1994), had the experience of being in a family that won the state lottery. He skipped high school a lot after that, driving around in his new car. Later, I heard his parents bought him a degree from USC. USC has had a reputation in California of corruption for decades. This story should not be a surprise for many.
Getting in to college in the mid-90s wasn't as hard as it is now. I can't speak for USC, but when I started college in 1995 there were no concerns from the guidance counselors with my grades and SATs to get into any public school. I don't think with those same grades you are guaranteed a spot these days. There are just so many applicants for college that you have to be in a higher percentile.
I think this is an issue for the universities to settle with their employees that are diverting funds away from the universities for personal gain.
It becomes a government and criminal matter when those same private institutions benefit from government regulations, such as loan guarantees, that are not available to other private institutions.
I wonder why they are only mentioning the “wealthy parents” in this article over the corrupt administrators that enabled them?
This seems like a pretty straightforward issue of an employee doing something shady they should be fired for. I'm sure they will and the schools will put into place checks to make sure this is harder in the future.
> Is donating 'sexual favors' ok ?
Prostitution is currently illegal and I'm sure this against the most colleges code of conducts. I really can't imagine a possible future where this becomes a problem. "Come to HigherEdUniv, we accept an SAT score of 1400 or 1200 and a blow job".
> Should the same principles be applied for job promotions in private corporations ?
Sexual favors? No this is currently illegal and falls under sexual harassment / prostitution.
Giving a lot of money to a corporation for a promotion. This seems like pretty straightforward yes, companies exchange money for control all the time. YCombinator is founded on it.
Giving a lot of money to a boss without the agreement of the company for a promotion. This is shady but I've never seen or heard of this happen in the U.S. Normal corporate governance seems to take care of this issue.
> Is it ok to do similar differential treatment, for different students, for their grades throughout the study, and not just initial admission?
From a legal standpoint sure this seems ok. How long would a university exist if they did this, not very long.
> … aren't those kinds of behaviors, that are then breading the 'financial services execs that 'look the other way' and caused financial crisis of '08?
Completely different problem and set of behaviors. These types of scams involve only a handful of people and have very little impact on society. Financial crises happen pretty often and affect everyone in the U.S.
Private universities are private as in control, not in funding. John Hopkins is a private university whose research is nearly 90% funded by the government. None of the private universities can exist without government funding.
So when Harvard professor whose salary comes from grants lectures a donor's child, who didn't get the grades to be there in the first place, it raises a question, if the arrangement makes sense.
It's understandable that every parent wants the best for their children and wants to give them a leg up in life and will do almost anything help their children. It's human nature that every parent appreciates and you can't fault them for that. But bribing and cheating isn't fair to other parents and their children.
But then neither is legacy preference of alumni's children. Or giving special treatment to large donors. Or a slew of other preferential admission policies.
How does one even start to fix this? It's structural and natural. The longer you live, the more you realize life isn't ideal. Meritocracy and fairness are wonderful ideals but ultimately impractical and unrealistic. Or maybe we just haven't evolved to that stage in human development?
I recently watched Forrest Gump and this story reminded me of Gump's mother trading sexual favors for school admission for her son. Was that ethical or even legal? I imagine we could argue about it forever and never come to a satisfactory conclusion.
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[ 2.8 ms ] story [ 287 ms ] thread* Entrance exams in the US are created by one of several private entities (College Board, International Baccalaureate, ACT) and administered by the local secondary schools.
True. Usually the norm is that wealthy people are exempt from prosecution. I am sure whoever pursued this will get a lot of angry calls from powerful people.
It's ok to post stories from sites with paywalls that have workarounds.
In comments, it's ok to ask how to read an article and to help other users do so. But please don't post complaints about paywalls. Those are off topic.
The NYT, for example, is running a special right now at $2/week. Considering the number of Times articles that land on the HN front page, it seems like a worthwhile investment.
https://news.ycombinator.com/item?id=10178989
https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...
Now that you know this, can you please stop posting off-topic comments like this one and https://news.ycombinator.com/item?id=19299014?
My mother did well in the Masters program at Stanford and I would have likely gotten in if she donated a couple million dollars but she didn’t and I didn’t (despite getting an invitation a year after accepting enrollment at another university).
It’s not like we ever had that type of money, but if we did I wouldn’t have wanted that.
It seems like they’re targeting this more obvious version of bribery but not digging in and targeting the systemic issue of affluent people buying their children’s spot in college.
I really don’t think it’s much harder to prove that an underperforming student who got in because their parents donated a couple million (or tens of millions of) dollars took the place of a more qualified candidate. Maybe I’m wrong...
A guy donates an engineering complex, and every engineering student on that campus gets to take advantage of said complex and its resources. Guy donates a new business school building and every student on that campus can take advantage of said building and its resources. In exchange, the university lets in two girls, their daughters or whatever, who might want to major in Art History and French, and coincidentally will likely be inheriting a few hundred million to upwards of a billion dollars in the future. (Future donors.)
It's a fair trade. I'm not wealthy on that level, but if I were calling the shots at a university I'd make that trade every time.
