Power and Politics - I am Not the Yellow Peril

The life and times of an Asian American activist who tells all the truth (and dishes news and analysis) but with a leftwards slant.

Saturday, December 29, 2007

Harvard Redefines the Middle Class

I am all in support of Harvard's initiatives to replace loans with grants for students from middle class families (they made that mark for families making $60,000 and under.) I think it absolutely lifts the burden on families who really can't afford the cost of paying $45,000 or more per year, since that would be 75% of their pre-tax incomes. That was a game-changer that led to other elite institutions revising their financial aid for middle class families, and many of those schools couldn't even afford to do it for families up to the $60,000 mark (which when I was growing up was considered borderline upper-middle class.) I was also hugely in favor of their elimination of early action, which has been gamed to benefits those who have the tutors and college counselors and teachers all lined up to drop one finely-tuned application package by D-Day. It was all escalating into some bizarro Cold War. I heard of kids applying to 26 schools via Early Action. (Yeah, and I'm definitely laying some of the blame on you model minority types - you know who you are.)

Now Harvard has pioneered another financial aid move (Harvard announces sweeping middle-income initiative) whereby they significantly expand financial aid to families making as much as $180,000 a year.
The “Zero to 10 Percent Standard”: Harvard’s new financial aid policy dramatically reduces the amount families with incomes below $180,000 will be expected to pay. Families with incomes above $120,000 and below $180,000 and with assets typical for these income levels will be asked to pay 10 percent of their incomes.
'Scuse me?!?!? $180,000 a year doesn't put you in the middle class. It makes you rich. I'm sorry, I could have sworn that families who make $180,000 qualify as the top 5% of households in this country.

And according to the 2005-2006 US Census, they do.

Household income distribution
Bottom 10% Bottom 20% Bottom 25% Middle 33% Middle 20% Top 25% Top 20% Top 5% Top 1.5% Top 1%
$0 to $10,500 $0 to $18,500 $0 to $22,500 $30,000 to $62,500 $35,000 to $55,000 $77,500 and up $92,000 and up $167,000 and up $250,000 and up $350,000 and up
SOURCE: US Census Bureau, 2006; income statistics for the year 2005

Part of the reason that this is even controversial is because nowadays, everybody feels like they belong to the middle class. According to a 2004 PBS Special "Who is the Middle Class?" (that's right, we all feel squeezed so we need a news organization to tell us.)
[T]he Census Bureau shows the middle 20% of the country earning between $40,000 and $95,000 annually. The Drum Major Institute for Public Policy, a non-partisan and non-profit organization, reports that the middle class has conventionally come to mean families with incomes between $25,000 and $100,000 each year.

But if you ask the American people, you'll get yet another response. According to statistics from the National Opinion Research Center, as reported by Baker, large numbers of American define themselves as "working class" or "middle class," including:

  • 50% of those families who earn between $20,000 and $40,000 annually
  • 38% of those families who earn between $40,000 and $60,000 annually
  • 16.8% of those families who earn over $110,000 annually
Here's the thing - I think Harvard is doing exactly the right thing in terms of no loans, and I applaud what they did with middle income families. But when you extend financial aid to families who even make beyond $200,000, as their press release states, then I think that there is something seriously weird going on. It's one thing when you have a family who makes $100,000 and they have 3 kids in college - it's definitely a stretch to afford all of that when college even at state schools is considered a bargain for $30,000 a year. I highly endorse taking all of that into account, or if people are making $150,000 a year but they have to pay $100,000 to the HMO because Mom has cancer, but that's no reason to create a broad policy where you give rich people financial aid. FINANCIAL AID IS SUPPOSED TO LEVEL, NOT DESTROY, THE PLAYING FIELD.

And I think Harvard is erasing all the good it did with its initial $40,000 bar which was raised to $60,000 last year by tripling the financial aid floor to $180,000 since it will effectively crowd out all the actually middle and lower class students.

The New York Times story, Harvard’s Aid to Middle Class Pressures Rivals, raises this possibility but buries it toward the middle (and repeat after me: $100k and above is upper middle class, if not upper class):

Some administrators say there will now be pressure to provide more merit aid to relatively wealthy high achievers, reducing the amount available to poorer students.

“It could lead to schools’ doing this sort of thing because they want to be part of the top group,” David W. Oxtoby, president of Pomona College in California, said of Harvard’s move. If that meant those colleges had to reduce the number of their low-income students, Dr. Oxtoby said, “that would be terrible, exactly the wrong outcome.” (Pomona itself, where full costs are more than $45,000, does not provide merit aid.)

Some academics who study higher education predict that Harvard’s decision may even reduce economic diversity at Harvard itself, even though the university already allows any admitted student from a family earning $60,000 or less to attend virtually free of charge.

Donald E. Heller, director of the Center for the Study of Higher Education at Pennsylvania State University, said that if Harvard’s new aid program encouraged more middle- and upper-middle-income students to apply, then the number of slots for low-income applicants in an entering class would probably decline.

“They’re just going to get crowded out,” Dr. Heller said.

Even the schools that consider themselves top tier who also have endowments of over $1 Billion are going to find themselves hard-pressed to follow suit. (And the list of schools that could and did adopt no loans for ACTUAL middle class families is pretty small - Yale, Princeton, University of Pennsylvania, Amherst, Swarthmore, Williams) So basically Harvard did some good for lower income and middle income folks, which they are erasing now by extending financial aid to rich people. It makes a mockery of financial aid - maybe this is what the neo-conservatives were hoping for all along, to be able to say, "Look at Harvard, they're giving welfare to the academic equivalent of welfare queens."

