How Much Does It Cost To Buy Your Kid’s Way Into The Best Private Universities?

number-2-pencil-300x225As a pro public school guy, my ears always perk up every time friends talk about choosing private high schools and colleges for their kids in San Francisco. Like many large cities in America, San Francisco faces the same dichotomy of a deteriorating public school system that is a result of years of underfunding and a rising private school system that is difficult to gain admission to due to an undersupply of positions.

The only solution is to raise taxes to raise salaries to attract even better public school teachers. We just aren’t paying our educators enough, and that’s a travesty. The biggest irony in large cities like Manhattan and San Francisco is that those who pay the most taxes are homeowners, yet many homeowners send their children to private schools. If we can better focus on raising taxes on people who use the services, we’d have a much stronger system. But logic never wins when it comes to politics, power, and greed.

I’ve always heard about wealthy parents buying their kid’s way into the best schools, but I never got exact dollar amounts until recently. Clearly every parent wants what’s best for their kids, hence tuition’s inelasticity no matter how much people complain. Education is the key to reducing the wealth gap.

The following conversations were had at a bar after an afternoon of tennis at a private club. Please keep them between you and me. I am dirt poor compared to these guys, but at least I can kick their asses on the court. They are the top 0.1% income earners, which is a world of difference from even the top 1%. Hopefully you’ll keep an open mind when reading this post and come up with some solutions!

THE HIDDEN PRICE OF AN OUTSTANDING EDUCATION

It first needs to be pointed out that it’s much easier to buy your way into a private institution vs. a public institution. It’s the same way publicly traded companies are much more scrutinized by regulators than privately held companies. If some parent wants to donate a new library wing, then by all means the private school will take their money and give little Johnny a nod. Public schools are much stricter in this regard.

Parent #1 – Wife Of Multi-Millionaire Hedge Fund Manager

The first example comes from a mother who point blankly asked an admissions officer from Northwestern University (private) how much it would take for her middle school son to get in. Talk about planning ahead! The response from the admissions officer was, “$250,000 a year for five years.” This is on top of the $60,000 a year in tuition, room, and board. In other words, the total cost to get into this Top 10 private university is roughly $1.5 million dollars.

The mother wasn’t really down with paying such extras, but her husband is. She would rather have her children go to a school that they feel like they’d enjoy the most. Her husband, on the other hand, went to a prestigious university and believes if they can get their kids into the best university possible, then it behooves them to spend whatever it takes to make it happen.

Parent #2 – Family Is Worth Over A Billion

The second example comes from a friend whose family is worth north of $1 billion dollars. When I asked him how much it would take for one of his kids to get into a Harvard, he mentioned “$600,000 – $1 million” to which I replied, “That’s it?” You’ve got to understand $1 million dollars is 1/1000th of his net worth, or only $1,000 for someone who is worth $1 million dollars. He probably earns at least $30 million in interest and dividends alone.

My friend came from a very humble background and constantly points out the inequities of education and opportunity in San Francisco. He’s very against buying his way into opportunity. However, the fact that his family has so much wealth makes it impossible from him not to gain better access than everyone else. He’s conflicted, and perhaps feels even a little bit guilty.

When I pressed him on whether he’d pony up the $1 million if an admin officer from Harvard told him that’s what it would take for next year’s admission he said he’d decline. When I asked why he said, “My kids will be fine by then (they are in elementary school). Maybe they don’t go to a Harvard, but will get into one of a whole bunch of other great schools. What do schools like Harvard really represent anymore? Maybe a good opportunity to be a career manager at some company somewhere. It was a means to an end. But we have means now. I just want them to be happy. They can be happy going to any school.”

Parent #3 – Makes Eight Figures A Year Managing A Massive Mutual Fund

The third example comes from a father who went to an Ivy league school. He makes eight figures a year and is a powerful man in the finance community. When I asked him how much he’d pay, he pragmatically said it’s too early to tell. But if his son starts doing well in high school he’ll start donating money to target schools after freshmen year. “You mean if he starts doing poorly in high school?” I asked.

“No, if he starts doing well. I’m not going to waste my money on donations if he’s a knucklehead,” my friend responded.

