The Wide Implications Of The College Admissions Bribery Scandal

The Implications Of The College Admissions Bribery Scandal

Thanks to the fantastic work by the Department Of Justice and the FBI we have learned the average bribe it takes to buy your kid's way into an elite private university is between $250,000 – $400,000. Although, some bribe amounts went as high as $6 million.

The 10-month-long investigation, code-named “Operation Varsity Blues,” uncovered large bribes nationwide across various stages of the college admissions process. So far, two SAT and ACT exam administrators, one exam proctor, a college administrator and 33 parents, including actresses Felicity Huffman and Lori Loughlin were arrested.

The private universities spanned across the nation, including Yale, Stanford, Georgetown, USC and Wake Forest. A couple of public schools such as UCLA and the UTEP were also involved in the scam.

In one alleged incident, the Yale women's soccer coach received $400,000 to accept one student on her team, even though the applicant did not play soccer.

In another alleged incident, Lori Loughlin, aka “Aunt Becky” on Full House, allegedly paid $500,000 in bribes and fabricated photos depicting her daughters as competitive crew rowers in order to get them accepted into USC.

Then there's the Stanford University sailing coach. He agreed to also accept $500,000 in bribes in order for two students to gain admissions.

Bribe-willing parents take note!

College Bribes And A Rigged System

According to Andrew Lelling, the US Attorney for the District of Massachusetts, the ringleader of the scam is William Singer, owner of a college counseling service called Key Worldwide Foundation, who accepted bribes totaling $25 million from parents between 2011 and 2018.

Singer's counseling service is alleged to have been in reality just a money bribing business which enabled wealthy parents to buy their kid's admission into an elite private university. Singer even set up his own fake charity where parents could “donate” the money and then write the donation off on their taxes.

“The parents are a catalog of wealth and privilege,” Lelling said. “They include, for example, the CEOs of private and public companies, successful securities and real estate investors, two well-known actresses, a famous fashion designer and the co-chairman of a global law firm.”

Implications Of The College Admissions Bribery Scandal

As the parent to a two-year-old currently “stuck” in extremely competitive San Francisco, I find the details from this investigation extremely fascinating. In fact, 14 of the 33 parents indicted hail from the SF Bay Area.

Over the years, I've written many posts regarding the private school system as I try to work out what's best for our son.

After all, I come from a middle-class family and went to public high school, public college, and public graduate school. A public school education has worked out fine for me, but I want to make sure I'm not missing the benefits of going the private school route.

Here are some past posts to review:

Would You Accept $1,000,000 To Go To Public School Over Private School?

What If You Go To Harvard And End Up A Nobody?

Private School Or Public School? Depends On Your Level Of Fear And Guilt

If you read the posts, you might come away thinking I'm waging a jihad against the private school system. In actuality, I'm just trying to get my head around paying such enormous amounts of tuition for an asset that is declining in value.

After all, this is Financial Samurai, a personal finance site that focuses on optimizing our finances and living our best lives possible. Buying a taxi medallion ahead of the ridesharing revolution won't help your finances.

I love the topic of education, and this latest college admissions scandal is worth reflecting on since every parent cares for their child's future and we all care about competing in a fair society.

15 implications from Operation Varsity Blues

1) Private school reputation takes a hit.

Private schools are already under fire due to a number of reasons: 1) outrageous tuition, 2) student body is much wealthier than the overall US demographic, 3) rumors and now facts of buying your way in, 4) affirmative action, and more. The Varsity Blues investigation simply buttresses the point that this stuff goes on at private schools. It's the same way we know shady recruiting tactics occur in D1 college sports.

2) Public school reputation grows.

Notice how the vast majority of admission bribery cases occurred at private universities. Some argue this is because there are many more prestigious private universities than public ones. However, there are still plenty of prestigious public institutions like Berkeley, UVA, UCLA (named in scandal), UCSD, Michigan, Wisconsin, UNC Chapel Hill, Purdue, University of Illinois Urbana-Champaign, George Tech, US Military Academy, and William & Mary where it appears somehow much harder to buy your way in.

The less public schools are implicated, by default the stronger their reputations grow. You can see public universities climb the rankings as organizations change their ranking methodologies.

3) Affirmative action for the wealthy gets harder to deploy.

We learned from the Asian-American lawsuit against Harvard that donor legacy kids have a 10X greater chance of getting into Harvard than a nondonor, nonlegacy kid. The reason why affirmative action for the wealthy is far more egregious than affirmative action based on race is that wealthy people, no matter their race, already receive the best education, the best tutoring, the most stable home environments, and the most amount of access money can buy.

4) All universities take a hit overall in reputation and importance.

Although it takes a tremendous amount of capital to bribe your kid's way into these elite schools, a college education is fast becoming unnecessary. We can now learn everything for free online. It is also much quicker to do research and learn thanks to the internet.

Yet, colleges continue to raise their tuition 2X-3X the rate of inflation each year. Meanwhile, it still requires the student 4-4.5 years on average to get a diploma. Talk about an antiquated system.

Don't you think there's something wrong with this chart?

5) The angst for all parents is real, but should decrease.

Even if you are a famous, rich, white person like William H. Macy, Felicity Huffman or Lori Loughlin, you are not immune to the anxiety and stress of trying to get your kids the best educational environment possible. The famous, rich, white person is competing against even more famous, rich, white people. This constant comparison will never stop until we make it stop.

Then there's Manuel Henriquez, Founder & CEO of a publicly traded specialty finance company called Hercules Technology Growth Capital. He and his wife paid $400,000 in May 2016 to bribe Georgetown University head tennis coach Gordie Ernst to accept their older daughter as a supposed recruit. In other words, even an extremely wealthy man from the Dominican Republic whose children would benefit from affirmative action felt the need to cheat.

People of color and the poor should find some solace in the fact that people with all the privilege in the world are still stressing out about their kids' future. People playing by the rules should feel better that something is being done about this rigged system.

6) Smart, hardworking students get unfairly sullied.

Unless the FBI discovers the majority of students at elite universities have parents who buy their way in, it is likely that most students got in through merit. Unfortunately, this college admissions scandal will unfairly paint all elite college students and graduates, especially wealthy ones, with a suspicious eye.

It's the same way affirmative action may discredit an underrepresented minority's achievements. We must remember that the vast majority of graduates of such schools are highly intelligent, good people.

7) Elite private university graduates will start questioning their accomplishments.

Singer's consulting firm made sure the kids had no idea they didn't get into their respective universities by cheating. The FBI wiretaps highlighted such discussions.

As a result, there will be plenty of students and graduates of these bribe-accepting schools who will wonder whether they got in due to their accomplishments. As self-doubt creeps in, self-esteem may drop, especially for graduates who end up working at a regular job, which most do.

College admissions bribery scandal implications

8) Big city living is becoming less attractive.

Notice how most of the schools implicated in this latest bribery scandal are located in large coastal cities such as Boston, Washington D.C., the San Francisco Bay Area, and Los Angeles. Big cities attract the most educated, type-A go-getters because big cities have employers who pay the most amount of money.

The desire for money and prestige will eventually make you miserable because everybody is frantically competing to one-up the other. The same thing goes for always playing the status game. There is a never-ending amount of money and status to chase. As a result, you need to find what's good enough for you. The sooner the better.

9) Smaller city living is becoming more attractive.

When we look back on our lives, we don't wish we spent more time in the office trying to make more money and getting some meaningless title. What we wish we had more of was the freedom to spend time with family and friends and doing meaningful work.

I foresee the continued growth and attraction of smaller cities as more people “opt out” of the grind. The FIRE movement has arisen partly because people are tired of all the corporate work BS and would rather be free. As a result, I'm actively investing in private real estate funds like Fundrise to take advantage of this multi-decade trend.

10) The value of private businesses go up.

The end goal for getting the best college education possible is to get the best job possible after graduation. Therefore, you'll always be at the mercy of someone else's decision if you do not own your own business.

If you own your own private business, you can rig the system in your favor by hiring your know-nothing 22-year-old kid as VP of Operations and pay him or her a huge salary if you want. Unless you are a C-level executive at a public company, it is very hard to get your kid a top job or even an internship at your firm.

In fact, the value of private online businesses has already gone way up during the pandemic. Why? Because they can't get shut down. When you can continuously operate no matter the environment, the value of your business and its cash flows goes up.

11) Poor Asian Americans face the toughest hurdle but could find some reprieve.

Given there is clear affirmative action for the wealthy through “donations” and straight up bribes, while race-based affirmative action does not include Asian Americans for some strange reason, poor or middle-class Asian Americans will have the greatest difficulty of getting into an elite private university.

This is one of the reasons why you see so many mom and pop stores owned by Asians across the country. They know nobody is coming to help them, so they must count on themselves.

12) Poor students will see an increase in reputation.

On the flip side, if you happen to be a poor Asian American or a poor student from any race who graduated from an elite private university, your stock should go up given more people realize what you've had to go through to get in. My hope is that more universities look at one's socioeconomic background when considering admissions.

