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[dupe] Billionaire’s Guide to Buying Your Kids a Better Shot at Elite Colleges (propublica.org)
57 points by gopi 15 days ago | hide | past | web | favorite | 80 comments



Previous discussion 1 day ago of the same article, co-published nymag version: https://news.ycombinator.com/item?id=21103345


Right you are. We missed that one. Thanks!


Here’s a family that donated $37 million to a half dozen schools over several years, ostensibly to increase the odds of his [well qualified] children to be accepted into one or more of those schools.

Personally, I think if someone wants to pay the way of, let’s say, 300 students to get full scholarships, so that their child can attend, this seems like a very sustainable model which benefits everyone involved.

$37 million buys a lot of resources so arguably this isn’t taking a spot away from anyone, if anything it is enabling these universities to provide more spots to students who deserve them, potentially at zero cost.


I generally agree with your comment, but it's worth nothing that despite the US population increasing and the number of kids attenting college increasing even more the top schools have generally not increased enrollment sizes much at all.

It's interesting to think about why this might be so.


>> US population increasing and the number of kids attenting college increasing even more the top schools have generally not increased enrollment sizes much at all.

Also, while they used to serve almost exclusively US students they now accept students from all over the world, making the chances of an average child getting in more remote. My father got into Stanford a long time ago when you could be a local kid at public schools with nothing distinguishing you but good grades and test scores. Now to replicate that feat you need an athletic scholarship, or an amazing personal story, a legacy, or a huge donation.

I believe this will begin to erode the concept of elite schools truly representing the most capable. In a previous job we sometimes found that kids who were coming from a good public engineering program were often more skilled at actually writing code than people from some fancy ivy league schools. The fancy schools turned out graduates who were usually smart and very polished. But they didn't necessarily have more of the skills we were looking for.

The life experience of DE Shaw himself makes you wonder why he why he values an Ivy League school so much. His biography demonstrates it is not the skills. It is the access and the pedigree.


If you're sitting on a minimum of $3.5B in endowment (Brown), up to $34.5B (Harvard), why would you need to expand? Besides, being "elite" is part of the brand. Start letting everyone in, and the Ivy League becomes just another football conference.


> being "elite" is part of the brand.

Exactly. And what public policy needs to do is revoke the non-profit status of schools that fail to make any effort to expand despite having an abundance of resources and qualified candidates.

Harvard could easily accommodate 20,000 undergrads given the size and quality of its applicant pool. That fact that it doesn't spend a penny of its $30 billion endowment doing so reveals that its mission is brand management, not education. And that's perfectly fine. But it shouldn't enjoy a tax-advantaged status predicated on the make-believe that its a philanthropic organization.


> Harvard could easily accommodate 20,000 undergrads given the size and quality of its applicant pool.

Increasing the class size would be good.

But Danny Rubin isn't going to be able to teach screen writing to 120 kids instead of 12, even if he actually wanted to. RJ Tarrant can't expand his personal Classics section beyond 15.

And the undergraduate animal transplant surgery class (12-15 students)? How, pray tell, will that scale? If you wanted to 10x the size of the class... I don't know if there's a single place on Earth that conducts 10 transplants, human or large animal, in one building, at the same time.

Not everything can be scaled. Not even "not scalable" things can be scaled with money, even a lot of it.

A more interesting conversation is why nonetheless billionaires do a bad job at education, despite (not because of) all the money. I think this thinking is part of it. It also shows a lack of understanding of what makes Harvard special. It's not just "brand management."


Do you know how coveted any tenured faculty position is? Anywhere, let alone at Harvard?

Harvard could dectuple the number of faculty positions, and still turn away a dozen promising qualified academics for every position it fills.

I didn't go to Harvard, but I did attend a comparable fancy lad finishing school. The notion that there's any sort of magic compared to, say, Texas A&M doesn't hold up to scrutiny. The real difference is that the reputational capital of an Ivy League school. Which means that a bunch of impressive people will bend over backwards to become associated with the school.

Which in turn makes the institution itself prestigious. Which then attracts the next-generation of impressive people. Like a social status perpetual motion machine.


Exactly. The only path forward to preserve the essence of America is to grind the gears to a halt


You wouldn't complain if NCSU had this reputation. You're just saying this because you didn't get into those elite schools. "Bring them down". Move on.

The solution is simple: hire more faculty, build more and taller buildings. Build more dorms. They can afford it. And if their mission was education, they would do it.


