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Income Inequality Between Private Universities

Rather than reducing income inequality and providing access to the same opportunities, higher education seems to be maintaining, the status quo.

Anyone who has attended a University in the last decade has been aware of the skyrocketing costs of tuition.  For me, the small increases on my tuition statement every quarter, combined with the occasional obligatory (and often poorly attended) student strike in protest became a normal part of my academic landscape. However, I have realized that the world of higher education is highly complex, and very parallel to the struggles of the collective student body.

closing school

Two recent stories show that this struggle is played out not just between students, but between universities as well, especially private schools. With the recession, small private schools with less access to resources are at higher risk of closing. These are schools that struggle with funding, as they often do not receive the massive donations that larger schools do, and have to rely only on student fees to survive. In turn, they are less able to provide amenities and the level of quality necessary to draw in a healthy student body in a competitive student landscape.

However, this is not endemic of the greater higher education industry suffering as a whole. One of the latest scandals in the field was the news that NYU was giving its “stars” housing loans and other enormous monetary benefits to keep them at the school.  This has caused outrage, since NYU is one of the most expensive institutions in the US to attend, and its students have been leaving with startling amounts of debt.  When its faculty and other academic assets are being paid massive bonuses, and its president makes 7 figures, the news of this further fiscal abuse is truly disheartening. Clearly NYU isn’t raising tuition costs in order to survive like smaller private schools. They are doing it because they can.

So, what do these stories tell us? They tell us that the same trends that maintain income inequality between students even after attending a university are endemic on a higher level. These trends are apparent in the private sector of higher education as a whole from school to school.  What is even more distressing, is private universities such as NYU and its small, failing brethren, are non-profits. We expect the for-profit education industry (which accounts for a full fifth of college students) to financially exploit students. What we don’t expect is that a famous non-profit private school, which receives substantial donations, would land its students with a huge financial burden in order to fund second homes for famous faculty.

This is a time where more Americans are earning degrees than ever, and the changing nature of jobs means that applicants need more specialized training than before. Access to higher education, is becoming more of a necessity, and is still the best chance at reducing income inequality. Something so necessary shouldn’t be a game to play with bank accounts.

What becomes clear is that the rapidly rising tuition rates is making students, and smaller private schools poorer, and is an opening for large, dominant schools to pad their pockets. When institutions of higher education think only about money, it is the students who suffer, especially those who need it the most.  It is time for things to change.

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