13) A greater percentage of parents will donate to schools.

The irony about this bribery scandal is that parents will simply go through legal bribery means by donating quid-pro-quo directly to their desired schools. The 33 parents caught so far were simply bad at cheating. They should have just contacted the admissions office at XYZ private school and discussed a plan to donate directly to a new building, courtyard, or scholarship. The donations will likely be more anonymous in the future.

The Wide Implications Of The College Admissions Bribery Scandal
Fake charity Singer set up so his clients could write off their bribes

14) There will be a rise in stealth wealth.

Given the college bribery scandal has reignited hatred for the rich, the rich will flaunt their wealth less. Luxury car sales might go down as BMWs are traded in for Hondas. Rich parents will tell their rich kids to stop showing off their wealth over social media.

There may even be a surge in luxury home inventory as the rich decide to move out of expensive neighborhoods. Stealth wealth has always been a good idea. As we surpass our 10th year in a bull market, practicing stealth wealth is more important than ever before.

15) The middle class may become wealthier and happier.

As college becomes less important in finding a job, there will be fewer people spending four years and borrowing tens of thousands in student loans.

With more time and less financial baggage, more people will be able to aggressively save to buy a house, start a family, and save for retirement. With more financial security and more time, society as a whole becomes much happier.

Let The College Admissions Bribery Scandal Pump You Up

Instead of getting bummed out about how all these image-conscious and misguided wealthy people buy their kid's way into elite universities, get happy!

Not only do you not have to spend $250,000 – $400,000 on average per kid on bribes, you also don't have to pay $50,000+ a year in tuition alone for 4-5 years! The bribes plus the full cost of attending a private university for four or five years could run you over $1 million.

Life is already hard enough as it is. We don't need people who have all the means in the world pull further ahead from the rest of us who abide by the rules or who went to public schools.

Let us all thank Andrew Lelling, the U.S. Attorney for the District of Massachusetts; Joe Bonavolonta, special agent in charge of the FBI Boston Field Office; Laura Smith, special agent in the FBI Economics Crimes Unit; and the entire team for unrooting this scandal.

I trust this is just the beginning of much more to come!

Related posts about college admissions:

How To Stop Worrying About Your Child's Future Again In This Brutally Competitive World

The Rich Get Richer: Effective Strategies For Competing In A Rigged Game

How To Get Into A Great Preschool Or Private Grade School

The Diversity Hire Dilemma

Questions And Recommendations

Readers, what are your thoughts on the college admissions bribery scandal? Why didn't these parents just donate directly to the school instead? Why isn't there more backlash against affirmative action for the wealthy? What are some other implications about the bribery scandal I have not mentioned?

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128 thoughts on “The Wide Implications Of The College Admissions Bribery Scandal”

  1. Considering that it is easier than ever to make a living outside of a job, I don’t understand why people bother going to college anymore. College is the greatest lie, deception and fraud ever sold on the American public and I feel extremely sorry for those who have tens of thousands+ in student loan debt as a result of the manipulation by parents and the education system that “if you don’t go to college, you won’t get a job and then you won’t have a future”. Utter bupkis!

    It is a distraction that people fight over the most prestigious schools and career paths when none of those will give you the ability to lead a real rich life.

    Not that I have student loan debt (I graduated from college 4 years ago) but going to college was the most disastrous mistake I ever made and cost me more money, anguish and suffering then trying to build my current side hustle.

  2. College is still necessary for most middle and working class students. Sure it is easier to learn on one’s own due to current technology, however, there are several big problems with this idea:
    1. Very few young people these days have the discipline it takes to become self taught.
    2. Self taught people still need a third party confirmation of their abilities. This is what credentialing is for. Employers can’t afford to take chances on young candidates who say they were self taught.
    3. Many of the college level jobs that pay good salaries (accounting, engineering, medical professions, etc.) require years of study under the guidance of experienced, competent teachers. Robots and videos just won’t do.
    4. Many college and non-college jobs require lots of “hands-on” education that can’t be learned entirely online.

    The right kind of degree can make a difference. Most of the horror stories from colleges involve lots of 2nd tier liberal arts degrees with virtually no economic value. Masters degrees on gender studies or art history will not enable a student to repay their loans.

    Elite and “brand name” institutions are vastly overrated. The value of an accounting or IT course at a community college taught by a real practitioner is higher than the same exact course taught by a non-qualified teaching assistant in a crowded classroom at the fancy high-priced institution—-and a lot cheaper!

  3. I think the problem has multiple causes.

    1) Some parents will do anything to give their kids any advantage possible. Evolution has probably favored the gene-lines that do this.

    2) Attendance at elite schools is seen as a way to get networked for life.

    3) There is a perception that something is not valuable unless it costs a lot.

    4) There is a crying need to separate educating from credentialing.

    Only about 60% of students really benefit from sitting in a classroom listening to someone drone on about the subject at hand.

    Like the other 40%, I learn a lot better when I can go study something on my own and perhaps even apply it. Certainly the methods and opportunities for this have never been better. Unfortunately, we are still tied to a system that demands huge amounts of money, huge amounts of time (lost productivity), and a physical presence.

    After I got my college degree I was delighted because it meant I was now free to study what I wanted to learn, as much or as little as I wanted.

    Soon, however, I found myself having to pick up a master’s degree and, after that, a couple or three credentialed courses every year thereafter. None of this was for my benefit or even the benefit of those I would be working for or with. It was so I could get my foot in the door and keep it in just by showing I had time, patience, perseverance, and money to expend in pursuit of these things.

    I work as a professional, making many times the starting salary for my field, but I have not earned a new credential in over a decade. No one questions my expertise any more, even though a large part of that expertise requires constant learning to stay current.

    There was once a state required credential I needed for something. Most people go to rather expensive classes for a couple of weeks , then take the test, and well over half of them fail it the first time around. I skipped all that. I figured out what materials were that I needed to know, spent about four days reading, and aced the test. The educational requirements were separate from the credential requirements.

    Right now I feel as though 80% or more of everything it took (time, money, etc.) to get all of my earlier credentials (college degrees included) was a waste, aside from the fact I couldn’t have gotten the chance to do what I do without initially having those credentials. I simply didn’t need, or benefit overmuch, from the coursework.

  4. The American university system was created to educate future scholars, lawyers, clergy, and business/civic leaders. It was never meant to be a democratic system open to all. Now that more than half the population enrolls in college, it has predictably become a joke. Lots of people like to tut-tut about the insular WASP culture that dominated the universities until the 1950s, but back then the universities were respectable places where people actually were held to high standards. And by and large, the WASPs were good stewards of our Republic. Education is now a clown world that has all the value and dignity of a Kardashian’s TV episode. And our politicians and leaders, while so delightfully diverse, are short-termists with greed that would make the most miserly WASP blush. Oh well. Now if you’ll excuse me, I must get back to work — gotta earn that money so I can pay taxes and bribes!

    1. “What’s up with crew?”Anyone who know anything about crew will tell you that the kids who row are dedicated, prioritize their time efficiently, and work hard in school. Crew as a sport does not have a “season”. It is a year long, grueling sport that gets pretty much zero attention. I would like to think any admissions person worth their salt would know that the kids who row are unlike football, basketball, and many other sports in college. For sure you won’t see any hardworking pro rower lauded and paid millions by the pros. In addition, they don’t get their college degree in “eligibility” like many football/basketball players. Frankly, the entire process of acceptance, affirmative action, loans, cost of education, government money paid to schools is quite a mess. Let’s not even get into the inane classes the kids are forced to take to complete their degrees! A scientist should have to take Women’s studies? They would do better taking basket weaving or ditch digging! The whole system stinks and this is coming from someone who has 2 kids in college now and 1 high school student on the way to college. I can only hope for future generations this business of how students are admitted and why gets changed. When merit based work suddenly no longer mattered it became, what box can we tick? The under privileged, the person with the saddest story, the person who never had parents who went to college, the rich parents who pad the huge endowments the college already holds, the person with a particular skin tone, the person that makes the school look better, more diverse in some way? It’s horrible. Until we look at people with nothing but merit nothing will change. Frankly, I’m glad these people got busted. I hope it changes something because right now I’m angry as hell when my kids have to take some of the crap they are forced to take to receive a degree.

    2. Social Capitalist

      GU yourcomment smacks of racism. And your “facts” are anything but. WASPs good stewards? Why? And college admission was reserved for a few? GI Bill? 1950s. Lot of free college and some of America’s greatest economic times.
      Finally, comparing college education to the Kardashians is a farce and tries to tie your idea of liberalism to vapid shallow thinking and people. I’m all do the free expression of ideas; surely had you been educated there would be an idea you could freely express.

  5. Sam, a few questions for you and others in regards the scandal on the front of Legacy AA and traditional AA (assuming your case of not using race based AA):

    – Should Applicants of Legacy and donors now have points docked from their applications or given “Zero” preference?
    – Perhaps a floating scale for improvements/detractions for humanity?