It sounds like you agree, then? It should be public.
It's left unsaid because it's better for the brand to pretend that this isn't a thing and that just because your parents gave money or because your parents are famous doesn't mean they'll let you in.
if you have to ask for price ... :)
But would you be proud enough of the policy to publicise it and your price list?
Because I'd do it, but I'd also be embarrassed I was doing it.
Also, in the interest of truth-in-advertising, shouldn't the institutions that practice this not have to rename themselves from "university" or "college" to "degree supermarket"?
Donating for improvement that affects others is one thing, but donating for a quid pro quo might affect this.
In other words, is the concept of creating barriers to entry, limiting competition, not unreasonable? In any market, economists say that is anticompetitive, and should even be illegal.
Are people paying for education? Or for epaulets?
So let's talk about this "materially improving things for other students" in an honest context of what this is.
We are already far past the point on using exam scores as a basis for admissions. Many of the Ivies, famously say every year that they could fill their incoming class with students with perfect scores and perfect GPAs many times over forcing these schools to consider other factors. The US DoE says there are 16.9m undergrads, assuming ~4m are freshmen, the top 1% is 40,000 students. The Harvard freshman class size is 2000 students. At this point its only natural, according to the "market", that people would be paying for slots.
If you believe the primary purpose of a university is to educate and certify, that is indeed "not much". But if you believe that the education is secondary, and the actual primary purpose is to cultivate a social network of influential graduates and dropouts, and to act as gatekeeper to future opportunities, then that bribe is better than a perfect SAT score.
That kid will end up with seed money or angel investments from mommy and daddy, and will be able to hire some former classmates right out of the gate, and they might build a unicorn, which will forever be tagged with "founded and built by a team of University X graduates".
In that sense, no one is robbing anybody of a spot. There are genius spots, and rich idiot spots, and the only problem is getting a few from each pile into the same rooms, with a reason to talk about their futures. One way is to coerce the rich kid into studying (or cheating) their coursework by paying off the genius kid. Management training.
Buying a basketball team and hiring a coach in order to win is legal. Paying one player to lose a game is not legal.
It's the opposite actually; if you're giving money to the development office then you're enabling more qualified students to attend the school.
That’s why college only costs 50k per year when it costs 150k to provide that service to you.
But, generally, your point is correct. In this case, there was an explicit pay-off/bribe/fraud committed. In the case of the super-wealthy, there's a large donation and a wink-wink/handshake.
My local college was a blessing to me. It provided me an education, a safe atmosphere, and most of all, confidence. It changed me for the better. I'd like to donate to the college if I were in the position to do so, and because I had such a great experience, I'd encourage my child (don't have one, yet) to go.
It this wrong of me?
Obviously, people's opinion on that will depend on their opinion on things like admissions essays and extracurricular activities; anything like "I learned a good work ethic helping my father with his senate campaign" will have to go.
Blind grading after admission would be sensible too, for the same reasons. Although perhaps difficult in subjects where individual students' work was identifiable even without their name.
In this case, we're talking about bribery of specific employees to act against the interests of their employer. That's simply corruption.
They might be equally non-meritocratic, but they're definitely not equally dishonest or equally socially harmful.
This place has turned to horsesh!t ...
One of the reasons people want to go to these schools is because they have lots of resources. If you ban wealthy parents and alumni from donating, the school wont be outstanding, so the University has good reason to accept these.
https://www.aau.edu/sites/default/files/AAU%20Files/Key%20Is...
"charitable, scientific, testing for public safety, literary, or educational"
Obviously a university is scientific and literary, and a college is educational.
Actually, they are publicly subsidized (by tax deductibility of donations made to them) because they are private charities.
Undergrads are pretty much irrelevant to major research institutions (e.g. my undergraduate alma mater MIT spends only about 16% of its budget on undergrads who are actually subsidized -- tuition is about 14% of revenue). Grad students are what matter and apart from the B school they are mostly paid (barely) to attend.
Research, including scientific research, does happen at institutions that aren't "research universities."
It feels like having a purely merit based population of students would create a very stagnant and dull environment.
It feels like having a purely merit based population of students would create a very stagnant and dull environment.
'This university sucks! Everyone here is a nerd.'
OK, you probably did not mean it that way but I can't resist having a little fun with this. If all you want to do is shake things up, why not just draft random working class people via lottery? For extra amusement, make them go even if they don't want to. True, we would not learn anything about the perspective of the super wealthy, but they already have billboards and TV stations to inform us of their opinions.
Yes, there's a system available to the masses that the super-rich are bypassing using their wealth. The same is true of anyone who flies by private jet, or anyone with private health insurance in a country where the vast majority of the population uses the public health system. Are these things "corrupt"? What's different here?
If there's no dishonesty and nobody is harmed, what's the moral issue? Why are universities, unique among all society's institutions, required to operate as perfect meritocracies?
Short answer: The difference lies in the transfer of wealth to the next generation and our meritocratic values.
As a society, we have a value system that we implicitly adhere to. At least in the US, meritocracy is big part of our value system.
