No, as there are already numerous Hopkins things bearing Bloomberg's name for many years -- including a 7-story physics/astronomy building, and the entire graduate public health school. The new $1.8B is in addition to previous total gifts of $1.5B.
Bloomberg previously established a scholarship program for high-achieving incoming undergrads, but it was limited in size to a few dozen students a year. It sounds like the new money will allow this to expand to all students in need. Some universities like Harvard already did this, but Hopkins never did, due to its endowment being smaller than its peer institutions.
This could be very good for the future of Baltimore. Many decades ago, a decent percentage of Hopkins undergrads came from Baltimore public schools, and that percentage has plummeted precipitously as Baltimore's fortunes declined.
I do understand your overall point, but it's Bloomberg's money, and it's his decision how to spend it. I'd also suspect he gives money to other causes, although perhaps not on this scale.
A large chunk of that money is subsidized by tax payers, as he would not keep the 1.8 Billion if he had bought a sports team or other vanity project that was not tax deductible.
I am not saying spending taxpayer money to promote giving is a bad idea, but it is an expensive one that’s generally forgotten about.
Perhaps it will eliminate his personal tax bill for 2018, but his yearly income is far less than $1.8B, and his tax bill is only a portion of his yearly income... the tax implications of this gift are only a small portion of the amount.
Even if he had 1.8 Billion in cash and ‘only’ got to deduct from his current tax bill that still means the US population is giving up money to support his cause.
Taxes are not about the government. They are a shared burden by tax payers and anyone paying less is increasing that burden for everyone else. The only way to reduce it is for the government to sped less money.
He would need to pay tax on the capital gains. We have no way of knowing what the stock's cost basis is.
For sake of example, let's say the $1.8B had a cost basis of $1B. In theory the tax bill would be $160M. While that's a decent chunk of change, I definitely wouldn't describe it as "a large chunk" of the $1.8B being "subsidized by tax payers".
Also keep in mind the ultra-wealthy have all sorts of tax avoidance schemes anyway, and regardless of what he spent this money on, he is likely paying a much lower taxation rate than you or I (or the example above). That's a separate topic though.
Also, I would call 0.16 billion a large chunk of 1.8Billion as it would drop that down to 1.64 billion.
Anyway I would not call a basis of 1B out of 1.8B a highly appreciated assets. If he wants to keep a more appreciated asset with a basis of say 1/2 or 1/10th it's current price as a better long term investment you can still do this. Donate the highly appreciated stock, sell some less appreciated stock and use the proceeds to buy the stock you want which now has a much higher basis.
Then if the stock you buy tanks you can at least take a deduction when you sell it.
We hand out money to people buying a Tesla Model S’s, or paying a mortgage payment. Agree or disagree with the idea, just understand it’s not free.
So, legally they are the same thing.
PS: Though with various caviots as the law is never that simple.
And what do you think the current difference in tax is?
Companies also get tax deductions. Should or should not is a different issue, but currently they do.
There’s a good article on unintended consequences here: https://en.m.wikipedia.org/wiki/Unintended_consequences A lot of debate in philanthropy policy deals with these, so it’s important to understand how someone can disagree with something no one has explicitly advocated for, but could happen if the advocated course is taken.
Sure, I get that it might have undesirable consequences, like creating a harmful habit or addiction, but also 'such a donation to a state school' would mean (obviously) a relatively poor school gets a lot of money, which seems to me a good thing. No?! It almost seems like people are saying....that all mega-donations should go to schools that already have lots of money. Which does seem going overboard a bit.
I could see trouble if a state school doesn’t effectively manage endowments and receives too much money to handle, but as long as proper governance exists elsewhere, I don’t see how concentrated donor influence could hurt the school more than the money would help, even if the money weren’t allocated as well as it could’ve been.
[1] https://news.harvard.edu/gazette/story/2018/03/the-personal-...
Also you probably need to factor in living allowance if supporting underprivileged and once you give a scholarship you're looking at a 3-6 year commitment to that person.