    – If eliminating Race based AA, shouldn’t you eliminate Legacy based AA?
    – (i.e. Majority of Legacies are parents/grandparents/great parents who benefitted from legal segregation upon admission until the early 80’s..brown v. board in 54′, followed by J.Crow segregation being outlawed in 68′, but minorities “including Asians” weren’t really welcomed on campus for another decade. People were still being lynched and KKK were very prominent in many areas)

    – Should you also allow for the criminal justice system to apply the same socioeconomic AA that you propose? (i.e. the more wealth, the harsher the penalty than their poor counterparts who’s environments usually contain more criminally susceptible pitfalls and have less money for representation)
    – Among underrepresented minorities the native americans, followed by blacks and
    Hispanics currently receive much harsher penalties compared to white counterparts

    The Very issue here, seems that if you eliminate Donor/Legacy AA preference you may very well cripple a system built on capitalism regardless of the source of wealth (good or bad). Then the value of the entire system begins to collapse in some capacity. Therefore, until the nations problem is fixed at the top (Legacy AA and Criminal justice) in larger volume, it makes zero sense to eliminate the perceived problem at the bottom (Race based AA) all for the sake of a few slots. Thoughts Sam?

  6. My first ever posting! Something about this topic just brings up so many mixed emotions! So in no priority order, here goes:

    1. I wish everything in life was merit-based. But the fact that there’s a first class and it’s not my priority in life, therefore I don’t pay the price… well I am ok with that. Or I see a senior citizen getting wheeled in, sitting in a cramped coach seat, while a “rich” young and healthy looking person sits up front, even that doesn’t make my blood boil. But I have a high schooler, who is working his butt off. My heart breaks for him every day knowing he probably won’t get into the college of choice because the most elite private colleges have fewer than 1000 true spots when removing the recruits, AA, legacy, development kids.
    2. I don’t find much in the way of outrage over the billionaire who donated a building. After all, that donation resulted in a private benefit to his off-spring (easy admission), but also a benefit to the larger college community who get to have their classes and events in this new space.
    3. So then we come to us lesser rich people. I don’t know the stats specifically, but 0.01% are the real wealth holders. The 1%’ers (especially in SF area) do not hold as much wealth. And if there’s a connection between wealth and over-sized influence, then I would say we 1%’ers don’t have the kind of pull that others demonize the 1%’ers to have.
    4. These kids… I’m finding it really hard to believe that these kids didn’t know what was happening. And in fact, some had SAT’s in the 1000 range that got bumped to the 1400 range. WOW! Any kid in a bay area high school would have to WORK HARD to get an SAT that low. Which brings up a question about their upbringing…
    5. Simple biology question… if I’m the head of some major finance company, I’ve gotta be a pretty analytical person. And if I am, my kids must see how hard I work and have some basic math skills. So then just wondering, did these super smart CEO’s marry trophy wives and these kids inherited their mom’s IQs? Seriously, what the heck happened? There’s no way these are slacker parents. Did they have zero expectations of their kids?
    6. And these kids… I’ve heard from some execs that when they interview young ivy grads, they know to ask “did you play a sport in college? And were you recruited?” It’s a way of figuring out if they’re smart enough to get into the ivy or not since it was used as a proxy initially to bump up the resume.
    7. And today’s senior class… gosh! As I started hearing about ED’s to Stanford and Harvard since December, I thought “good for these kids! They worked hard!” Today, I have to be honest, there is a cloud over their admissions. As a recruiter, I feel like I need to stick to Caltech and MIT. Their value just went up in my mind till another scandal implicates their reputation.
    8. And one more thought about these kids… I’m guessing there’s about 30 of them. I really hope they’re ok. Whether they knew or didn’t, I’m sure they all are feeling pretty lousy emotionally and will have to always prove themselves in every way going forward.

    Sorry for this super non-PC post. But I’ve got a lot on my mind and no other forum to discuss this. I really hope there is a long term impact to the way private school admissions are done. I am no politician, but seems for every person I benefit, there is an injured party since college admissions is a zero-sum game. It really sucks to be in high school today!!

    1. Adam Singer supposedly helped over 800 kids cheat their way in BTW.

      I do agree that Caltech and MIT has appreciated in value, as have all the already well regarded public schools like Berkeley.

  7. As a retired senior development exec (healthcare/academic medicine) I found the story regarding bribes from the wealthy to gain entrance to elite academic institutions and/or changing entrance exam scores for a child both disappointing and disgusting. All involved on both sides (those making and those accepting bribes) should be prosecuted; the involved universities sued; and the affected children permanently expelled. Regrettably I sense this is just the tip of of the iceberg. Finally, according to the IRS, if proven that one made a tax deductible gift to gain a child’s entrance into a elite university it is against the law – the technical term is “inurement” – a federal felony that is a prosecutable offense for both the donor and the NPO.

  8. You’ve sorta missed the whole point of getting into big name schools. If you want to work for a top law firm it doesn’t matter if you got a top notch education at a lesser school. The law firm will only hire from Yale and Harvard. It is that way for a slew of occupations. You want to work in journalism or TV? Better have a degree from an elite school. Some of these people were celebrities who undoubtedly needed their kids to have degrees to keep their social standing (which for some of them resulted in their kids having contracts with Sephora for example). These things are worth a lot of money.

    Frankly, I’m surprised that anybody is surprised. I knew this when I applied for jobs 20 years ago. I think it’s slowly changing. The network of alumni and school rep isn’t what it used to be.

    1. I went to William & Mary, a good public school, but not considered a target school for many of these firms you are thinking. Started at a top investment bank where we rejected 90%+ of Harvard and Yale applicants, then started Financial Samurai, which is larger than some media companies where some of these journalists you speak of seek employment.

      Given my background, I am naturally of the belief that an elite school doesn’t matter as much as you or others think.

      Feel free to share more about your background so we can have more perspective.

      1. There remain plenty of well-paying careers that don’t require attending a handful of schools.

        Both my kids used Uncle Sam to pay for their education.

        One heads off to flight school later this year…if they make it through that they’ve gotten the equivalent of $100,000+ in flight training & more than enough flight hours to move directly into a lucrative civilian job once their service obligation is complete.

        The other’s interest is law enforcement…their military service can’t but help in whatever facet of that vocation they pursue after fulfilling their service obligation.

  9. Love this!

    Another thought: Not only might state schools get a leg up, but international schools, too. Cambridge, Oxford, McGill, UT, UBC, University of Melbourne, ETH Zurich, Edinburgh etc may see their stars rise even further.

    Let’s hope so, anyway.

  10. Let me start by stating that I love your blog and your views on general and I salute you for your consistent approach. However, one area I repeatedly roll my eyes as is when you describe your upbringing as “middle class”. Based on your posts, your parents had jobs as foreign service officers for the US Government. That is about as secure a job and lifestyle as one could expect (all living expenses comped by taxpayers). I’m not saying it is a cushy job or easy, as I respect those who do it, but it is an elite job.

    Your views are warped amd you seem to want to cast yourself as middle class struggle when in reality you had a huge advantage over most of the country. Maybe not compared to your wall street buddies, but compared to most you had a silver spoon. This doesnt discount any of your success, or the impact of racism that you said you faced which I agree is a challenge, but you need to get real on your upbringing and your parents jobs – not middle class.

    1. Sounds good. I honestly didn’t realize having a government job was not considered in the realm of middle class.

      For example, even today, the highest salary is $400,000 by POTUS.

      My thought was always that living in a townhouse, having to work at McDonald’s, driving a 8 year old Toyota, attending public schools was middle class.

      Would you define me as more upper class?

      How would you define middle class?

      I readily admit that my lifestyle wasn’t too difficult and I had a stable family environment. And I absolutely believe my college admissions, getting a job out of college, and building this website was mainly luck and growing up as an Asian American.

      How was your upbringing? And what class would you define yourself?


  11. NoFreeLunch

    For those who think even some influence or cheating is simply the way it always works, next time you drive across the SF Oakland Bay Bridge, I want you to ask yourself if it is OK not to have the most qualified engineers building that bridge. OK, some majors are not as obvious in their impact, but sometimes it is subtle, and if it could impact you, wouldn’t you put quality of the graduates over a parent’s desires? Governments give universities tax breaks because of the benefit to society as a whole, rather than for the benefit of the graduates.

    1. But what if the numerous donor families fund the engineering department? Rather have a bridge with a few unqualified donor kids admitted or No bridge at all? Tough proposal, right.

      1. NoFreeLunch

        From the meetings and gatherings I attend, I know of no Alumni donors to my alumni engineering department that have children who have been admitted to that department, and the graduates definitely build things.

        1. Understood, but I’m sure those donors have kids and family members who’ve gotten admission to the university as a whole, though not the specifically the engineering school?

