FAIR MONEY

Face to Face with Inequality


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How Exactly Do Colleges Allocate Their Financial Aid? They Won’t Say.

An article written by Marian Wang on Pro Publica poses the sticky question in the title above. To receive financial aid, a student and their family must undergo a thorough investigation into their financial lives. To quote from the article:

Many universities have access to comprehensive financial profiles, sometimes down to the type of cars a family drives. Some analyze patterns and interpret even the most subtle indicators from students, such as the order in which schools are listed on the federal financial-aid application, or even how long a student stays on the phone with an admissions officer.

However, information transfer is not a two-way street. Universities, even the most charitable, generally consider the metrics used to offer financial aid packages to be in the same category as state secrets. Again from the article:

Take Newman University, a Catholic liberal-arts college based in Kansas.

What are the actual criteria the college uses to determine who gets aid and how much?  “That’s proprietary information,” said Pam Johnson, Newman’s interim dean of admissions and financial aid. “It’s part of our competitive strategy.”

The full article is well worth your time.

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The Spirit of Indenture

Jeffrey Williams, a professor of English and literary and cultural studies at Carnegie Mellon, compares student loan debt to indentured servitude. Here’s the pith of his argument:

“the growth in debt has ushered in a system of bondage similar in practical terms, as well as in principle, to indentured servitude. The analogy to indenture might seem exaggerated but actually has a great deal of resonance. Student debt binds individuals for a significant part of their future work lives. It encumbers job and life choices, and it permeates everyday experience with concern over the monthly chit. It also takes a page from indenture in the extensive brokerage system it has bred, from which more than four thousand banks take profit (even when the loans originate with the federal government, they are still serviced by banks, and banks service an escalating number of private loans).”

It struck me how we would be reflexively outraged by 17th-century forms of indentured servitude, but we are pretty accustomed to modern versions of it, to the point of having to work at seeing it clearly.

A summary of Williams’ argument is available for free, while the full article is harder to lay hands on.