We believe that if you work just as hard and contribute just as much as your neighbor, you deserve to enjoy the same quality of life.
So, let's look at some examples:
Example A) Person A works his/her ass off and becomes rich off the fruits of his labor. He then spends his riches on private jets and private health insurance.
Does this conflict with our meritocratic values? No. He deserves a higher quality of life because he worked his ass off.
Example B) Person A then purchases access to an elite university for his child, who as a direct result, enjoys a better life than his poorer peer who works just as hard.
Does this conflict with our meritocratic values? Yes. His child didn't deserve their higher quality of life because they didn't work their ass for it.
You don't have to agree with meritocratic values, but it explains the difference.
There are portions of what schools are doing here which are perfectly normal. There are portions which may not be (I imagine public funding may preclude certain admittance options, but I'm not sure). If the school is willing to put up with now the public perceives these actions and how it affects their business (because it is a business), then that's their decision.
My intent was to demonstrate that whatever is going on is hush hush for a reason, and not comparable to a legitimate transaction where a private business owner chooses to sell a product or service to someone at whatever price the two agree upon.
I would say that every donation carries with it the possibility of some benefit to the donator, no matter who does it. There's always the public relations or social benefit or being seen as "doing a good thing". Without this benefit, some amount charity might go away. Does it matter that people or organizations give because they see benefit to themselves in it? I think not, and I think the tax law is set up specifically to turn a blind eye to this. In that respect, it's not fraud at all, it's how the system is designed to work to promote charitable giving.
Also, since to my understanding most of this "advertising" for donations which results in naming a building is to individuals, it also depends on how you classify advertising. Is establishing a legacy for yourself so you're looked on favorably after you're dead advertising? We generally don't call it as such, but even it is, so what? Does is promote more good or harm to society in general? That's the only metric we should measure it by.
What if it's a hospital or clinic in an area? Are those people being stolen from or left worse off for it being possible in their area because someone gets their name there?
I can't help but feel you're being both far too pedantic in wanting to prosecute a crime that doesn't seem to actually hurt anyone (and actually benefits large groups and communities), and also completely misidentifying it as a crime when it's allowed by tax law.
I mean, at least part of the purpose of the law is to encourage people to give their wealth for the good of society by encouraging additional benefits (write-offs) in addition to the benefits that have always existed (recognition), so all I see here is a system functioning as designed, for the good of all. I'm not sure how you're seeing some great miscarriage of justice here.
The simplest argument, however, is that the purpose of taxes is to provide the services that a society wants, theoretically indicated by the way it votes. The services and products that the taxes buy should benefit everyone in the nation. If the country has a budget of $x and needs to levy a tax of $y (obviously must be calibrated to ability of one to pay), then why are we allowing adjustments to this?
Why open up the door to abuse? If you want to donate, then donate, what difference does that make to the money needed for government expenditures? The fact that we would even need a donation to a hospital is indicative of a broken system.
The end result of the tax deduction is that we have abuses, and we now have to spend more resources to police the abuses. And the only way to stop the abuses is to close the loophole that allows it.
All of the complexity of the tax laws simply enable more and more corruption. We should be aiming for transparency and simplicity, and instead we end up playing this "steal or be stolen from" game where you try to suck more out of it (but don't make it obvious) than you put in. How does donating millions to Harvard or an art museum benefit society? And even if it did, why would we want to give up our democracy's power to democratically spend the tax receipts the way we want, and instead give that power to a single person to spend however they want?
The reason you're having trouble identifying who is hurt in this case is because very, very few are, but the people who benefit are generally a large group.
In the worst case of the story in question, if someone donated a large amount to a school and their child was given preferential treatment, the loser is possibly a child whose spot is taken, but the beneficiaries are all the other students of the school, and possibly an additional amount of future (or current) students that would not have been able to attend, if those funds are used to allow more applicants.
> The simplest argument, however, is that the purpose of taxes is to provide the services that a society wants
This is a tax program used to incentivize trade of non-traditional goods, and trade generally benefits all involved. What we have are people that are not benefiting society in a way they could (people saving money that's not being put to use in the economy, but specifically more so than needed to safeguard their safety or way of life), and a program to incentivize them to use it in exchange for goods they desire (recognition, genuine altruism) but might need a push to pursue. That push is the government subsidization of the transaction to some degree.
As subsidies go, encouraging wealthy individuals to give money to causes that have to prove they aren't doing it for profit is probably my favorite. Sure, it can be abused by unscrupulous individuals or organizations on both ends, but I'm confident the social good achieved (over people just hoarding wealth longer) far outweighs the negatives.
> All of the complexity of the tax laws simply enable more and more corruption.
Non-profit deductions are simple. You'll have to do much more to convince me that a few anecdotal misuses outweigh what I see as one of the major causes of redistribution of wealth from the wealthy to the less wealthy over many decades.
The pragmatic approach is to attempt to measure who is hurt and by how much, and who is helped and by how much, before making an ultimate decision on whether this is good or bad. I doubt keying off anecdotal media stories about misuse of a tax law will yield better results than that.