    2. Irish2four7

      That’s kind of a straw man argument; licensed Engineers design and commission the bridges along with architects and other professionals. The bridge was not going to be signed off and sealed by someone just because they were admitted to a university and graduated. I will also say that the grades in university don’t always reflect the potential of the individual later in life. Think about your current role in life relative to your career. Do you think getting an A,B or C in high school or college helped or hurt you complete your last deliverable?

  12. I’m confused. With Affirmative Action does every underrepresented minority get automatic acceptance into the school of choice now days? Also, is that the “only way” these minorities are being admitted (i.e. no academic merit, etc.). Is every underrepresented minority on campus an AA admit?

    I know these “underrepresented minorities” usually account for 5-8% of the student body, but from the sounds of it on this and other posts you’d think they account for such a higher number and would have automatic acceptance.

    As a former collegiate athlete (also a student of color), you’d be surprised how many of those seen as “Affirmative Action” candidates are also double agents (I.e. also athletes, merit scholars, etc.). Subtract the double agents and your 5-8% probably reduces to 2.5-4% and yet not every admit is through AA.

    Yes, I’ve seen college athletes of who are not “Very bright” yet equally as intelligent as some the white frat kids; I’ve also seen college athletes set the curve in calc 2 while competing 50hrs/week. Then, I’ve seen very smart/gifted underrepresented minorities who grew up in wealthy prep and/or private schools get placed into the AA bucket making it harder for the disadvantaged underrepresented minorities (Which is the case the majority of the time). Thus, I can understand the angst amongst the Asian community as well on the AA front.

    However, let’s not generalize AA as if its a guaranteed lottery ticket for admittance. That’s maybe another reason why these parents actually paid for guaranteed admission!!

    1. This is one of the problems with affirmative action. It ends up devaluing a person’a accomplishments because some might assume that it was only through affirmative action that they were accepted.

      The good thing is, this view only lasts briefly. For work and business, it has and always will be mostly about your abilities. And even for school, you either do well in school or you don’t. There is no affirmative action for grades as far as I’m aware of.

      1. Very True Sam and Thanks for this post as I was awaiting your thoughts on the scandal (Well thought as usual)!

        In response to the D3 soccer players post, I also saw several kids on our MAJOR D1 football team in the early 2000’s that were only there filling a jersey because of their family’s donation and/or connection. They usually only last 1 season after gaining admission, but the donor money seemed like a fair exchange for the upgraded amenities, etc. However, as the team revenues increase over time (i.e. TV contracts, Apparel agreements, etc.) each players’ slot increases in terms of potential revenue generation. Thus leading to a decrease in slots for “Walk on’s of Donor Families” but they are STILL available. I guarantee you Clemson (National Champs) has at least 2-3 of these kids on their roster…Someone has to pay for or lend those private jets!

        Perhaps the lower paid coaches (i.e. Tennis, Crew, etc.) thought these bribes were a nice way to supplement their income w/o sacrificing a roster spot? Also maybe the coaches were fed up with not getting a piece of the donor action from the university via a pay raise though admitting “donor walk on’s” to their teams who have no shot?

        I’m not saying this is right, but it’s a reality that now will be much more scrutinized.

  13. Steve Sheets

    I’m a little bothered by the overgeneralizing when I look at all the reactions to this scandal.

    Put in in perspective – there’s about 30 families who are outright shameless cheaters/bribers. This is wrong and they should be punished. But they account for about 3 admissions relative to USC’s 8,200 and UCLA’s 15,970 freshman admitted annually.

    Especially at the UC’s, the system is mostly a meritocracy, with a very small percentage of exceptions. The vast majority of people (yes, even rich people) play by the rules, albeit the rich have more resources. It’s fun to pretend the whole system is rigged, but how would you do it better?

      1. Steve Sheets

        My popcorn is ready for any juicy future releases!

        My understanding is he had a “traditional” college consulting business, that did the essay help/student branding strategies that other guys do. The premium package of bribing coaches and photoshopping kids faces onto real athletes appears to be geared towards the top 1% of his clientele…that’s just my sense

  14. John Harvard

    >it is likely that most students got in through merit
    Definitely not – most private has at least 1/3rd of freshman class via legacy.
    Not well known, but legacy entrance has massive dilutive value.

  15. This is unintentionally a long one, so bear with me.

    So here is my question;

    I’m assuming that since this company was in operation for nearly 8 years or so, that numerous kids went through this. Based on the little detail that I have seen on this (I hardly care but my wife and the news continue to talk about it) it appears that some of the kids were not aware. So with that said, it’s highly possible that this service (or other similar services) could have been used by tens or hundreds of people. Assuming that is the case, there must be a variety of schools that were targeted. Ivy league, high echelon private schools and even some elite public schools. Do you think its possible that your parents could have been involved in a similar smaller scheme back in your day? Maybe it wasn’t $500k at the time. As Sam has noted with inflation and awareness the cost today is $5-10M to buy your way in. Would it be fair to say that 10-15-20 years ago it was maybe $10k-100k? Do you think your parents or grand parents or someone in your family could have seeded your entry? What if they did? would it matter to you now? What if your whole life has been centered around going to some university that you parents’ bought you into. How does this impact you today?

    As a follow up to that…

    Isn’t this just common place, and we are making a large deal about it for no reason. We do have a series of tiered services all around us. First class tickets, front row seats, etc. Those with money have always received better service and access than those without. Now sure there are lotteries, and there are charity slots to gain access, but why take that risk. Cold hard cash has opened more doors than the master key. So why is this a problem? This is how society has run for thousand of years. Those with the money had the power, why is there such an up rise now?

    I have one last smaller example for you… Again, as a follow up to this overall topic discussion with my wife. She continues to want to talk about the injustice of this, and I just don’t really care. With that, I turned to her and asked her a question. A couple years ago or so, we had taken our relatives’ kids to a theme park. I HATE theme parks. There are a variety of reasons, but the main reason is the lines. Lines are annoying because you wait around all day for a 30-45 second theme park ride, to only jump in another line. It’s a terrible system. So, I was forced to go to a theme park. It was actually part of a surprise for our family relatives. They are from a less than fortunate background and from lesser means perhaps. They were visiting us one weekend and my wife and I decided to surprise the kids. They had been talking about this theme park in the area that they saw on the drive in. They were longing to go, and were left with statement from their parents; perhaps next time. We all know what that means – they were never going. So, my wife and I took action. As I said – we decided to surprise the kids with tickets. So what did we purchase? The general admission tickets? Of course not – that would mean lines and waiting and so forth. We bought the most expensive cut all the lines and get to the front of everything tickets. Granted we are talking theme parks here not college admission bribing but you can see where i’m going. So, we went to the park the next day surprising these kids with access to the front line of every ride. It was something they would have more than likely never been able to afford. They got to experience every ride in the park at least 5 times. While we zipped around the park, and had a blast (admittedly) there were hundreds if not thousands of other people there too. All of which were waiting in lines all day. They probably each road 5-10 rides by the time the day was done. So I ask you this…

    What is the difference in our current elite system where money buys access on planes, or trains? Money buys better concert tickets, and better vacations, etc.

    I don’t recall feeling bad getting the front seat on every roller coaster. In fact, there was one such ride where we barely made it to the gate as the last riders were existing. The attendant was across the way opening the door for the general admission ticket holders – who surely had their eye on the front row. The attendant spotted us walking up to the gate, and immediately walked over. He opened the door, and my wife and the kids walk to the front of the ride. I even recall hearing a sigh from the general admission holders. They were stuck with two options, either take the second row and beyond or wait another round to see if they could get in the front again. I looked back at that moment and thought – wow if only they had spent the extra money on the first class tickets they could have enjoyed the ride like we had.

    I asked my wife – did you feel bad about spending money on these kids to give them an experience they would have not otherwise had? If yes, then why are you blaming these parents for getting their kids to the top – by any means necessary.

    So… tell me again, why we should feel bad or put off, or shocked by this great injustice? Why should we think how could we possibly let these “less than deserving” kids get into Ivy colleges, or the front of a roller coaster if you will. Maybe, just maybe we need to relax.

    Until we find a way to make every seat the best seat, there will always be a hierarchy. It is up to everyone of us to determine what is worth our focus and to give our best efforts. Now, i’m not saying that i’m okay with these parents bribing coaches and having others take their kids exams. I’m just saying that I don’t see financial advantages as a negative thing on the whole. I saw some rumors of a mass class lawsuit from past students who didn’t get accepted. I don’t see how this could have merit (i’m not a lawyer so who knows). Just because someone else got something that you wanted doesn’t mean that they took it from you. They were just in the right spot at the right time – regardless of the reason. Think of the last cookie in the jar. Who are you going to sue when it’s empty?

    The last parting thought – Maybe you didn’t go to a private school. Whether by choice or some other reason. I feel as if everyone feels successful in some way despite their college years. Most derive this level of success from income, others from family, and few from hobbies or general goal achievement. Its hard to truly define success, because it’s often in the eye of the beholder. I image those who went to elite private schools feel they are successful because they did. While those who didn’t go to private schools feel successful because they didn’t. Two sides of a coin so to speak, in either case it is probably the individual that is successful and not the circumstance.