“Wait, our whole topic of conversation is to see how much it takes to buy our children’s way into a top university. So you’re saying these universities still care about standards?” I retorted somewhat facetiously.

“Of course they do, but I’ve got to at least see if my son is in the ballpark first!” he said. Unfortunately I didn’t get an exact dollar figure from him on how much he’d donate since he had to go home for dinner. But suffice it to say he’d be willing to donate hundreds of thousands of dollars to give his children a better educational future.

THE WORLD IS UNFAIR – WHAT WOULD YOU DO?

Up until now, I’ve naively felt that meritocracy wins out in the end in terms of academics. If your child is bright, she will go places. If your child is average, then perhaps one of the hundreds of terrific average schools will be their calling. Perhaps the difference between average and bright comes down to how much money you’re willing to donate? This post shows that the price of buying your kid’s way into the best universities cost between $500,000 – $1.5 million dollars.

It was easy to tell the difference between the average kids and the smart kids in school. As adults, it’s near impossible to tell because we all know the basics of how to live life. We aren’t talking about how to solve multi-variable equations and debating how we’d fight a previous civil war. All we’re doing is following society’s rules of outstanding citizenship. Things such as being respectful, courteous, attentive, honest, and driven carry more weight nowadays.

Now that hard numbers are assigned to access, it certainly seems like if you can afford to donate hundreds of thousands of dollars to a University which already has multi-billions in endowment money, your child will fare much better than some kid whose family makes $55,000 a year. These kids with their trust funds are set for life. And their kids will also be set for life too if they don’t blow it all on poor investments. As a University administrator, you look at a potential student’s lifetime value of giving!

The only way it seems a middle class family’s child can get ahead is to work harder than everybody else or be more talented than everyone else. We can’t help talent, but we can control our work ethic. As parents we can whip our kids into shape to never fail due to a lack of effort. Someone in the family has to make the sacrifice for a brighter future. It might as well be you reading this.

Related Posts:

How To Value A College Education

How The Rich And Powerful Get More Rich And Powerful

Is Not Wanting To Be Rich Selfish?

Readers, if you had the financial means, would you pay extra to get your kid into a top university s/he wouldn’t be able to get to on his/her own? Can you blame university administrators for accepting money for more lenient admissions criteria? If you were an administrator whose purpose is to raise funds and make the university the best possible, isn’t money and having a legacy of great alumni a good thing?

Regards,

Sam

 

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Jacob says

    Maybe I have a different perspective on this as I come from the continent but again, I dont believe buying your way in is wrong or even a problem. If the kids are below average they wont make it (G.W. Bush might be an exception to the rule) and will be gone, as the standards are what they are but thinking from a free market perspective:

    Your running the richest school in the world and want to stay ahead? You get the richest AND the smartest kids and keep growing the endowment funds so you can make the choice for the poor and middle class kid once in the while and provide an amazing uplifting story and keep on picking those donors and there well trained, private school kids.

    • Financial Samurai says

      That is the perspective of the President/Chancellor whose main purpose is to fund raise and build the reputation of the school. It makes sense. There just has to be more balance or not be so overtly biased.

      A great example is Stanford vs Berkeley. Stanford is very open about money being a big part of helping get kids in. They are private and can do what they will. At Berkeley, there is a Wall and the admissions officers can’t be as easily swayed as it is a public uni.

  2. Austin says

    I would place more value on secondary education. I would pay to provide the best secondary education I could allow for my child. Your ROI probably diminishes at a collegiate level if they don’t have a good foundation and end up somewhere they shouldn’t be.

    I went to boarding school and remember a kid from New York whose dad visited during a parents weekend. He was struggling in our math class and his father sat down and chastised him in front of everyone. He told him that he had to do well at math if he wanted to go into finance. He told his dad he might not want to go into finance. His dad told him he had to because “that’s where the money is”. For several reasons, I’ll never forget that interchange. I bet he hates his dad and probably failed out of whatever college his dad paid his way into, just to spite him.

    Just give them a good foundation and then let them find their way.