Agreed. To do this correctly would take long term planning on the scale of decades most likely; growing the faculty from within and providing the necesarry resources to develop them. But it is possible and the elite universities should be moving this way.


For Harvard and the rest of the Ivy League, "growing the faculty from within" really means "actually granting non-world famous people tenue." The Ivys are notorious for not granting tenure to people who come up through the ranks.


You can’t just hire more top talent. “Elite” is “best”, not “more”.


The academic job market is so tight in most fields that random universities in the middle of nowhere get hundreds of applicants for a single tenure-track job. If you go back 100 years ago you would find that Harvard was a lot less selective (there were far fewer academics), but it was still elite.

Overall, society isn't putting enough money into research. Elite universities hiring more faculty would be a great thing, in my estimation.


You absolutely can hire more top talent.


The US also gives nonprofit status to organizations that do stuff like buy expensive paintings and build megachurches. There's no general requirement that the nonprofits need to be using their money in the highest-utility manner. If such a requirement existed, I don't think elite universities should be the first organizations to crack down on.


Where do you expect Harvard could house the additional 13K undergrads near campus? I live walking distance to Harvard campus and I can tell you that I can't imagine a good answer.

(Unstated above is that I believe that undergrad is fundamentally an in-person experience.)


Satellite campus?

Buy up existing hotels?

The George Washington University has purchased many hotels and condos and converted them to student housing, and that is downtown DC real estate.

Works well when you pay no property taxes.


Doesn't Harvard own a bunch of prime real estate? Tax free, even. How tall is the average building on that land?


> And that's perfectly fine.

Under capitalism. :)


Endowments really need to go. Put that towards paying for student's education instead of locking it up.


If endowments go, so do good professors. My wife was recruited by a couple institutions last year. One of our key concerns about one institution was the endowment. Tenure is not nearly as valuable at a institution that is not on strong financial footing.


Why are endowments so important for Professors? They're not seeing a dime from that anyway.


If a university has a strong endowment, it provides assurance that the operating budget will be buffered against economic downturns. If universities did away with endowments (and did not replace them with mind-boggling amounts of insurance), it would increase the chance that professors' jobs and/or salaries would be at risk. Unlike most jobs, academic positions can last for half a century, so it is reasonable to look far into the future when assessing the desirability of a particular position.


Theoretically, endowments are _supposed_ to be paying for students’ education.


I think it's because high end education is hard to scale. I've yet to see an alternative to small class and 1-1 teaching (office hours) that reliably produces as good results.

So if it's hard to fit in more students per professor, then the issue becomes finding more teachers. I suspect that might be more of a bureaucratic/political issue. Research and teaching are conflated, putting teaching at the bottom of the totem pole and pay scale for most aspiring professors unless you're famous for being good at teaching.

Maybe there should be more dedicated teaching openings.


They have not increased enrollment but they have massively increased financial aid.


Financial engineering. They set the prices which they pay themselves to appear philanthropic.


It's hard to scale up individual institutions and maintain quality.

What needs to happen is a broadening of the definition of "top schools".

The issue is that a "top school" is a definition inherently limited in size. The top 10 is the top 10 regardless of whether there are 100 or 1000 schools being considered. Also, regardless of how many people there are, as an entire society we can only agree on a group so large before the "top schools" are no longer actually common knowledge (and thus not a "top school" in many important ways).


UCLA is both a much larger and much more highly rated school than it was thirty years ago.


Only solution I see is reducing their influence as much as possible.


> Personally, I think if someone wants to pay the way of, let’s say, 300 students to get full scholarships, so that their child can attend, this seems like a very sustainable model which benefits everyone involved.

> $37 million buys a lot of resources so arguably this isn’t taking a spot away from anyone, if anything it is enabling these universities to provide more spots to students who deserve them, potentially at zero cost.

This is very speculative. His children getting admitted to these schools might very well take away a spot from someone else unless they would be admitted anyway or the numbers of admitted students increase. This discussion is a fascinating read, arguments from all directions rationalizing this behavior and somehow making it work within our social contract.


That would be fine if everyone accepted due to donations, athletics, legacy, etc had an asterisk on their diploma. What I find grating is they get to hide among people with no advantage.

It weakens the signal of having gotten into a top institution.


Or maybe it strengthens the signal of people who've gotten into elite schools on their own, because our meritocracy has never really been fully about merit.