> So, to recap, paying someone to steal my car is bad, but paying me to give you my car is fine. Got it.
Maybe not in the 1800s, but doing that today violates any number of published school policies. It likely also violates several laws, especially if the school receives state/federal funding (they all do). Violating published policies, circumventing established admission systems, and denying a spot for a qualified candidate in order to accommodate a wealthy donor, that is the definition of corruption.
A few, most famously Hillsdale, refuse government money in order to protect their civil liberties (including as race-agnostic admission procedures, for better or for worse).
https://deanclancy.com/a-list-of-colleges-that-dont-take-fed...
Sometimes, alumni give to their alma mater for charitable reasons! And some USC grads do better than some Yale grads, I'm sure.
But maybe the IRS should try to brush back the most conspicuous cases of donating to receive admission. I'm seeing stories of admissions officers being pretty open about it at Ivy League schools.
I think it's a corollary of their misguided "money is speech" interpretation of the 1st amendment. A university admissions bribery case is unlikely to benefit from such 1st amendment arguments.
This is a little overgenerous.
> In this case, we're talking about bribery of specific employees to act against the interests of their employer. That's simply corruption.
Perhaps. What crime is it?
I went and looked at the charges that were filed, here: https://www.justice.gov/usao-ma/investigations-college-admis...
(Kudos to patch.com for actually including a link to the charges in their coverage. Middle finger to the Washington Post.)
Charges are divided into three groups, which appear to correspond to different roles in the bribery. At the top are four people "charged by information". William Singer and Mark Riddell are charged with conspiracy to commit money laundering. (And some other charges.) Based on the media coverage, this is because some payments in the bribery system took the form of donations to a nonprofit operated by Riddell, and this is tax fraud. (One of those other charges is "conspiracy to defraud the United States".) Rudy Meredith is charged with wire fraud, the catchall crime that everyone in the country is guilty of. John Vandemoer is charged with racketeering.
The second group, "charged by indictment", are all charged with racketeering, except for David Sidoo who is charged with mail and wire fraud. I don't know what these people are supposed to have done. I'd like to think that a racketeering charge requires the organization you're involved with to have committed a crime; that would imply that what they're really charged with is helping the sham charity commit tax fraud.
The third group, "charged by complaint", are the parents. One and all they are charged with conspiracy to commit mail fraud.
It doesn't look to me like paying an admissions officer to admit your child is a crime at all. Similarly, bribing a maitre'd to seat you more quickly is bribing a specific employee to act against the interests of his employer, but it's not a crime. Taking the bribe might or might not be a crime. All of the charges here that involve a crime relate to using a sham nonprofit for tax benefits.
I have not had a chance yet to look properly at the case, but I'd assumed the "fraud" charges are for precisely the act of paying an admissions officer to admit a child. Do you have reason to think that's not the case?
> bribing a maitre'd to seat you more quickly is bribing a specific employee to act against the interests of his employer, but it's not a crime
It's petty enough you wouldn't expect anyone to be prosecuted over it, but are you sure it's not a crime?
> It's petty enough you wouldn't expect anyone to be prosecuted over it, but are you sure it's not a crime?
It looks like the legal status of commercial bribery (no involvement of a public official) in the United States, while often illegal, is not always clear-cut: https://en.wikipedia.org/wiki/Commercial_bribery
wikipedia.org/wiki/Tortious_interference
When the mails are used in the course, the federal offenses that appear to be involved from the charges in this case are “mail fraud” and “honest services mail fraud”; the bribing of the officials would probably also be criminal frauds (against the university) under State law.
> It doesn't look to me like paying an admissions officer to admit your child is a crime at all.
Then why are people being charged with (or pleading guilty to) criminal fraud (or patterns of racketeering activity where the concrete racketeering activity includes criminal frauds) for doing that, conspiring to do it, or facilitating other people doing it? Yes, the federal government doesn't have jurisdiction over mere fraud, so it's the use of the mail that is key to the federal charges on this case, but the basis of the charges here (other than the money laundering and tax fraud related to concealing the quantity and source of the profits from the main scheme) are all about bribing school and test administrators.
However, the daughter was rejected outright due to a multitude of factors. She wasn't violent, or addicted, or lazy. Nothing like that. She just wasn't ahead of the other applicants.
Well, you can imagine that the parents were none too enthused. All the love they had for that college, those dreams for their daughter, gone. There were phone calls and in person visits. Still, the daughter was not what they were looking for.
In the end, things have gone alright for everyone. The building still has their names on it, though the donations have ceased. The daughter is doing just fine at the school she is now at. The college is dealing with it's own issues just as it ever was.
Though there may be corruption at many universities and colleges, there are still a fair number of places where merit and fair decisions still reign. I'd look to those schools for the graduates to hire. Integrity is still in high demand, just as it will ever be.
My Alma-mater gave me access to leaders, hiring and referral opportunities, and even a life long partner with similar ambitions. I can probably name a good long list of of people I can call and get a a little help from now if I was in a bit of a pinch or need a little perspective.