    With that said, don’t you wonder what it would have been like to go to the elite parties or social clubs? Don’t you wish you could have the “easy life” some days? If you could wave a magic wand and you were instantly cast to a yacht and the good life – wouldn’t you do it? There is always time to change your life. You don’t have to “settle” because you weren’t picked first in life. Everyone starts the same and ends the same. Its what you do in between that matters.

    Don’t blame the “successful” for being successful. You have two options in life, either accept defeat or grind. You control your destiny and that of your next (potential) generation. What are you going to give today to reach the top…

  16. SAT & ACT isn’t full proof, but it’s the most meritocratic method by far. It’s akin to judging a player on NFL combine results. A good measure of who’s likely to do well. The elite universities will never allow admissions strictly based on standardized testing and GPA alone. They don’t want their student body comprised of Asian majority.

    1. Sorry, but you can still game both of those without paying a bribe.

      E.g., if your kid is classified as a certain type of learning disabled they can get significantly extended time in a private room to take those…drove one of my kids nuts when he saw a classmate get that deal.

      And of course it helped boost that classmate’s score, substantially.

  17. I am the father of a 4 year old and we are saving $10k a year for his education. My wife went to a very good state university and I, via a ROTC scholarship, went to a private university. We hope to have $200k for his education. We moved to a town where the property taxes are high but so is the quality of the education.

    I am starting to wonder more and more if it will be needed, but at least we will have the option to help him out more than our parents were able to help us. My wife had a lot of financial aid. My boy may be able to get his degree online in some form, but who knows. I do know the current system can not go on much longer.i think the next recession will kill it for many universities. Its too expensive for most people today, and while my option would have worked, I am not sure my wife would have been able to afford her degree.

    The other thing I want to bring up is the movie Back to School with the late great Rodney Dangerfield. The Program and Necessary Roughness are two other movies from decades gone by where they dramatized this event, minus the FBI. I expected all of this and assumed it was normal while still being immoral and likely illegal.

    I do think good will come of this, but the rich will be smarter in how they do stuff like this in the future.

    I have one more point to add, as dramatized in the movie School Ties, part of the value of Harvard is the connections. Its not only the great professors, but also the people who go and have gone there.

  18. Unfortunately, can’t say that I blame the parents caught in this scandal. College admission is a rigged system and they are just trying to beat the game like everyone else (except for the clueless who believe admission is a meritocracy).

    Given the fact that 50% or more of incoming classes at elite schools are given to legacies, children of donors, and other students “of interest”, and also affirmative action candidates, no wonder people are doing anything that they can to level the playing field and/or likewise game the system.

    Fact is no one can make a credible argument against the parents in this scandal without also casting the same stone against all the other inequities.

    1. The parents literally destroyed their own lives and the lives of their children. There are plenty of schools they could go to – maybe just not Gtown, Harvard, Yale, USC?

      I agree with you that the system is unfair to some degree. That said even if it was a completely blind admission policy there are only so many spots. If there 100 spots at Harvard and 200 completely qualified people apply – 100 people have to go somewhere else!

      Many of us applied to schools that we were qualified to attend but got rejected because of whatever reason. We went somewhere else and things turned out fine.

      In my view the parents wanted to brag to their social set or had some misplaced view that their kids lives would be damaged if they didn’t attend X, Y or Z school. Indeed in at least one case the student was an active participant in the deceit. That’s appalling.

      This is a terrible thing for everyone involved. People’s lives have been terribly altered in a very bad way. The only positive here is that it shows everyone the consequences lies and deceit in an attempt to get ahead.

      I think most of the parents knew that it was wrong but thought that the cause was just. That’s the larger lesson for me here.

    2. Forgot to add athletes: Other than the small percentage of schools with money making athletic programs (and even then usually limited to football, basketball, baseball only), why should any school give preferential treatment, including lesser admission standards and scholarships, to athletes. I don’t see the value add to the school, at least not with regards to cost.

  19. Mike@mikesmoneytree

    Is anyone surprised that influencial affluent people have been rigging the system? The world is full of who you know not what you know. Scholarships have always been open to abuse but are allowed to exist due to the extortionate amount charged for tuition to give a chance for poorer families to get a shot at college. I don’t think there is a simple solution to this when universities are run for profit.

  20. I wonder if these 1% parents embroiled in this college entrance scandal have imperiled their own financial futures. Many of them have expensive lifestyles, houses, boats etc and several of them have now lost their jobs.

    1. Yes, all their careers are over for at least the next 5 years unfortunately.

      Probably longer as more will be uncovered. Makes me think about how dependent we are on work and what type of businesses can live on if the owner was caught in some scandal as well.

  21. I feel like your ‘type A go getter’ definition here is quite narrow. Certainly the coastal cities appeal to a band (perhaps a large one) of these folks, but I’d classify someone like Alex Honnold as a ‘type A go getter’ with more drive than most of the folks you refer to in the cities. Some folks just don’t care as much about financial achievement.

    P. S. Georgia “George” Tech.

  22. So you get a legal leg up against other applicants to top colleges just by having the right skin color (Brown, Black)

    But if you happen to be born with the wrong skin color (White, Asian) this is how you have to do it to get in.

  23. “What’s up with crew by the way?”

    LOL. I had to laugh. My wife was on the UCLA rowing crew first team. She is 5’4″ 115 pounds, Vietnamese, grew up with little money (parents were poor immigrants and needed government assistance) and she the team as a walk on.

    As a poor, small Asian female of underprivileged social economic status who made it as a walk on the crew team at an elite university… That’s what I call beating the odds.

  24. Simple Money Man

    Since the foundation has been taking bribes from 2011-2018, it very sadly became a way of business, and the rich and wealthy people accepted it. I’m glad to see this is starting to come to light.

  25. We immigrated to america as teenagers. We were clueless regarding the college admission process. We haphazardly stumbled through it. We wrote terrible grammatically incorrect, culturally irrelevant college admission essays. We had no activities that demonstrate leadership skills. Fortunately we all ended up in decent colleges, and now making top 10% income.

    One of my friend was an immigrant who came to America as 18 years old from an war torn country. No real college would even accept him because he had no reliable high school transcripts. He ended up in one of the lowest ranked state school. But with each step he seized the opportunity to demonstrate his merit. From the state college he was able to get into a good medical school. Being the top student in his medical school he got into the best residency program in the country. Now he is one of the top surgeons in America.

    College is important, but it won’t make or break you. At 18 years old, you still have decades to determine how you will succeed in life.

  26. Flavius Horowitz

    This doesn’t even take into account that these private institutions are wrecking the professional and graduate school level courses with grade inflation and false merit. My daughter’s 3.9 GPA can’t compete to get into med school because some tool has a 4.5 from Harvard. It’s complete B.S.

  27. Work harder


    Great observations and I agree with you on everything – inequality is a baseline and in a capitalistc society money is power … more reason people chase it, lie for it, kill for it…etc.

    Where we might diverge is our opinion about how these people tried to get their kids into college. All of them knew it was wrong. Probably not understanding it might be criminal.

    Fact is it was a farce. So many lives ruiined just to get your kid into a school they didn’t want to go to or weren’t prepared for. Why? Mostly the parents ego! They all have enough money and the kids would have been fine.

  28. Women’s crew actually has a significant amount of scholarship money to allocate thanks to title 9. I grew up in an area where every high school (to include impoverished ones) had crew teams and rowed myself from 6th grade and at a D1 University. Most of the girls that rowed for my high school received free rides. If you are looking for a way to get your daughter an athletic scholarship crew would be my number one choice. Just realize it can be a bit of a cult.

    1. Work harder

      No judgement but I went to a public high school and my parents were very middle class. I had no idea what crew, or squash or lacrosse was. Those sports are another hidden code to weed out non elites. And I am saying this now as an elite. God bless my parents for grinding it out and giving me love and work ethic but in today’s world i would be worse off. No question.

      1. No worries. I was a step away from being homeless growing up and crew was my big break, it was the only reason I got into the school I got into and have the life I live today. Definitely understand what you are saying though, it definitely gets a wrap as an elite sport.

  29. RedactedToProtectTheInnocent

    You clearly don’t understand the dynamics for the players. I know from personal experience as a D3 soccer player at an academically prestigious school, that one kid on the team who isn’t at that level but who has parents donate $1million to the program means a new field, new uniforms, Xbox in the locker room, new weight room, air travel, etc. for the rest of us. And at the end of the day, if he ends up being a super nice guy who has a great college experience… and I get to network with his family professionally… I’m not “enraged” that 1 of 23 roster spots get taken. Heck, there are several recruits cut from the final roster each year, and in this scam the students just wanted admission… not a spot on the team. If it isn’t like football or basketball bringing in revenue, these teams are “cost centers” running on donated money.

    As soon as I saw this news, I wanted Sam’s take because it is the perfect intersection of needing meritocracy coming from nothing vs. buying your way in now that you have the means.