    • Financial Samurai says

      Great point on a better ROI young. One funny story though I read on Bloomberg, “What if after years of private school, your child ends up at Penn State instead of U Penn?”

      Wouldn’t all that private secondary school spend be for naught?

      • Austin says

        Like Penn State is a bad school? That seems a little silly.

        There are certain state schools that I never thought highly of. If you had a pulse you could get in. But, after working with very smart people who went to that school, and seeing some of the grad schools they went on to, I changed my attitude.

        Besides, outside of a particular career paths and handful of highly structured majors, I think we could all agree that college is mostly BS.

        • Financial Samurai says

          It’s just the quote I read in a Bloomberg story.

          The point being, why spend $27,000 a year for private middle school and high school to go to Penn State, a fine school that’s public which isn’t that hard to get into? I’d much rather save all that money and have my kid go to a public school who wants to go to Penn State.

          Penn State

          Applicants 41,545
          Admitted 22,761
          Acceptance rate 54.8%
          Yield rate 31.9%

  3. William @ Drop Dead Money says

    I hear you when you say money can buy entrance to top colleges. However, that may not exclude merit altogether, at least not yet.

    We don’t have kids, but we have tons of friends who do. One is a professor in the Cal State system. Their oldest son was bright enough to earn a full-boat scholarship to Harvard. He’s still there, doing graduate work.

    Another friend is an ex-Olympic swimmer who got a scholarship to Stanford.

    When you said “The only way it seems a middle class family’s child can get ahead is to work harder than everybody else or be more talented than everyone else,” it’s always good to remember that “than everyone else” is not as high a bar as it may sound. You didn’t say whether your MOTU (Masters of the Universe) friends got there by attending top colleges themselves or not. I’m guessing the latter.

    Therefore (a) there’s evidence that merit is still alive and well, and (b) attendance of a top university isn’t a prerequisite for success. Hey, you’ve done pretty well yourself: did you need to attend one of those exclusive colleges for that? :)

    • Financial Samurai says

      It is great you have hope that our kids will be smart enough to receive a full ride to Harvard and swim fast enough to be an Olympian. Just don’t look at the stats of how many people actually do so.

      As the first sentence of the post states, I’m pro public school. So perhaps the reality is from your comment that people are just wasting their money?

  4. Ravi says

    I don’t think it’s an issue for a university to let people “buy” their way in. From a university’s perspective, they only have one need to compete: money.

    They have to balance short-term, medium term, and long term inflows in a variety of ways. They may allow sub-standard students in who can afford to pay more tuition (either full tuition, out of state tuition, or donations… are these really different?), but if they keep doing this then their alumni reputation will suffer. Eventually this will catch up to them. If they only allow the best and brightest, they may have moderate success, and be able to make decent money and hire strong faculty, but other schools may pass them.

    Like a company trying to optimize its capital structure, a person trying to optimize their asset allocation, or any other analogy you can imagine, a university must also optimize their student body in the present day in order to maintain their success in the long-term.

    • Financial Samurai says

      I think you are exactly right from the private university’s perspective. It really is run like a company that is aggressively competing for resources (money) and looking to produce students who will be most successful in carrying the name to bring in more money in donations!

  5. Ace says

    I’m sure this happens all the time. Wealthy people buying their kids way into an Ivy League university.

    Well….. I can give you anecdotes (as much as they’re worth). My sister went to University of Chicago on scholarship.

    Also, an immigrant friend of mine (from Greece) put his son through Northwestern (both undergrad and medical school). I understand that his son is now in charge of the cardiac unit in Santa Monica. A middle class success story!

    • Financial Samurai says

      I wonder how folks who got into great schools on merit alone feel when they meet people who didn’t or read stories about people who didn’t. Does it make them appreciate their education more? Or do they resent that less worthy people got to the same place they are in without having to execute as much?

  6. Nell @ The Million Dollar Diva says

    Interesting post. Things are, luckily, a little bit different here in the antipodes. Most places at university are allocated on merit, with scoring based on your final year. And extra points are automatically awarded to disadvantaged students, so it sort of evens out. Of course, wealthy families also have the option of paying for a place in the top schools, but it’s very transparent in terms of X dollars is the full free price.