I am a pretty bleeding heart liberal. I cry for the oppressed and I fight for those who don't always have the ability to speak up for themselves. But our country is pretty fucked up if rich people are seriously having this hard of a time paying for their kids' college education. And if that's the case, cry me a fucking river. Because I grew up in an ACTUAL middle class family, and I STILL have student loans. Ideally, no one would have student loans, and my super smart friends wouldn't be working on Wall St or in miserable lawyer jobs, but if your family has close to $200,000 a year, you should pay your fucking share. Because you are NOT middle class, and don't even fool yourself. It makes a mockery of people who work 2 or 3 jobs or 80 hours a week just to come up with $25,000 a year to say that people who make 7 times as much are also included in the same category, and it downplays the trend of the shrinking middle class which is unfortunately picking up steam under the Bush administration. So where is Harvard's financial aid expansion going to stop? Is it going to start giving alms to families making $300,000 a year?!? What about those unfortunate souls who only make a cool half mil?

Next we should just start shoveling it out to the pretentious twits like Kelly Tripplehorn at tripplehorny@hotmail.com, and this guy I knew in college whose parents ran an international restaurant biz who declared himself "independent" of his parents' vast wealth so that he could get financial aid. Meanwhile I knew this other guy who is now in the Army, who had grown up an orphan, and actually didn't have any family who was receiving decent financial aid. So let's see, who is ACTUALLY deserving in this situation?!?

I mean, one of these days, I hope to be in the $120,000-$180,000 household salary range. And I will probably say this while sipping tea out of my finest china with a crooked pinkie finger, "Oh, but my money doesn't go far enough. I have this nice car and that nice car, and well, little Johnny absolutely must maintain his oboe, Latin, and fencing lessons, not to mention we have to keep him well-rounded by going on several vacations to different Third World countries every year. It keeps him modest, doncha know? Keeps the lil' brat grateful for what he has. And we need to maintain our country club membership and the pied a tierre in Paris. I just can't fathom paying even a tenth of our income so that lil' Johnny can get a fine education, even though if I would just cut back on my ladies' luncheons or my tickets to the Opera, we would be fine. Plus I really can't allow Mitzy to outdo me at the Black and White Charity Auction. It would just cast such a pallor on my philanthropic year and the girls would just stop inviting me over for high tea, and we can't have that, can we?"

Of course, the amount that is considered middle class by that time will probably be $300,000 and I will only be lower middle class, even though the 50th percentile of people in America will probably be making much less than the current median of $45,000. Because all the people who are in the know and are decision and taste-makers will just look down on their friends who are only making $180,000. And I invite my friends to break my currently non-existent but soon to be future Limoges china over my head if I ever talk like that.
For some public universities, Harvard’s move provided a rationale to argue for more state assistance to hold the line on student costs. Robert J. Birgeneau, chancellor of the University of California, Berkeley, where total costs are roughly $25,000, said, “My intention, frankly, is to use the Harvard announcement to try to exert pressure on the government of California to increase resources for financial aid.”
And it's true that this will cause a shift in fin aid resources for other schools. Just as Harvard shifted the paradigm toward educational justice, now it shifts it toward insanity. This IS the new Cold War of college tuition. And this move will benefit a very tiny slice of the upper class families who it pertains to, since most colleges aren't going to have the means to do this. But it will broadly impact everyone negatively.
Nearly half of all college-qualified low- and middle-income students will not go to a four-year college because of financial barriers. Of that group, 42% will not go to college at all, according to a June 2002 report by the Advisory Committee on Student Financial Assistance, which advises Congress.

. . . As grant money covers an ever-smaller portion of costs, the temptation for colleges is to serve fewer poor students. That's because public colleges need to keep up their enrollment to gain state funding. And they can enroll several middle- to upper-middle class students with the same amount of financial aid they might have to provide to just one lower-income student.

"It takes less to attract the students further up the income scale, so it's a pretty smart deal for the college," said Jerry Davis, vice president of research for the Lumina Foundation.

At UW-Madison, the percentage of students who came from families in the top income quintile, meaning they are wealthier than four-fifths of all families, has risen from 30.6% of students in 1990 to 38.4% today. (Milwaukee Journal-Sentinel)

So instead of using their bully pulpit and $35B endowment to help the middle class broadly (for example by making public universities more affordable), Harvard is going to make one of the most elitist (and elite) institutions in the country more affordable for rich people and be able to take their pick of the cream of the crop at all income levels. They want to be able to skim off of the Talented Tenth and let everybody else get screwed. It's so stereotypically white liberal guilt - to throw some money at the problem, be able to surround yourself with handpicked tokens, and then to claim that you're doing something about the "problem." Is it any wonder that while Harvard fiddles with its checkbook, the city below the Ivory Tower burns? Fuck that. I don't buy into this framing of $180,000 household incomes as being "middle class" because that ain't reality.

I haven't read something that is so patently ridiculous in awhile. Because the folks over at Harvard and the New York Times certainly live in bubbles if they consider $120,000-$180,000 "middle class." And it makes me glad that John Edwards is talking about the Two Americas and the shrinking middle class this election. Talk about shrinking the middle class, they are not just single handedly redefining it, they are making it invisible. Soon colleges will forget that there are even families who make under $60,000 much less $25,000.

It's just a matter of time.

[Edited from yesterday to include more ranting.]

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