    My own take is that it is unbelievable to me how the general public is under the impression that college admissions is or ever was set up to be a fair system. What is to stop rich people from getting their money together, hiring all the best professors, building a campus, and just not inviting you? That literally was the process before the 1940s. Education has always been for sale in America, unlike in other countries that deliberately set up a state process to identify and promote the best students. I don’t like it at state schools, but I wouldn’t hesitate to pay for my son’s place at a private school if I could “afford it.”

  30. FS, would it be wrong to point out that over 1/3 of the coaches arrested were tennis coaches? If one were the kind to stereotype, one might say that tennis coaches are underpaid which makes them vulnerable to corruption.

    I’m not saying that you, a tennis coach, are easily corruptible.

    I’m implying it.

    1. At my salary of $1100 a month as a tennis coach, I am definitely underpaid. Someone has to be the one to spark joy towards our kids as not even their parents are around since they are working.

      But it seems to me the rowing coaches are the most susceptible to bribes!

  31. Momofthreems

    I don’t ever remember a time in my adult life when being Uber wealthy looked so bad. This just makes these parents look so pathetic and disconnected from the real world.
    What I don’t understand is, what these people are hoping to achieve?

    Our kids know that we will help them make a college choice if they want our input. We will also help them pay for it, as we don’t want them coming out of school with ridiculous loans.

    But, my greatest hope for our children is that they learn grit and self determination, and find their way to financially comfortable and satisfying life.

    I just find it shocking that parents who have so many resources don’t care about the kind of human beings they are raising and are ok with sharing the message that “cheating is ok because we’re 1%ers”.

    Just gross.

    1. Hmm…. “cheating is ok because we’re 1%ers” – I’ve seen a lot of articles, postings, and politicians vilifying the “rich” as evil, manipulative, don’t pay any taxes, make their money of the backs of labor, live by a different set of rules …

      Then I researched it and found out the “rich” 1%ers make over $422K per year, and I’m one of them – barely, but I’m in that group.

      I don’t drive fancy cars, I don’t vacation in the Hamptons, and Warren Buffett doesn’t return my calls. I would classify myself as the working 1%. Keep in mind that there is a broad range of 1%ers and we are all not millionaires or billionaires.

      For the record, I have 2 kids in college, and there were no payoffs or bribes involved. College is expense enough without them.

    2. Yes gross is right. But you’re talking about kids SO used to entitlement- they know no other way.

  32. There are very high status people in the list (Emmy winners, Pimco former CEO for example). Shouldn’t these kids be able to get into at least one Top 30 school based on the parents’ names alone? Can’t believe how competitive college admission has become since I went to college. I was seriously thinking of relocating to somewhere less competitive than the Bay Area when my kids start grade school.

    1. Little Seeds – I can’t imagine how brutally competitive Pre-K through elementary is in the Bay Area. My family of four (two kids under 3) have basically been laughed out of DC with what would be considered a very high income most places in the country. The Bay Area seems to be 3X as expensive as DC so my guess is you would need to have an income of $1M+ to raise a family with any type of dignity.

      We are going to move to the Main Line suburbs in Philly. Philly suburbs have great public schools and similar fancy private schools . It appears that simply being able to afford the tuition and pass a basic standardized test will gain your child admission into a very well connected institution. Globalization has crippled former industrial powerhouse cities like Philly which we view as an opportunity for superstar city refugees like ourselves. I agree with Sam that if the first 20 years this decade was the rise of the superstar cities, the next 30 years will be the “Rise of the Rest” in America.

    2. The list of clients are obviously the “lower middle class” among the super rich/powerful echelon. As always it is the “middle class” that suffers even when the “economy” grows.

      50 years ago they probably could have just used the “backdoor” to send their kids in by donating the money they have spent on bribing. But globalization makes the backdoors much more competitive now. They are no match for the tycoons of Asia or princes of Middle East.

      This “lower middle super-rich class” who neglected the education of their kids are facing the challenges from all sides: affirmative action, hard-working Asian kids, and the global ultra-rich and famous. It’s so ironic, isn’t it?

    3. These people are so out of touch with reality. Formal education means less and less every single day as the internet grows. 1 of the students mentioned has a YouTube following of over 2 million subscribers and yet the parents decided she should go to USC and the girl mentioned herself that she didn’t even want to go and is unsure how much class she’ll actually attend. But then I took a step back and thought about how people already pay $ to go to school, so what’s the harm in paying a bit more to guarantee acceptance? My question for all readers on FS and Sam himself is if you were the judge, what would be the punishment, who what and why if any? Just curious, thanks!! You all rock

      1. I thought the same thing about this story. If the mom hadn’t interfered, the girl would have made out just fine with her YouTube channel. She wasn’t that interested in college, and how was she going to do the classwork when she got there? Was mom going to pay to get that taken care of, too? It would have been so much better to just let the girl follow her own path. It seems like she was doing pretty well. Maybe she would have just kept on with YouTube. Maybe she would have been interested in college at a later date and would have figured how how to attend. Maybe she would have been able to go from YouTube to another career without college. The way things stand now, she’s lost her commercial endorsements, she’s not going to college and neither is her sister, and mom has been arrested and lost her acting jobs. I feel like it’s just a sad case of helicopter parenting gone wild.

  33. You mean to tell me that wealthy parents are writing big checks to get their kids into great schools??? Shocking. Just shocking.

    1. I’ve commented before about my oldest son- a Yale grad. He was accepted on pure merit. We didn’t know anyone and are not a minority , nor was he an athlete. Back in 2002-2006 total cost was $50,000 per year . He was recruited to work at a top investment bank as Yale is a target school. He earned back his total cost of attending college in the first 18 months of his job. Apparently Yale sent an email to the entire Yale community about this latest admissions scheme .

      A few of the schools listed have difficult workloads – not sure how these kids would have done the class work. In addition thinking that for the kids who didn’t know what their parents were up to, their parent child relationship could be facing some tough times ahead.

  34. Have you figured out yet, all the best people are hardly that?

    “Oh this old place has had an
    illustrious past. In its heyday it
    was one of the stopping places for
    the jet set, even before anybody knew what a jet
    set was. We’ve had four presidents
    who stayed here, lots of movie stars.”


    “All the best people.

    1. Indeed. Wherever you look, you find evidence of major institutions and institutional life being destroyed and rebuilt: politics, government, media, universities, higher education…

  35. The biggest problem with the exorbitant cost of a private education is that parents don’t realize how worthless a college degree from an “elite” university will be in ten to twenty years.

    It’s exactly like paying for a taxi medallion business in 2009. Taxis were a guaranteed monopoly for GENERATIONS, so it seemed safer than cash. Of course, the reality is anyone who invested in taxi medallions was the sucker left holding the bag when Uber came on the scene.

    1. Rudiger – I disagree with you. The value gain isn’t derived only from a higher income job, but from the pedigree of people you can network with. Most people at these schools come from extreme wealth and power where a typical wage slave job isn’t even a consideration.

      Even the individuals that do become highly paid professionals will have the influence to pass laws that prohibit the automation of their jobs. Doctors, lawyers, and bankers will absolutely lobby the gov’t to maintain their status in society and prevent robots from doing what they do.

      Doctors are highly paid in America and health care is very expensive because there have been laws passed to prevent nurses from making even routine decisions.

      1. Sorry, but it’s entrance to the really exclusive prep schools that counts.

        If you think you’re going to network with the upper strata once you get to Yale or Harvard, you’re already way behind. Unless you’ve gone to Andover or Exeter, the Ivy colleges are quite likely to be (socially) a waste.

  36. HardWork Matters

    Thanks for sharing your thoughts and observations. We are also struggling with the decision about public or private school for our young child. I went to public school until college and turned out fine. One thing that helped me was that no one gave me any false pretense that hard work wasn’t required. I’ve lapped plenty of Yale and Harvard grads (who frankly were a lot smarter than me) because they just couldn’t or wouldn’t put in the hours and never had enough “gas in the tank”.

  37. Christine Minasian

    What a great article Sam! This broke yesterday and you worked so quickly to post this!
    In the state of IL- which is known for corruption within our city for years and years- even Univ. of Illinois got in trouble a few years ago for handing out “scholarships” to well connected Politicians in Chicago. So it happens even in the public schools sadly.

    I’m SOOO glad the FBI worked on cracking this! But a friend of mine who’s husband is in the government in DC told me years ago that using connections to get their kids into certain colleges is the “way it’s done out here in DC”….I was about to throw up!!!! Not fair is right to the middle class white kid who works their butt off as stated by one of your readers.

      1. Christine Minasian

        I can HONESTLY tell you as a parent that you DO NOT want to put your kid somewhere they do not belong or cannot grow and thrive! It will crush your kid in more ways than one. Most parents abide by that I would hope given the level of harmful anxiety now a days.