Granted, I went to a smallish regional state school. The experience there, or at, say, Small Liberal Arts College, may be very different from Big State Engineering or Pressure Cooker Elite U.
Sometimes though, we need instruments to do science, so that's another major purpose for undergrad work. Occasionally. But if the undergrads decided to all take online courses one day, it would sure help the grad get work done.
Probably? Personally my first semester at uni was depressingly dull other than the novelty and the subjects (well, mostly dull there too but the future semesters looked interesting and I was programming for the first time). By chance I was walking through a club recruitment event when a single person stopped to talk to me and tried to convince me to join and come to a meeting that night. They got my email too. Well, I didn't go to the meeting but a few days later an email showed up saying the first practice will be tomorrow. I figured why not, I'm not doing anything, and showed up. I stuck with it for four years, taking on duties over time until I was president, it was most of my social life (e.g parties, hanging out) and I made most of my friends through it, shifted my lifestyle from videogames and procrastination to working out, having fun with sport and mastering it, having flow/mushin consistently, and getting work done ASAP, and other considerations.
I've never felt the desire to donate to my old college, but certainly I already have donated to my old club and have considered doing more for it. I assume folks with very good experiences were part of some sort of organization: my high school friends that stuck together in college without branching out had a good time but was overall meh.
Sorry to hear that. What are some ways to cheat school? (waste of time)
Edit: apart from catching on your reading (listening) and scrolling on hackernews.
They provide a service, and they charge money for it. The university operates as a business. I don't donate to Wal-Mart, so why would I donate to University X?
Why wouldn't you instead endow a scholarship for students of your favorite college? Instead of giving cash to Wal-Mart, buy prepaid Wal-Mart gift cards, and pass them out to fellow customers. The university doesn't need your donations. It is fully capable of building its own buildings outright, begging for state funding, or at least issuing bonds backed by future tuition. If someone is so keen on having a building with their name on it, perhaps they should instead construct some off-campus student apartments, and make some nice signs in the same general style as the university signage.
Actually, in the US, at the vast majority of universities, the primary job of faculty involves teaching, extension/outreach, and forms of service like mentoring students. Most universities have research expectations, but that is not how faculty spend their time.
> and tuition doesn't pay for research.
This is a STEM-oriented view. In a lot of fields the primary cost of research is faculty time, and it is often paid by tuition.
While I don't doubt there are colleges out there that primarily function of tuition, I'm fairly confident that the schools that the GP was talking about which take in millions of donations, are not funded by tuition - STEM or not. Endowments are practically tax-free hedgefunds. There are several liberal arts colleges in boston with billion+ endowments - where the return alone on the endowment rivals the total revenue from students (assuming they were all paying the full 50k, which they likely aren't).
Now, you can argue that incentives sometimes get messed up, but that is the case for ALL charities/non-profits.
It is possible to set up a non-profit business such that the money that comes in goes out through different ports than the ownership outflow pipe. A typical setup for a corrupt non-profit is for managers of the business to earn above-market salaries, and to own for-profit businesses that "compete" for service contracts with the non-profit entity.
For example, Jack Grift establishes a non-profit charity for orphan children with fantods. He works the circuit and manages to fund it to the tune of $1M per year. He leases a nice office space in a building owned by Jack Grift AAA Office Space, and contracts with Jack Grift Janitorial Services to empty the trash can, and sets the charity's salary for CEO at $250k/year, and Chief Revenue Officer at $100k/year, plus a bonus of 5% of incoming donations. Jack, of course, holds both positions. He gets $250k as CEO, $150k as CRO, $100k as his own landlord, and $50k for taking out his own trash. He rolls $440k into uncapturable overhead, marketing, and fundraising efforts, and still has $10k left to supply orphans with copies of both Huck Finn and Tom Sawyer.
The finances of universities are even more obfuscated, but it is undeniable that some university employees have the power to spend the organization's money for their own personal benefit. Catered faculty luncheons. Campus beautification in and around personal offices. Settlements from the university to forestall civil suits based on personal indiscretions. Premium parking spaces. These expenditures may, in fact, be justified by the mission of the university, but it is impossible for me to audit any given university's accounting books to make that determination for myself before deciding whether I want to give them more money than they demand on their invoices.
There are a lot of outflow pipes for business revenues. Non-profits only close one of them.
Because endowing a scholarship is setting up a charity and donating to a University (the kind anyone donates to, at any rate—no one is endowing chairs at the University of Phoenix) is giving to an existing charity; the two probably have similar tax, feeling of giving back, and status/ego benefits, but the former is more work.
As charities, universities massage their financials to make themselves look better. They set the tuition rate. They determine the scholarship amounts. They bring in dollar-denominated donations, but the actual "charity" they provide is a nebulous value for the amount of additional knowledge and education the student would have been otherwise unable to acquire without paying more out of their own pocket in tuition. The university decides what that is worth anyway. They move $50k from one pocket to another, and then say they gave away $50k worth of education.
A private scholarship charity can't play those games, because the costs of education are set by someone else.