    I’ve also noticed that the university you graduated from stops mattering about 5-10 years into your career too. I guess we also lack the ‘prestige’ mentality associated with the top unis.

    • Financial Samurai says

      I definitely agree after 5 years nobody really cares where you went. It’s what you did at work that counts most.

      The post shows there’s an ability for some to simply leapfrog other students not based on merit. And a lot of these schools are funnel schools to the best jobs in the country. It’s a cycle that cannot be broken imo.

  7. Shaun says

    I’m not entirely sure what the point of paying millions of dollars for school is. Why not just buy your kid a house put the change in the s&p and let them live off the interest it generates. Why get your kid a massively expensive education so he can start out at a 100k a year job when that is literally a drop in the bucket to you.

    I’m all for only taxing those who use the schools. Lets start with people who don’t have kids…. Err wait actually I’m pretty happy to contribute to making my neighbors kid smarter and less likely to rob/murder me. Just like any other social program its ultimately for the greater good of society. We all implicitly use the public education system.

    • Financial Samurai says

      It’s an interesting issue isn’t it? I think at the end of the day, no mater how much money you have, you STILL want to see if your kids can make it on “their own.” There’s a lot of pride involved, and a lot of wealthy parents fear they are overcoddling them.

      Another discussion broke out where one asked, “What if my kid figures out I helped him get in?” It’s a logical question b/c if you’re a B student, with average SAT scores and no leadership roles, it would be a curiosity if you did get in, especially if you are rich.

  8. Christine says

    I’m not sure if I’d ever pay to buy a child’s way in! However it’s not surprising this happens. I am a little more interested in developing the child pretty early. So by the time high school is finished they should have the talents to make it on their own. University would help them out if they want a regular career or want more connections than they made in high school (assuming the high school was prestigious in first place). I’m pretty open to them choosing a career or entrepreneurship. But with entrepreneurship they better be working it throughout high school!

  9. JayCeezy says

    Buying access to higher education doesn’t seem like a problem to me. This is just another form of “diversity”. People in college need to learn how to interact with rich people, too. Exposure to a different culture will be good for those in the 99.9%. Besides, the extra $1mm or so in support to the university will help subsidize the education of students who require financial assistance. Win-win!

  10. Smartest Woman on the Internet says

    How did barack and michelle obama get into Columbia, Princeton, and Harvard Law School? Their families certainly were not wealthy. Hhhmmm, maybe they both had some other advantage? Wonder what it could be?

  11. Dan says

    who says money can’t buy happiness? hah

    very interesting read! I am a huge proponent of instilling hard work in parenting. Sounds like #3 is most in my ballpark. But I like #2s outlook, he has life figured out in my book!

    Lastly, I find it amazing how far out #1 is looking. So much can change from middle school to 18. Interesting to think about putting so many eggs in one basket that far in advance.

    • Financial Samurai says

      #2 has his head on really straight bc he came from a very low income and broken household.

      But it’s very easy not to care about going to XY school when you don’t have to worry financially bc you have already won the game so to speak.

  12. krantcents says

    Instead of buying a university education, the right primary and secondary education provides a better payoff. I sometimes think doing the opposite and let my children excel in a failing school which is infinitely easier than going to a challenging private school. The shortcoming is it would be an experiment which can be very detrimental to my children’s future. I chose the safer choice of a good private k-12 education. Money was better spent!

  13. MrB says

    I hate to be one of those people claiming the middle class has it tough these days. Frankly they still have it very well compared to most other countries. Also, I don’t suspect anyone in the middle class envies the poor. That said, in regards to the specific situation addressed in this blog post… it is very difficult for middle-class families to get their child into the top tier school. I can only speak from personal experience: my sister, who was top of her class and well involved in extracurricular activities, did not get into any of the top tier schools to which she applied. The schools are looking for students that overcame adversity, or students from wealth (donations attached) or international students. That being said I don’t think it’s necessary whatsoever to go to a top tier school anymore . Sure it helps, but in this modern economy it is totally necessary. You want to do well? Start your own company. You want to do well in the corporate world? Play the game and work harder than anyone else. The world’s information is at our fingertips, all for free! It’s no longer the case where you need to go to the finest universities to gain access to information.