Harvard could provide free tuition to all its students for the next 400 years if it felt like it, based on the size of its current endowment, so it's hard to believe a few million extra is providing a spot to someone deserving who otherwise wouldn't get one.


That follows if one person has their way in bought. It doesn't when more then 1/300th of the class does, and that would be 6 or 7 students at Harvard.


Agreed; unfortunately, the schools getting this money already have more than they can possibly spend.


I'm not familiar first-hand with the concept of "elite" colleges in America, but why is it so important for a billionaire's kid to attend them? Does it really give them opportunities that are not already available to them from their parents' wealth and connections?

I don't understand how sending your child to those institutions is worth $37 million. Wouldn't it make more sense to give it to them directly, or as funding for one of their ventures?

From other articles, their daughter became a comedy writer for Jimmy Fallon - that seems like the last profession to require a diploma from an elite university, or even a college diploma at all.


From what I've heard and seen of this man: He hires people who are fantastically smart -- literally best I've ever met in many cases. He pays them astronomically -- not just in finance, but also in his medical research thing, and he is committed to giving them the resources necessary to succeed. He thinks somewhat unconventionally -- that academia and business are too slow, and that a small number of super-talented people can be very very successful.

He's not known for blowing money ostentatiously -- never heard of his yacht/plane/private island/museum wing. Presumably he wants his kids to get the best education possible and to meet the most interesting people that they can, but I'm sure that he has absolutely no desire to give them enough money so that they can turn into the kind of billionaire brats that he detests.


Brilliant reply, in this case if his kid isn't able to get in on merit alone, paying a premium for the "privilege" to be surrounded by a mix of wealthy and/or incredibly intelligent people is entirely reasonable.


Top tier universities are where the elites go to find spouses.


And future business partners, investors, advisors, etc. etc.


Yes, from up here in Canada it is astounding to me how much the question "where did you go to college?" means to Americans. During socializing, during hiring, in professional life.

We have universities that are 'better' (for some definition) in various disciplines; but generally a degree from any university is considered good.

And it by no means determines or describes your class position in the same way it does just a couple hours south of me.


It's not all that important, and clearly their kids would have done fantastically even without an 'elite' University education. Hell, they could just drop that $37m into a trust fund and their kids would be set for life, without lifting another finger again, let alone going to college.

On the other hand, from their mentality, why NOT do what it takes to give them the best 'chance' to 'succeed'?


It's not like $37M is all they have, $37M is nothing to them, so why not? It's the price of prestige, it's the price to get the best damn education possible. Ask any parents, if it will give their children the slightest of advantages in life, parents will go out of their way to make it happen (especially if it's easy as spending money)


I guess, it may be that - you may want your children to be properly educated, and able to accomplish hard tasks (given at university) before handing them down businesses. Probably even working low-paid jobs for a while just to learn all the levels in the company.


But if you're buying their education anyway, does that really teach them the ability to accomplish hard tasks? I don't imagine the university being especially strict on the students whose parents gave very large donations.

I understand the value for an "ordinarily wealthy" individual, who is wealthy enough to give a bit to the university but does not have the sheer amount of connections that a super-wealthy one would have.


Yes.

“I paid $37M to get you into that position, I expect you will produce >$37M in results.”


> I don't understand how sending your child to those institutions is worth $37 million. Wouldn't it make more sense to give it to them directly, or as funding for one of their ventures?

$37 million on a net worth of $7.3 billion is barely a rounding error.


Total donations were something like $36 million, and by all accounts, kids were extremely smart and motivated. Honestly seems like a CYA move on behalf of his staff, and not any rational approach to bring his kids' way into a top school.


$36M doesn't even come close to what this guy is netting on his investments, I'm sure. Honestly, if I had kids going to college and spending $36M was something I could do without thinking about, I'd probably do it too, just in case.


I agree but then it' not like they're suffering. $37million is nothing to them--and they can say they donated to a good cause.


I have to admit as an average intelligence middle class health care worker I actually assumed the ultra rich 100% did pay for their way into university. WhenI saw the admission scandal break I was actually surprised that these rich people had to go out of their way to craft reasons for their kids to attend like fake sports scholarships and such. It was only after I was made to realize how their actions were illegal.


The people caught up in the Varsity Blues prosecution weren't rich-rich, like D.E. Shaw. They were merely Hollywood-rich, such that they could afford to pay a bribe equal to the price of a luxury car to bypass admissions.