If you are perfect at setting up and managing a charity, perhaps, but then if you are concerned with education, and what something perfectly aligned with your values, may mean you need to set up a university, not a scholarship fund.
> whereas the highest paid employees of the existing "charity" are probably the president and the men's football coach
You assume that this conflicts with, rather than reflects, the interests and values of the kind of people who donate money to the universities. I think that if you explored the issue you would find that it is not the case, and particularly that the variation in whether or not that is true at any particular university correlates very neatly with the values of the people who donate to the university. (As far as causal explanations, I would assume that there is a two-way feedback loop; donors who value football will make a school more likely to pay the football coach well which will attract more donations from people who value football and less from those who do not, etc.)
> A private scholarship charity can't play those games
Yes, but that's just another way of saying that a private scholarship charity has a lot less control of what actually gets delivered as education than a university.
Not sure that's a reason to support the former over the latter, though, especially when the choice is taking the additional effort and cost to set up the former; its just another way of saying "less bang for the buck".
Many people do. They also give money to improve football facilities, bring speakers to campus, and endow a chaired professor position.
> I don't donate to Wal-Mart, so why would I donate to University X?
Because a university is a nonprofit that exists only for the purpose of improving the world. (Not necessarily the employees, who work there as a job, but it's why universities exist.)
You probably don't see a lot of donations to the University of Phoenix or other for-profit universities.
For something like fifteen years of my life I owed well over a hundred thousand dollars of non-bankruptable debt because of the fees this "non-profit" charged.
A "non-profit" university exists for many, many reasons. Giving the dean a million dollar salary is one of those reasons. Student education is likely third or fourth on the list.
When it's time for my children, I want the organization that will be teaching them about professional and ethical conduct in the real world to not only not be corrupt, but also demonstrably free of all prejudicial biases in the applications process.
Which is to say, I want my children to be assigned a randomized identifier and their personally identifiable information anonymized, before their application is given to an admissions officer, so that irrelevant qualifications like the amount of money parent alumni have given to the organization are not and cannot be used for an admit/no-admit decision.
I'm fine with your kid getting a 2nd-floor room in the posh dormitory, and first bite at class scheduling. You can pay for additional conveniences, but not to deny someone else an opportunity earned by their own hard work.
If my kids aren't going to get preferential status then there is no reason to be a sponsor of that institution over any other.
Given that your top comment is, "I don't understand why people donate to Universities," I'm not sure that you're in a great position to say that others shouldn't receive priority admission. If everyone did what you did then our University system would collapse.
It is a tax status (actually, a group of them), but the name has substantive meaning, since to qualify for any of them there must be no one with a claim on the entity’s accumulated earnings.
> That actual charitable causes happen to be non-profit is a coincidence.
It's not a coincidence, it's an actual legal defining characteristic of the kind of nonprofit to which donations are tax deductible.
I agree that the practice of university donations in exchange for college admission is neither legally corrupt nor dishonest.
However, it is still wrong according to our societal values.
That is, we have a value system that we implicitly adhere to and meritocracy is big part of our value system.
At least in the states, we believe that if you work just as hard and contribute just as much as your neighbor, you deserve to enjoy the same quality of life.
When parents purchase access to an elite university for their child, they are conferring an advantage to their child over the child's peers that is unearned and unfair.
Elite college admissions is a zero sum game. There are only a certain number of spots available and purchasing a spot for a kid who slacked off in school necessarily takes the same opportunity away from a more deserving kid.
>>It may not be meritocratic, but it's not corrupt
Its just dampening the effects a little, but its the same though. Donating X, just means the person who bought in the donation gets promoted or gets awarded some bonus or gets rewards by their employer(university). Instead of receiving the bribe directly.
This is a classic trick from corruption handbooks used by ace corrupt people.
When you trade something for something which could be wrong, only stupid people directly do it through exchange of money. Clever people trade through favors and indirect profit/help. They also call this lobbying in places like politics. In many other places they call these things incentives, commissions, brokerage or whatever.
This is really one of those classic problems with defining corruption. Books and stories can always be cooked in a way to make anything look good.
I understand the legality and the law is the law, but let's cut the c*ap, both sides are cheating. The poorer side gets caught because they don't have the money needed to bribe the University, they have just enough to bribe its employees.
As far as I can tell, saying "get really good test scores or pay us a million dollars to get in" is not illegal.
There's a reason no university simple states a price on their admissions page
This is very different from buying entrance to a university. Universities are allowed to admit on any criteria that they want (with a few exceptions). They are private organizations.
Front Door: Student performance (scholastic and academic)
Back Door: Family donations
Side Door: What this article is about. Part of the ruse was faking athletic credentials to get into a more likely of admissions candidates (athletes have an advantage, apparently).
So in this case, they lied.
When you "donate" $1.2m to a "consultancy" you're just committing fraud. Nobody benefits except your kid and the "consultancy." It's much easier to prove that this transaction is fraudulent.
So in this case the government is going after fraudsters because the government isn't getting paid, and neither is the school. I'd be willing to bet that the government would have continued looking the other way if a) the wealthy had paid taxes on their bribe or b) there was some indisputable asset one could point to and say "there's my donation!"