Plus if you want the scholarships to run in perpetuity you can only spend at a rate that keeps the endowment at certain payout rate that does not reduce its value + inflation
So at say 6% being spent a year, divided by $80k to cover tuition and living cost, average 4 year course commitment your looking at 338 new scholarships a year.
That whittles down fast doesn't it....
Had it been spread to low-cost universities and community colleges, those numbers could have easily been 10x. And wouldn't require the son of a farmer to relocate to one of the highest COL states in the US. Or a daughter from someone in Detroit (went back to find the details of that anecdote and got locked out from paywall).
This has been the standard for a while now. Why does higher edu charge more? Because they can!!!
The market has been injected with cheap money and relatively under qualified candidates. The edus make out. The lenders make out. The students loose. And the public is completely clueless as to why. Most actuallt believe more / even cheaper loans are the solution.
Partially true but there are many other reasons why. Personally, I always thought it was administrative bloat which in turn put higher costs on the students. A 2015 study[0] shows that the real culprit could be as simple as less state support per research institution.[1]
>more than half of core educational expenses at “public” 4-year universities are now funded through tuition, a private source of capital, they have effectively become subsidized private institutions.
[0] https://www.demos.org/publication/pulling-higher-ed-ladder-m...
[1] https://www.demos.org/sites/default/files/imce/Pulling%20Up%...
But that's still a "because they can" reason.
At the same time, as the father of a high school senior, you quickly find very few kids pay the sticker price.
Increase demand via cheap / easy student loans, as well as social "norms" and the cost of limited supply will increase.
The gov's role in edu prices and student debt is not different tthan the housing bubble. Same scam. Different market.
> Why do most such schools admit fewer students per capita than they did in 1950?
This is just one data point, but I'm a Hopkins alum, and the current freshman class is 30% larger than my freshman class was in 2001. That exceeds the growth rate of the US population over the same time period, although I'm not sure about the equivalent growth rate of college-freshman-aged population specifically.
Admissions growth requires new dorm construction, which typically involves a large donation for naming rights.
> Why are they so interested in discriminatory children-of-alumni admissions?
I think this effect is more pronounced in the Ivy League, partially due to the schools being much older. I only ever met a handful of legacy students at Hopkins.
Related to legacy admissions, from what I remember, the JHU alumni giving rate is a bit sub-par, which is a contributing factor to its endowment being smaller than peer schools'. There are even several cases of campus buildings going nameless for decades while awaiting a donor. One example, a building constructed in 1988 was called "New Engineering Building" until a donor was found in 2012. Another example, two dorms built in the early 80s are still called "Building A" and "Building B". (All the other dorms are named after alums...)
It's PC to say "everybody gets a degree." The reality is, that's a very expensive empty promise.
Yet, the fact is, knowing this, we as a culture continue to insist square pegs force themselves into round holes. Drugs use is up? Depression / mental illness is up? Perhaps we open our eyes (and minds) to helping young adults becomes something that's meaningful - and career worthy - to them instead of forcing them down a path they don't want to go.
The fact that a fair percentage of people end up __not__ working in their major 10 years down the road seems to be saying something as well.
Given where AI is headed the higher edu route is not going to improve. Yet BHO, who knows better, kept beating the "higher edu for all" drum.
Once you see people opting for the trades, then you will know they are getting proper compensation.
It's not being entitled to success, it's terror at being a complete and utter loser, because we spend eighteen years drumming "if you don't go to college you'll be dirt poor, live in a van down by the river, and flip burgers" in to their heads.
You're told constantly that if you don't go to college you're utter scum.
Of course, the implication that flipping burgers is shameful is something we should address. We might also consider telling kids about all the successful career paths that don't require college - if my kid were looking at US levels of student debt I'd be suggesting plumbing, metal fabrication, etc. like crazy. You don't need to go to college to learn CNC, and the debt incurred going to college can destroy your life and robs the world of a creative, risk-taking individual. How many people would be making great things or solving the big problems of our time but instead are doing bullshit jobs because they have an enormous mountain of debt?