    Agree?

    • Financial Samurai says

      There are definitely many ways to peel a mango.

      I still think the most formulaic and easiest way to make good money and have a good career is doing well at one of the target schools. We’ve learned how to game the system.

      Entrepreneurship is the X factor.

  14. Steve says

    I think this is largely irrelevant. I went to a very fancy boarding school. My brother and sister both went to very fancy colleges. We all agree that this scenario occurs in the extremely low single percentages. Not worth the time or energy to focus on this line of thinking — counter-productive at best. NEXT!

    • Financial Samurai says

      Can you share what you are doing with your life, your net worth, income, and all that good stuff? Do you plan to send your kids to boarding school? Were your parents rich? All these are interesting things to know.

      Easy to say things don’t matter if you’ve got everything.

  15. WallStreetPlayboys says

    “The only way it seems a middle class family’s child can get ahead is to work harder than everybody else or be more talented than everyone else. We can’t help talent, but we can control our work ethic.”

    This should be written in stone.

    A second note, the billionaire has it right. His connections are worth much more than a degree. If the kid can go to an above average school but simply leverage his connections his kid will be just fine.

    Similarly, sure ou had this happen, the son of an important company comes in to work as an “intern” take a guess if that kid gets the offer. Of course he does. The billionaire guy can just get his kid an internship at a BB bank in something like sales and trading, then he an just manage the account of his… Billionaire family. Unfortunately the world is not fair at all times.

  16. Justin @ Root of Good says

    I’ve never seen the merit in paying for private ed whether in K-12 or university level. Assuming your public options are good enough.

    It’s easy enough to make a decent living without a lot of stress in America these days. Part of the equation is picking a career with a high remunerative value (STEM, business, health). the other part is spending less than what you make.

    Unless you are the billionaire family or the eight figure annual income family, spending tons of money for a private school education will be a big sacrifice that would take a long time to pay off (if ever).

    I’m not sure if I would buy my kids’ way into a prestigious university. A half million or million dollars is a lot of money to me, and I don’t see the marginal value of an Ivy League education versus top tier state schools at a fraction of the price.

  17. David Michael says

    My middle-class parents sacrificed (financially they say) to make sure that I was one of those kids who went to college prep school (Jesuits) in Washington, D.C. so I could get into the best colleges. I received a scholarship to Georgetown and after two years transferred to Duke to get away from my domineering parents. Then…onto grad schools, three to be exact with three more degrees. Actually, I really enjoyed going to college once I got away from living at home. Even spent an extra year at Duke to take extra classes and improve my grades. I paid for nearly all of my undergraduate education myself by working two or three jobs each summer. Fascinating jobs from a CIA intern to being a commercial fisherman in Maine for two summers catching dogfish for a local biology laboratory. That’s when tuition, board, room and books were $2000 a year for the very best private schools.

    Now at age 77, I can look back at some of the sacrifices along the way that I made theoretically to insure my future. One…the old classic education was just that…old and classic. Instead of studying Greek and Latin for umpteen hours a day, I should have been learning to speak Spanish, French or German fluently (all of which I did study eventually but not to fluency).
    As an all-boys-high school, I really missed the interaction of girls in the classroom. I found the public school kids had much more fun. As a result, I never go to my high school reunions, even though many of my classmates are rich and famous with names you’d recognize.

    I’ve had a great life, but private schools only made a difference in my very first job as a chemistry professor poisition. After that it was all up to me for the next fifty years. One of the neatest things I did when I went back to grad school at age 65 to start all over, was play on the college soccer team. I never had time to compete in collegiate sports when working so much.

    So…in summary. Watch the movie, “Little Miss Sunshine” with Alan Arkin playing the grandfather. Lots of his comments are so, so true. Private school doesn’t insure anything. In many cases it’s just a waste of money these days, jumping in a squirrel cage with a wheel that makes you go round and round, faster and faster with little hope of satisfaction. For my grandkids, I say, work your way through public colleges, even if it takes six years, and enjoy every moment. Public or private school, life is what you make of it.