"Donating" to the owner to to exactly the same thing is considered good business.
US Attorney re the Huffman/Loughlin (among others) college scam: "We're not talking about donating a building...we're talking about fraud."
https://twitter.com/yashar/status/1105493852578697217
Says quite a lot, doesn’t it.
*while also believing that, given the opportunity, I would choose to play it fair.
In practice, most of the defendants would be likely to get under 5 years assuming this is their first offense, don’t commit further crimes, etc.
Matt Levine today framed it rather neatly as a property crime, in that the dodgy charity guy and the coaches stole those selective admissions slots from the universities and sold them on to the parents. (Those parents of course being fully aware that other people would be taking test on their kids' behalf, so they are hardly victims.)
Their legal bills could easily surpass the amount of money exchanged to get their kids into these schools.
>The student’s parents paid $1.2 million in bribes, officials said.
I’m skeptical of the FBI’s investigative priorities. Wall Street is suddenly squeaky-clean? No more insider trading? Ponzi schemes have all gone away? Municipal governments across the land are staffed by honest and dedicated civil servants? All defense contractors are scrupulously precise about their billing and would never ever bribe a DOD procurement official?
I’m not saying it’s right to engage in cheating on the SAT or bribing someone to get into a university. But inarguably there are many more crimes that are far more serious.
This is a false dichotomy.
If all they did was go after the most heinous crimes, it would be immediately obvious that you can 'get away with' everything else.
Well, it's not like there's truth in advertising:
"We partner with your son or daughter to identify their strengths, unlock their potential, choose the right college, position themselves for admission, and outline a course of study and extracurricular experiences to lead to a life of success." -- http://www.thekeyworldwide.com/
For context: Yale's endowment is ~$40B and USC's is $5.5B.
For example California's public school system is one of the worst schools in the nation; even top schools like Palo Alto are pretty appalling compared to what I got on the east coast. And Palo Alto's schools get all sorts of "private" donations from PA residents, not shared with other schools. But almost all the high school and middle school students also receive private tutoring after school to make up for the crummy public education.
Probably the best way for an experienced engineer to get in at this point.
If you could get into USC with a ~1000 SAT score like Huffman's daughter, would you even want to go? I wouldn't. It is shortchanging the achievement, and really missing the point of what admission to such a university represents.
The reality is that the college you attend, especially for undergrad, has relatively little bearing on your life as a whole. If you're in the GPA/SAT range to get into Stanford, but end up attending UC Irvine instead, you'll be just fine. You might even graduate with less debt and at the top of your class. On the other hand, if your parents bail you out and buy your way into Stanford when you're not qualified, it sets you up for a life of disappointment. You'll likely struggle to keep up with classmates, and won't know what it feels like to achieve on your own. It teaches reliance on mommy and daddy rather than reliance on yourself, which is not a sustainable approach to life when you get into the real world.
In most cases yes. But when we're talking about elite colleges, it has significant bearing. Living in the dorm with a future CEO may be helpful in your future job search, and if you go to an elite college, you have a much better chance of having done that.
Going to Stanford or Berkeley or MIT or UW and doing CS there will mean that when you graduate, a whole lot of hiring managers will see that you attended the same college they did and give you an automatic boost.
And if you go to USC film school, you're pretty much guaranteed to know someone who will one day be very successful in the film industry and will help you get jobs or connections to have your own projects produced. Heck, the school does that for you.
So yeah, in most cases it doesn't matter, but in some very specific cases it does.
I went to Stanford. I love my undergrad. But I also have faced plenty of rejection and adversity on the way and since graduating. What matters is how you respond to that rejection, which is what the struggle to earn admission reflects. Having your parents bail you out means you will never learn those lessons.
But I'm more curious as to the people that can't get into Stanford and have to go to lesser schools like I did - what exactly are we to do? It's pretty clear that our outcomes are not going to be as good by any means, and it seems like political correctness limits any discussion of that.
I didn't get into Stanford (or anything like that, best I did was UNC in-state) - what exactly are my options here? It seems to me what you just said only applies to my intellectual superiors who are choosing between Stanford and UC Irvine, not the people that go to UC Irvine or Santa Cruz or Merced because they couldn't get into Berkeley or Stanford (who make up the majority of the country).
The fact is that people have this weird idea that college doesn't matter come from a position of immense privilege that someone like me doesn't even have the capacity to fathom. Of course it matters - being a Cardinal is a life-long thing, but being a member of the Wolfpack is more of a temporary embarrassment at best.
Maybe, but getting into an elite college is a very strong signal that can act as a multiplier for every other character trait.
Having drive and intelligence is great. Having drive and intelligence, and getting into Stanford, is life-changing.
Many people are happy to take advantage of these unfair "bumps" that happen to be in their favor. Simply look at elite school admission rates by race and LSAT/GMAT/SAT/ACT scores [1]...you'll notice that it is a lot easier to get in if you're Black or Latino compared to Asian or White...Maybe they feel like they don't deserve it, maybe they do, who really knows?