Which is what the whole fuss is about-colleges would prefer to be bribed multiple millions by people like David Shaw for his kids, rather than a paltry few tens of thousands, like what the CT lawyer or Mrs. Half-the-voices-on-the-simpsons paid in bribes, the filthy plebes. The only people who should be able to corrupt the admissions process are the colleges themselves, and then only for amounts in excess of $1,000,000 paid by the gentry.

That the act of bribing one's way into a particular school is now a federal crime (the so-called "honest services fraud") is risible and out of the scope of what criminal law should concern itself with.


Bribing employees of a company to perform corrupt actions should obviously be criminal. It’s ridiculous to say that it shouldn’t.

Paying high prices above board and openly for services is not fraud or corruption, bribing an employee to break clear standards and policies at their work place absolutely is.


Clearly, the proper enforcement of your execution of your employer's code of conduct && your boss's instructions needs to be handled by police and prosecutors, paid out of tax dollars. I'm glad you live in a place so flush with cash, and so tranquil such that this looks like a good use of the time and money of the state.

OTOH, we could accept that no ratable harm has been done to the public at large, and that this comes down to a private dispute between the university, the bribee, and the briber, where the latter two could be sued by the former for negligence in performance and tortious interference respectively. Civil law provides remedies for this, what is possibly achieved by making it criminal?


Corrupt societies hurt everything they touch. Decriminalizing bribery, as you suggest, would help turn the USA into a stereotype of a third world country - where government officials and private businesses alike demand graft and bribes at every step of a business transaction.

Moving money like that is also, inter alia, going to corrupt the income tax system - if employees are receiving a significant percentage of their income through cash bribes from customers, it’s unlikely they’d report it properly on their income tax.

https://en.wikipedia.org/wiki/Commercial_bribery

These laws seem quite reasonable to me. Do you also believe an employee stealing or embezzling funds from their employer should be a civil, not criminal matter?

Edit: to add, some of the colleges in the admissions scandal were public, not private colleges - USC and UCLA. So bribery of the officials in that case was bribery of an employee of the state, not just a private business. It should be obvious that legalizing bribery of state employees is a very dangerous path to go down.


Corrupt societies hurt everything they touch. Decriminalizing bribery, as you suggest, would help turn the USA into a stereotype of a third world country - where government officials and private businesses alike demand graft and bribes at every step of a business transaction.

No low-trust society ever legislated its way into becoming a high-trust society. I remember America before the "honest services mail fraud" statute was in place, and contra your assertion, 1987 America didn't resemble a third world corruptocracy anymore than it does today.

if employees are receiving a significant percentage of their income through cash bribes from customers, it’s unlikely they’d report it properly on their income tax.

s/bribes/payments/ ...this is a risk you run by allowing cash. Of course, the risks of not having cash as a method of payment are different, and in my thinking more substantial.

Do you also believe an employee stealing or embezzling funds from their employer should be a civil, not criminal matter?

Of course! While we're at it, I also believe that tax fraud is a criminal offense. Note that none of these need the contrivance of honest service fraud to have been well prosecuted in the past, nor should they need the federal prosecutor's favorite GOTOs of mail & wire fraud to secure a true bill from a grand jury.

Edit: to add, some of the colleges in the admissions scandal were public, not private colleges - USC and UCLA. So bribery of the officials in that case was bribery of an employee of the state, not just a private business. It should be obvious that legalizing bribery of state employees is a very dangerous path to go down.

So...any state employee? I mean, bribing elected officials and officers of the court is already illegal; I really don't lump college admissions officers (or college garbagemen, lifeguards, sysadmins, psychiatrists) into the group of people the corruption of whose duty is so serious as to merit prosecution in federal courts, simply by dint of where they get their paycheck from.


The scandal was actually interesting because it showed the gulf between "rich" and "ultra-rich". The ultra-rich have always been able to buy their kids' way into college with 8-digit donations for new buildings; that's so obvious it's hardly even a secret. It's the merely-kinda-rich, who can't throw around that kind of money, who have to resort to the fake scholarships and so on.

Which makes it kind of difficult to feel bad for the colleges who were supposedly the "victim" of these scams: they have no problem with bribery, they were just complaining that they didn't get their cut.


Even the rich can donate to the college and have a good chance of getting their kids in. The problem in the admissions scandal was simply that the money wasn't going to the college (which would nominally benefit the whole student body); instead it went into the pocket of an individual.