No one should want their child to be buried in a six-figure debt. But the answer, at least on the median HN reader's salary, is to save and invest 4-5 figures over each of your child's 18 years. That is what universities will expect when deciding what to charge you, and what the government endorsed when creating tax-advantaged accounts for that purpose.
I guess you could say "Not fair!" but the families that do this outperform the ones that don't, by wider and wider margins, and that right there is "rising inequality."
Just a few years out, my parents' investment has paid off handsomely. They don't want it back. They want it paid forward to my own kids. Morality notwithstanding, this particular belief system seems to be a winning a strategy.
[0] https://www.statista.com/statistics/233301/median-household-...
I'm doing fine, and am not really worried about my kid affording college.
But too many of my friends are _not_ doing fine, and I have a strong suspicion college was not a good ROI for them. The combination of :
* "You MUST do this to be a successful adult"
* "Oh btw it costs several years' worth of your future income"
* "But guess what! Here's a big pile of debt that you can never discharge no matter what" (aside from death and some very, very extreme tax circumstances)
* "And because we're responsible adults who care about the next generation we made sure you attended horrible schools through your youth and have no cultural appreciation for mathematics giving you none of the tools you'd need to accurately determine if this is a good decision"
Finally, as covered in Duckworth's book "Grit" brains / education isn't the key.
They are entitled in the sense they insist on going to some overly expensive exotic school to get that degree, because a state school isn't good for their ego. Because dad said I can do whatever I want with my life.
They are entitled in the sense they make these decisions without any sense of the debt they're going to take on. I hate to sound blunt but if you can't figure out (e.g.) 100k in debt isn't easy when you make 35k y/p (and insist on an apt with all mod cons, a new car, etc.) then perhaps you're not yet college material.
True story: I recently suggested to an average academic HS senior that he consider a year at the local community college to get the ball rolling. I explained he could transfer. I explained first year courses didn't matter. I explained it would save a __ton__ of money. I don't think he heard anything I said.
Thanks for raising these issues, as a well-evidenced contrast to the "usual" complaint that our society provides too much access to higher education.
I largely agree with your analysis. The question isn't too much or too little. It's: who gets how much of what? If some students are deprived of vocational opportunities while others are stuck in understaffed, lower-tier institutions than their abilities warrant, society is leaving productivity and human well-being on the table in both cases.
I think he outlined his own thinking pretty well. He wants elite colleges to stay as they are now, but more meritocratic in their admissions. Same elite institution, but with students from lower income backgrounds.
It's obviously an establishment-oriented donation, not a "radically transform education" idea or an "effective altruism" oriented idea. He explains his own thinking pretty clearly.
I don't think there's any doubt that I think he outline his own thinking pretty well. He wants elite colleges to stay as they are now, but more meritocratic in their admissions. Same elite institution, students from lower income backgrounds.
It's an establishment-oriented donation, not a startup idea. He explains it pretty clearly.
Together, the federal and state governments should make a new commitment to improving access to college and reducing the often prohibitive burdens debt places on so many students and families.
There may be no better investment that we can make in the future of the American dream — and the promise of equal opportunity for all.
At the moment, zero incentivizes colleges to reduce costs. If they can get a student in the door, the federal government will ensure that student loans are available and that the college gets paid no matter what happens to the student. Regulators, in the meantime, work hard to ensure that colleges and especially universities face little competition.
So we get an array of problems: we are all, in a way, paying for the party: https://jakeseliger.com/2014/04/27/paying-for-the-party-eliz.... Already prestigious schools like Hopkins compete primarily to raise their own prestige, rather than improve access. Why do most such schools admit fewer students per capita than they did in 1950? Why are they so interested in discriminatory children-of-alumni admissions?
While I don't want to look a gift horse in the mouth, I've been involved in post-secondary education for too long, and read too many books on it (Tyler Cowen's The Great Stagnation is recommended, as is his book The Complacent Class), to think that "more money, same system" is the answer. We need comprehensive, systemic reform, starting with the accreditation bodies, before we pour more money in.