> ...which is not a sustainable approach to life when you get into the real world.
The real world if full of unfair advantages metered out by race/gender/alma matter/cultural background/etc...Some people are fine taking advantage of it and some aren't...In the Navy they have something informally called the "Filipino Mafia" which basically means that there is an overrepresentation of Filipinos that kind of control things and give out good deals to fellow Filipinos...as a Filipino I sure as hell took advantage of this...I got the good assignments and the poor White kid with no racial support system in the Navy got stuck swabbing the deck...that is just how it goes...There are "good old boys" clubs, there are "diversity hires", as well as many other kinds of unfair, unjust, and undeserved rewards. That is the real world, racial groups sticking together, genders sticking together, rich people sticking together, etc...
[1] https://nypost.com/2018/10/17/harvards-gatekeeper-reveals-sa...
I think a lot of people (arguably the majority of people) view a degree as a piece of paper you need for a job. What you learn doesn't matter as much as having a high GPA from the right school and getting a job.
I think if you polled parents, it'd be a split of those willing to do fake scores, bribe officials, whatever it takes to give their kid a leg up.
An officially sanctioned form of this is retaking standardized tests and super-scoring. For those who can afford it, you can retake the test as many times as it takes to get the score you "deserve." If you can't get the right score in one sitting, you can cherry pick the best scores from the 4 or 5 times you took the test.
It defeats the whole purpose of a standardized test. It no longer a random sample of an estimate of a student's knowledge/ability. It's how well did you prepare. How much did you spend on tutors. How many times can you afford to take it.
I guess what I'm trying to say is that SAT scores are all bullshit, especially for top schools.
The issue you raise with standardized testing could be addressed by subsidizing the cost for low income students or making the test free. The wealthy girl in the article apparently couldn’t get a good enough score regardless of how many times she could take the test. Personally I think we need some form of standardized testing because it’s the only standardized measurement tool that exists.
Maybe they don't think they're cheating. Maybe they've just grown up thinking they deserve whatever they can buy.
The coach is not a government employee, so aren't you legally permitted to bribe them?
https://www.justice.gov/usao-ma/investigations-college-admis...
Weird that they have so many of them on "mail fraud." That part confuses me more than it enlightens me.
A) a private university can set any criteria they want for admissions.
B) a private, federally accredited, university can set different criteria of admission for different people
C) If a parent donates large amount of money directly to the school, and their children get accept with lower criteria -- it is perfectly ok.
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Are there conditions, that would not make this line of thinking not ok ?
Is donating 'sexual favors' ok ?
Should the same principles be applied for job promotions in private corporations ?
Is it ok to do similar differential treatment, for different students, for their grades throughout the study, and not just initial admission?
What does it mean to be an 'accredited university'? Does accreditation implies any form of fairness? Is that legally enforceable ?
Will the deans of those universities be responsible for lax rules, eg.. looking the other way?
… aren't those kinds of behaviors, that are then breading the 'financial services execs that 'look the other way' and caused financial crisis of '08?
It becomes a government and criminal matter when those same private institutions benefit from government regulations, such as loan guarantees, that are not available to other private institutions.
I wonder why they are only mentioning the “wealthy parents” in this article over the corrupt administrators that enabled them?
> Is donating 'sexual favors' ok ?
Prostitution is currently illegal and I'm sure this against the most colleges code of conducts. I really can't imagine a possible future where this becomes a problem. "Come to HigherEdUniv, we accept an SAT score of 1400 or 1200 and a blow job".
> Should the same principles be applied for job promotions in private corporations ?
Sexual favors? No this is currently illegal and falls under sexual harassment / prostitution.
Giving a lot of money to a corporation for a promotion. This seems like pretty straightforward yes, companies exchange money for control all the time. YCombinator is founded on it.
Giving a lot of money to a boss without the agreement of the company for a promotion. This is shady but I've never seen or heard of this happen in the U.S. Normal corporate governance seems to take care of this issue.
> Is it ok to do similar differential treatment, for different students, for their grades throughout the study, and not just initial admission?
From a legal standpoint sure this seems ok. How long would a university exist if they did this, not very long.
> … aren't those kinds of behaviors, that are then breading the 'financial services execs that 'look the other way' and caused financial crisis of '08? Completely different problem and set of behaviors. These types of scams involve only a handful of people and have very little impact on society. Financial crises happen pretty often and affect everyone in the U.S.
So when Harvard professor whose salary comes from grants lectures a donor's child, who didn't get the grades to be there in the first place, it raises a question, if the arrangement makes sense.
But then neither is legacy preference of alumni's children. Or giving special treatment to large donors. Or a slew of other preferential admission policies.
How does one even start to fix this? It's structural and natural. The longer you live, the more you realize life isn't ideal. Meritocracy and fairness are wonderful ideals but ultimately impractical and unrealistic. Or maybe we just haven't evolved to that stage in human development?
I recently watched Forrest Gump and this story reminded me of Gump's mother trading sexual favors for school admission for her son. Was that ethical or even legal? I imagine we could argue about it forever and never come to a satisfactory conclusion.