I believe the reason it became a huge scandal was because, the money that was used for the purchase wasnt given to the university rather than accomplice's pocket. Thus, not providing further opporunities for the needy. And for you to legally purchase a seat in those universities, it was gonna cost them much higher price tag.


Same - I assumed donate over x and your kids get accepted. It turns out that x is exceptionally higher than I thought.


breaking: world's worst kept secret exposed


I can see a top school accepting billionaires' kids by default, simply because of the prestige it confers on the school.


If rich people want to buy their way into university, why not? I think the argument is really:

1. Arbitrarily small class sizes - the degree is not so much about the education as it is about the prestige of being in small class size. But long term, who cares? There are obviously candidates that have equal or higher capability if the universities can limit the class size. Besides those that don't go have cheaper market rates and are more attractive investments since the universities strategy is pretty much increase the demand by lowering supply arbitrarily.

2. The idea that you buy merit that is undeserved. To be honest, I am not sure why this is a big deal. Its not in the universities long term best interest to give its clients undeserved merit, because the market decides their merit, and if they pump out people that don't have skills over time their "Prestige" doesn't amount to much, and their customers will go elsewhere. To be honest, I think this is already starting to be the case.

Really I think this argument boils down to distasteful envy and jealousy of the things rich people can "buy", which if you examine it carefully isn't the case anyway.


Agreed. The reason people want to go to the big famous universities is largely because Wealthy people have donated a lot of money so it has a lot of resources. If you stop them donating, it would just be another school and you probably wouldn't want to go to.


> if they pump out people that don't have skills over time their "Prestige" doesn't amount to much

I think you're underestimating the degree to which corrupt, inept institutions can maintain their influence over society.


No doubt, but I think the point is to ask the right questions. Its not so much about preventing the inept institutions from maintaining their influence so much its about making sure that competing institutions don't have arbitrary barriers to entry that prevent them from competing in the market, even if initially, people are skeptical of them in comparison to "established" players.


This is the most american way to think about education.

This anti-social thinking is why the USA is not going to fix any problem in a meaningful and lasting way.


If there was perfect price discrimination in elite universities, in other words, if schools were able to charge everyone the exact maximum they are willing to pay, then only the rich would go to elite universities. There is far more demand than open seats.


They could price discriminate if they wanted to, the fact that they wouldn't (In ways they already do) I think illustrates that they intuitively understand that in the long run doing so wouldn't be a profit maximizing strategy.


Number 2 is a kind of efficiency argument that requires backing with evidence. Is it really the case that the market can adjust for your true merit irrespective of what you've bought?

Sounds like one of those college essay questions.


I think people should understand how this contributes to the general apathy regarding college tuition and other inequalities.

The people with the most influence have so many intertwined unspoken relationships that there is no benefit to addressing whatever the underclass is talking about.

Coupled with the idea that many of their own children aren't even aware of what level of skill they demonstrated versus their family's money and clout. Many of them are oblivious to what other people struggle with, even if they are able to apply themselves in the same ways.


> Shaw has been said to purchase tickets for several different flights on the same day in case his plans change.

Hard to reconcile that with David not choosing to fly private. Maybe he has environmental concerns, but I would guess he exclusively flies private, especially since this article claims he's a little OCD about controlling every part of every process.

With regards to "buying" his kids' way into college, it doesn't look like there's any evidence that this was David's goal other than coincidental timing. But beyond that, David doesn't need to buy his kids' way into these colleges. Colleges love to accept the children of billionaires. Nothing is better than linking up an intellectual class with the wealthy class, and letting the melding of capital and innovation create powerful and successful alumni.


I recall talking to the chair of special gifts at an elite institution, and him lamenting that the school had rejected the children of multiple billionaires, making his life much harder.

Brown traditionally let a few parents buy their kids a spot, but most other Ivy League places can find enough highly qualified kids who happen to be offspring of rich parents to not worry much.


Yale is pretty famous for pay to play - it also turns out to be where two of Shaw's kids ended up going, and Harvard let in Kushner


Never heard of the p2p reputation at Yale. May be true, but have never seen it. My understanding is that it would only help if the kids weren't going to get in on their own merits, and by all accounts, this was not an issue. It is a signalling mechanism that they are going to pay full price or more, but I see no evidence that they bought their way in.

Kushner offered a lot more than a million a year, and had a politically connected father and it was a generation ago.


Kushner graduated Harvard in 2003. That wasn't a generation ago.




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