        1. Sounds logical. Can you provide an example?

          It doesn’t seem like an elite school is much harder than a lower ranked school. But maybe it is b/c the kids might be more academically gifted, so it’ll be harder for any kid to get good grades, especially if there’s a bell curve.

          1. HardWork Matters

            My wife went to private school (high school) and then an elite college. I went to public school until college. She says this about her private school. It was very hard but made college seem easy. It seems to me that this is one case for going to a private (high school) or where the public schools are not up to snuff (like DC).

          2. Christine Minasian

            We have a great connection at a great college. I knew my child could not get in on her own. I felt she would be “treading water” at that college and I wanted her to feel she did it on her own! Thank God I did that because all of this is coming out and it confirms it as a parent- let your kid be “average”.

            I also like your comment about everyone scratching to do whatever it takes to get ahead….so exhausting in our country!!!

    1. My wife and i attended some open houses for a couple of the top private K-12 schools in DC. Here is the breakdown:

      There are several hundred ( probably thousands) of DC families with the financial means to be able to afford the $30K+ tuition for the 20 available Kindergarten slots. The schools further reduce supply by admitting 50% diverse applicants. So now you have thousands of wealthy people competing over 10 open slots. Maybe reduce that number further after factoring automatic entry for children of politicians and other extremely powerful people. How could you possibly objectively narrow down a list of thousands of equally qualified 5 year olds to less than 10?

      Answer: Whoever has the biggest checkbook. My guess is the $30K+ tuition price tag is artificially low to avoid public backlash and increase demand to effectively create a bidding war for admission. Between consultant fees, kickbacks, bribes, and donations, my guess is that really costs several million dollars to keep your child in Sidwell Friends or St. Albans over the years.

      My brothers neighbor is a DC lawyer making $1M per year with a relatively modest house. I was confused as to why he was still working in his late 40’s and the answer was he had 3 kids at Sidwell Friends. My guess is the price to play at Sidwell is consuming a significant portion of a millionaires annual income.

      Anyone from humble beginnings immediately figures out that the game is rigged as soon as they move to a superstar city. Everyone is equally as smart and hard working but some people came from much more privileged backgrounds. I’ve met people whose parents purchased $800K condos for them all cash. People that have so many connections that moving up the ladder requires zero effort.

      At best, the big city is an unsustainable 10-15 game of accumulating as much wealth as you can before some younger, hungrier version of you comes along and eats your lunch. If you are lucky, you start at the beginning of the economic cycle and can ride the wave of rapid real estate appreciation and job growth. Moving to a big city in the past couple of years is going to be incredibly unfortunate timing for millions of young people that will be buried in student loan debt and depreciating real estate values for decades.

      1. HardWork Matters

        Further to your observations about DC:

        Lawyer: 1m probably not what he made at the outset of his career. 1m is 500k after taxes. 250k a month of expenses is not outrageous (property tax, cars, vacations). Then 50k or 50k*2kids per year for tuition. Late in his career he’s saiving 100-150k a year. The math is simple. He’s not retiring until they force him to and has likely very little savings outside of his retirement accounts.

        The DC system is also rigged because NCS / St. Albans etc have feeder schools. No one can possibly justify paying 35k for their kids 1st grade education *except* for the fact that you will have a guaranteed slot rather than fight it out with thousands for the 10 slots that open up in 9th grade.

  38. Ten Bucks a Week

    Thanks for spending the time to quickly write this up. It indeed makes me more proud of my public education.
    On points 8 and 9 I believe they are very true. Smaller not necessarily meaning Heartland, but the hip cities. I think the big cities reach capacity and then “explode” so people move to the next hip town. Bay Area, New York, and Seattle I see as exploding and giving rise to Austin, Portland, Denver and more.

  39. fun in the sun

    Colleges in the US has enormous resources and departments dedicated to the legal bribery channel. They track rich people’s children, and request bribes as the children get to teen years.

    These people may not have even known the firm they used was any different to the endowment departments at colleges.

    It’s always surprising to me people can be outraged by paying $500k in bribes to gain their children entry, but a $500k donation to their school which their child also then attends is considered above board.

    Both are wrong. Other countries have stricter exam based entrance to their elite colleges. It removes discrimination issues, and the rich people have to pay for lots of tutoring for their children instead.

    1. True, although it now requires a much larger donation to get your kid in. $500K won’t cut it to the admissions office. We are talking more like $5 million and up nowadays. There is a committee of officers that need to be swayed, whereas there is only one head coach.

  40. Really interesting post Sam. I am not sure how this is different from the wealthy bribing themselves into elite colleges by buying buildings or creating foundations as you mentioned. It is far easier and more acceptible to “donate” to the university of choice with which I am sure it is implied that your kid will get in because of it.

    Given that option I wonder why these folks chose to utilize a more obvious route of bribery that got them caught in the first place.

    The whole process smacks of elitism. Impressed that there was a task force to even suss this out as I am sure all the guilty involved were very well connected.

    1. It comes down to costs. $500K is cheaper to spend on a bribe than $5 million or $10 million nowadays to buy the admissions committee. All comes down to economics and personal finance!

      1. For most, this is a status game. The social prestige and network advantage gained from attending an elite school is tremendous. Anyone saying otherwise is being disingenuous.

        These elite schools used to be for only the rich/connected with a few spots available for the extremely gifted. Recently, many of the spots for the rich/connected have been but up for grabs. Now we are seeing an arms race between the rich and the middle class (being newly empowered with access to good advice and availability of debt/financial aid). Both groups are trying to game the system. The middle class will make extreme sacrifices in time to game the system (creating test prep cultures, etc). The rich will sacrifice large amount of money (donations) and time but will sometimes resort to cheating if necessary (the middle class would also cheat if they could figure out how to). Those without access to good advice (usually the poor) are left out of the arms race. To correct for this, things like affirmative action are created (which also end being gamed). Man is a social creature first or foremost and so money without status rarely does it for anyone but the most cynical and antisocial.

  41. Dave @ Accidental FIRE

    This doesn’t bug me as much as the “affirmative action” against a minority group – Asians, at Harvard. Discrimination based on race is morally wrong every time, just wrong.

    1. Yeah, it bums me out that if we are going to accept affirmative action, let’s use it for all minorities. Asian Americans account for less than 6% of the US population, so clearly, Asians are a minority. But I understand the goal of AA to help more folks on uneven playing fields get ahead. It’s just too bad some people lose in the process.

      The Manuel Henriquez example is confounding though. He is the Founder & CEO of a publicly traded specialty finance company called Hercules Technology Growth Capital. He and his wife paid $400,000 in May 2016 to bribe Georgetown University head tennis coach Gordie Ernst to accept their older daughter as a supposed recruit. In other words, even an extremely wealthy man from the Dominican Republic whose children would benefit from affirmative action felt the need to cheat. That is just nuts IMO.

      Just got to focus on improving oneself.

      Related: The Importance Of Feeling Consistently Uncomfortable For Personal Growth


        Boland says college athletics have become too controlling of the admissions process and take opportunities away from scholars to make way for talented athletes instead.

        “So many people get absolutely furious about affirmative action against racial minorities, but there are more students who benefit from being children of alumni or student athletes than there are benefiting from affirmative action,”

      2. Affirmative action is supposed to correct for “past harms”. Including Asian Americans in affirmative action programs is nonsensical given that “half of Asians ages 25 and older (51%) have a bachelor’s degree or more, compared with 30% of all Americans this age“ and “The median annual household income of households headed by Asian Americans is $73,060, compared with $53,600 among all U.S. households.“ What “harm” needs correcting?

  42. Why didn’t these parents just donate directly to the school instead?

    Donating to the school doesn’t guarantee admission if the kid is dumb as nails right? It’s only an advantage if your kid is stacked against another kid who’s a notch or two better? Say you donated $500k and your kid has a 4.0 and against a kid with 5.0 GPA or even 6.0 GPA. Both volunteered but the other kid also had a few more extra curricular actives. Then the donation comes into play. I’m guessing the parents went this route because they were desperate to get their child into a top school because they have no shot otherwise.

    1. $500K can’t buy your way in anymore. It could maybe in the 90s, but today, the cost is 10X or greater to buy the admissions committee. I have spoken to many very wealthy parents and alumni of such schools who are on the fundraising committee.

      1. So what they did was much a cheaper way of getting in had they not been caught. If Singer started this in 2011, there are several kids that have long graduated, hopefully.

  43. I don’t think there is backlash against what you described as affirmative action for the wealthy because most people come to expect that the wealthy play by a different set of rules and have benefits most people don’t have. Therefore, when there is a higher percentage of legacy or wealthy students getting into elite universities, the general population doesn’t make a peep since it’s totally expected.

    The other reason might be that when a middle class person reaches the level of being considered wealthy, hopefully, then this newly minted wealthy person can also benefit from the special rules. There is probably a little feeling of it is hard to destroy the system so many people have taken advantage of if you don’t get a chance to do the same beforehand.