    • Financial Samurai says

      Love it David! Thanks for sharing your wisdom!

      Did $2,000 feel expensive back then? It’s hard for myself and others to have an idea since similar school tuition is now well over $40,000 a year.

      Hopefully you can share a story about one of your famous and rich classmates one day. I do wonder if they would be famous and rich now if they did not go to private schools and make all those connections.

      Will put Little Miss Sunshine in the queue!

      • David Michael says

        In reply to your question Sam about today’s college costs vs. $2000 back in 1960, the quick and realistic answer is today I would be overwhelmed, both from the student as well as the parent standpoint. It seems that life was so much easier in the 50′s and 60′s when health costs, college costs, etc were not a problem for most middle class families. Everything seemed to be within reach by working one, two, or three jobs during the summer as a student. I never, ever had a problem with finding work, even if it was during a three week vacation period. And…I felt I had a viable future. The whole country was optimistic and full of confidence. I think things started to change with the death of John Kennedy as President, and the election of Ronald Reagan at a later date. Trickle down economics didn’t work, and Reagan ushered in a new era for the wealthy class that has produced today’s society.

        As a parent, I would want to pay the undergraduate costs for college today. It cost me about $10,000 a year each for my two children who graduated 20 years ago. Today…at $50,000 for a private school, I don’t know if it’s worth it. If my kids didn’t get scholarships, and I didn’t have the foresight to donate to a 529, then we’d be in a heap of trouble. I’d suggest a six year program working one’s way through undergraduate years in a public college to use as a maturing process, educational process, and learning on the job process. By the end of six years, one should have learned enough about life to make it through the next steps. In general, there’s no doubt in my mind that the younger generation today has it a lot harder than mine.

        I was fortunate to grow up in the glory days of 1946-1980. The Middle Class was strong, the unions were growing in many areas representing workers of all ages and occupations.
        When I first travelled to Europe in 1953, it seemed the American dollar could buy an entire country. We all believed in the possibility of being wealthy by working an ordinary job. In general, those 34 years were an incredible period of prosperity for the USA.

  18. John says

    I know this reply misses the point of the post ….but the first couple paragraphs I believe are very significantly off base…..

    Bottom line..you will NEVER EVER fix the public school problems with tax increases. I am living this dream/nightmare daily

    I live in a NC county that has been “infested” by New York/New Jersey transplants fleeing ridiculous property tax rates in their home state. They have flooded my county, that has had good schools…actually the best in the state…….but they determined they were not “good enough”. So, they elected like-mineded members to the school board, and went on a spending binge building schools, hiring more teachers, etc. In 13 years, my property taxes have TRIPLED, thanks to needing to pay off their bonds. Have the school student scores increased? NO NO NO. What has increased is 1.) number of teachers/assistants per student (but education quality has NOT increased), number of teacher work days, number of types of classes (my kid can take Sports Marketing in HIGH SCHOOL….give me a break!). The tax dollars are literally being tossed out the window by “professional educators” and “public policy gurus” that are really at the root of the demise of our public education system decline. I have been working on my wife for the past couple years that we MUST move….we are supporting this boondoggle with my exorbitant tax rates (literally, they are the same now as Bergen County, NJ…we are the NJ of the south!). To top it off, I have to de-program my kids after the are literally inculcated with socialist…almost Marxist…propagandists who are teaching them. This was not the “public school environment” that I grew up in and have always been so proud of (I never attended a private school of any kind). Until we get real competition in our secondary schooling system, we will simply get “big government, VERY expensive, little socialists who do not add near the value to society that we need). Let’s re-engineer the system….the “increase taxes to pay the teachers more” is simply shallow thinking…I am living in this “puddle” ……

    • Financial Samurai says

      Love the rant John!

      My point of the paragraph on taxes is this b/c I’m still a little miffed: The voters of San Francisco voted DOWN a Proposition that would have raised public school funding by $10 BILLION a year b/c it taxed everyone 1-3% more a year e.g. everybody pitches in for the good of our children. Instead, the public voted for a proposition that raised taxes by 3% for only those making over $250,000, and it was RETROACTIVE to boot. The result? Only $3-4 billion in education for our children. Why did this happen? Because one group voted to raise taxes on another group b/c they always can b/c they are a majority.

      Many folks who earn over $250K are not sending their kids to public school, which really gives them the double screw b/c they aren’t getting anything out of their higher tax bill at all. This is why I’ve proposed a Renters Tax and taxes correlated more with usage. With such proposals I think there will be LESS taxes and wiser spending b/c people can no longer just vote to raise taxes on someone else without having to pay more themselves.

      GO USA!

  19. mysticaltyger says

    I disagree with your whole premise about the schools sucking because there’s not enough money. I think the schools suck because so many kids come from single parent families. They also suck because it’s practically impossible to fire bad teachers. This is no longer just a right wing conservative position. Documentaries such as “Waiting for Superman” outlined how we spend more per student (in inflation adjusted dollars) since the 1970s but achievement has not improved by much.

  20. Untemplater says

    If I was insanely rich I might consider it. But there are a lot of great schools out there and just because you can buy your way into a school, doesn’t mean it’d be in the best interest of the child.

    I wouldn’t want to send my child to a great school and have them flunk out when they could go to a school within their range of abilities where they could flourish.

  21. Peter Kiang says

    Good post Sam. My daughter is a high school senior so I can really relate to this topic.

    I have heard rumors or jokes that if you can donate a million dollars you can probably get into any college you want. Your post basically confirms this, at least for private schools.

    Of course if you can afford to donate a million dollars your kids probably won’t need jobs anymore, which is basically the point of parent number 3 in your post.

    I have two cousins that went to Harvard based on merit, and they told me the people there are either really good or really rich, sometimes but not always both. If you are very poor you probably won’t fit in well as most kids are from families with at least some means.

    My daughter will go to a state college this fall. Same college I attended almost 30 years ago.

    • Financial Samurai says

      Hi Peter, I wish your daughter the best of luck. Nice that she’s saving you some hefty tuition costs!

      A big part of the post is really trying to get into what’s going on in these folk’s heads since they are already set for life. And I think the answer is at the end of the day, pride and merit do count. Parents want kids to see if they can succeed on their own. So do kids! So if a $1 million donation can help them “succeed on their own,” why not.

  22. The First Million is the Hardest says

    I don’t think I would do it if I was rich enough. I’d want my kid to get by on his/her own merits, not become a spoiled and entitled brat. I can see why parents do it and schools accept it thought, but in the end I wonder if it really makes a difference. Once you’re out of school your success or failure will ultimate come down to your talent and work ethic. Even if daddy can get you into Harvard with his money and Goldman with his connections, he probably won’t be able to keep you there if you slack off and don’t know what you’re doing.

    Parent #2 from your article could start a scholarship or donate to a schools scholarship fund if he feels guilty about buying his child’s entrance. At least then he’s also helping someone who can’t buy their way in to get the same education.

  23. Marvin says

    We have discussed this at lengths in our household and one thing we realized is that you’re not necessarily paying for the education when you attend private school. You are paying for the social network your child will develop. If all the other kids are sons and daughters of prominent individuals chances are they will become prominent as well. Thus living in the dorm, engaging in keg stands, and a whole list of other college activities will bring them closer and establish a lasting relationship.

  24. Sandy Willow says

    My husband and I are currently putting our son through his first year at college and have a daughter that is in her junior year of high school. It seems that no matter what college or university you child chooses it will cost you at least $50k per year. We are thankful that he was able to obtain a scholastic scholarship that helps offset the growing cost of private schools. We will be looking at the same path for our daughter and hope that she will be able to achieve the same level of scholastic support that our son did.

    If I had the means to buy into an ivy league in order for our son or daughter to gain acceptance, I still think I would go the route we used for our son. Let them get accepted to a college or university on their merit and not on the financial pull of their parents. I believe in doing so, you teach your children that life is difficult and that you need to work and show the value you bring to the table.

    Great article and makes you think.

    Thanks,

    Sandy

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