  44. Getting into a top school as the ones named in the article sets you up for life through the alumni network. My friend who graduated from Cal Berkeley in applied arts now works at a tech company as a TPM making 6 figures. The company consists of mostly Berkeley graduates. See how that works? Even if you make it graduating from a CSU in California you probably did it on your own with very little connection versus going to a school like Berkeley or Stanford.

    Why private school? Private schools offer benefits for dumb privileged kids. Less likely to flunk out. Can change majors on the fly. Get any class you want. Be a 5th or 6th year senior.

    For some industries and companies, that piece of paper from a top school will always mean something.

  45. I grew up poor, brown, and under-estimated in the seemingly egalitarian Bible-belt. I can’t recall anything more traumatic and simultaneously motivating than the implicit and explicit segregation that I experienced.

    I feel lucky that I stumbled into signaling tools and market opportunities that have helped me build a strong foundation of knowledge and wealth building assets.

    The question I struggle to answer – what are the signaling tools and market opportunities we need to be cultivating for the next generation so they can build wealth?


    P.S. I love the philosophy behind Lambda School, but I suspect they are just applying financial leverage to a labor arbitrage opportunity…which as far as I can see is not durable.

  46. You are missing the impact on white middle class people, who neither benefit from white privilege of the elite, which you should note is markedly disproportionately a jewish elite given jewish people are only ~2% of the population but 25-30% of the Ivy League – nor the race-baed affirmative action. The net result is white gentiles, at 60-65% of the American population and descendants of those who built this country, are the most underepresented group at these schools due largely to the double impact of legacy admission and racist affirmative action.

    Why can’t we design a fair, unbiased, meritocratic exam that everyone takes and the top scorers go to the best schools, like in Japan. It can be a dual IQ and EQ test designed to capture the essence of raw ability and effort to date as well as the personality and behavior requisite to succeed in white collar professions. At least it would be fair and everyone would be given the same opportunity.

      1. Ok, take out the 1700s, 1800’s slave labor.

        How come some countries advanced technologically, culturally, scientifically, and the like at LITE SPEED compared to other countries over the same 1000 years? Let’s say 700 AD to 1700 AD.

        Slave labor cannot be the only factor.

      2. Actually slave labor held the South back while the North industrialized.

        America has done so well because of the Protestant work ethic that was built into its founding principles (whether the founders were Christian or not). Thereafter immigrants came here to make something of themselves and to escape poverty.

    1. Jewish are 25~35% of Ivies? Hahahaha.

      I personally saw tons of white kids get legacy benefits. Blacks weren’t even allowed into many universities until a couple generations ago and Asians get neither underrepresentation nor legacy.

      Yet you have the gall to try and say you’re the worst victimized? Hahahaha.

      Since you believe in conspiracy theories about jews and whites built the entire country, just go out and vote for Trump again.

  47. I can’t believe the bribery is so widespread. I blame William Singer, mostly. He saw an opportunity to make a business out of the parents’ desperate need to help their kids. He made it too easy to cheat. Most of those implicated probably wouldn’t have done it by themselves.
    They should have read this blog. Then they’d realize that donating directly to the university is a great way to improve the odds.

    1. That is true. These people should just donate to the schools. Especially the private schools then take that into account. Lori Laughlin spent $500k on bribes and photoshopped her daughters rowing. They must have been really terrible students, because if you gave the school $500k in a straight donation that would go a long way into getting them in.

        1. Financial Padawan

          Let’s assume FS is right and a $500K direct donation doesn’t carry much admissions weight, especially at schools with large endowments.

          Rather than pay a $500K donation (or bribe to Key Worldwide), wouldn’t the easier and more effective route have been for these elite/celebrity parents to invest the $500K instead in tutoring, etc, so their child can actually earn their way into an elite school? If $500K of tutoring isn’t good enough to get your kid into Yale or Stanford, then they probably shouldn’t be going to Yale or Stanford…

          And once they get in, would these parents need to pay more bribes to get their kids’ grades changed at these elite schools, would they just get “passed through,” or would the kid flunk out?

          I get that the network connections at elite schools are pretty powerful, and maybe that’s the reason these parents did this — or maybe, the parents didn’t want the shame of their kids not getting into an elite school — but otherwise, not really following the logic of why these celebs and execs were doing this? Just because they could?

        2. Bribes are illegal and immoral. But they don’t happen 100’s of thousands times a year. What is forever striking to me is from your (Sam’s) post from a few years past re the massive difference in placement test scores based on race (for ex. the avg test scores for admission for Asian Americans is several hundred points more that other “groupings” of people. Secondly, hard working, sacrificing, successful American’s are subsidizing others by paying full fare minus academic scholarships – which is the reason why tuitions are going up 2x-3x inflation rate – to get more money from successful, saving Americans. Importantly, these two things are happening MILLIONS of times per year. I find that wrong if not immoral. But I’m just a public school kid (unlike the real AOC who went to a hypocritically elite, private $70k+ university), who has tried hard, worked hard, sacrificed more and saved money my entire life since age 11. Despite the national narrative, we absolutely remain a society where a positive, can do attitude, strong work ethic, high character, and willingness to learn can and likely will (not always) get you anywhere you want. And the good thing about all of those traits – they are all personal choices. If every capable person chooses those traits, we as society can then fully take care of the ~10-15% +/- in society (the “not always”) that truly needs our help.

          1. If it makes you feel better, paying $70,000 a year to attend Boston University when you can attend Harvard for less does seem like an optimal financial move unless you are really rich.

            Yes, it sucks for Asian-Americans, especially the poor ones given they don’t benefit from affirmative action nor do they benefit from affirmative action for the wealthy.

            But the only thing we can do is just try harder. I love how we can all create small businesses now on the Internet. That is democratization.

    2. I don’t believe there’s a “strange reason” that race-based affirmative action doesn’t include Asian Americans. Affirmative action doesn’t promise that all members of a minority get acceptance, just under-represented ones. There are high-achieving Asian Americans (of whatever socioeconomic background) in most competitive academic programs, often beyond what their population demographics would require if affirmative action did apply. Poor students of all races tend to be underrepresented because it’s difficult at the college level to make up for years of being behind your age group peers in schooling.

      1. Poor students aren’t behind because they’re poor. It’s almost entirely cultural. Asians value education and hard work. It is an expectation that their kids will work hard and do well. Thus they are more educated than their peers which is why affirmative action is used against them. (Asians are by far the most impacted by affirmative action).

  48. I think there is real pressure on these parents to get their kids into these elite schools. Pressure and stress cause people do crazy things. So they wield their biggest power – Money. Additionally, there is real pressure on these kids to over perform and unfortunately a lot of them get addicted to things like Adderall and/or Ritalin so they can do superhuman things.

    My boss has three boys in high school and junior high and his goal has always been to save enough money so that they could go to a top performing state school on the low end or his alma matter a private state school. His oldest has earned his way into applying to some elite schools and he took him on a tour of Notre Dame recently. Additionally, he explainrd to him that he’s on the hook for anything above what they’ve saved. His son is coming to the decision that the extra cost might not be worth it

    1. ” unfortunately a lot of them get addicted to things like Adderall and/or Ritalin so they can do superhuman things”

      Yes..this is a huge problem and needs to be cracked down. My kids who were in college tell me that kids brag about taking this and getting A grades. THis really hurts the ones who work their butts of and especially when the prof decides to “curve” the exams. Also some students who have legit prescriptions for these drugs because are selling them to those who want to be “superhuman” THis is happening at state and private schools.

      1. Yeah, it’s a big issue.

        I’m glad to hear your kids are honest with you about what’s going on. That says a lot to the relationship you’ve built with your kids.

  49. Fascinating!!!!!! This is the first I’ve heard about the investigation. I’m not surprised there are people out there making bribes but I am surprised they caught so many all in one go and they were all arrested. I’m glad this was uncovered! The student who got in who didn’t even play soccer – omg that is just disgusting. If I was a soccer player I would be enraged at that news.

    The graph highlighting the difference in price changes of textbooks versus non is shocking Too. Why the heck are textbooks that much more expensive? Makes no sense.

    Thanks for highlighting this and I love your 15 points. Great way to look at things!

    1. RedactedToProtectTheInnocent

      You clearly don’t understand the dynamics for the players. I know from personal experience as a D3 soccer player at an academically prestigious school, that one kid on the team who isn’t at that level but who has parents donate $1million to the program means a new field, new uniforms, Xbox in the locker room, new weight room, air travel, etc. for the rest of us. And at the end of the day, if he ends up being a super nice guy who has a great college experience… and I get to network with his family professionally… I’m not “enraged” that 1 of 23 roster spots get taken. Heck, there are several recruits cut from the final roster each year, and in this scam the students just wanted admission… not a spot on the team. If it isn’t like football or basketball bringing in revenue, these teams are “cost centers” running on donated money.

      As soon as I saw this news, I wanted Sam’s take because it is the perfect intersection of needing meritocracy coming from nothing vs. buying your way in now that you have the means.

      My own take is that it is unbelievable to me how the general public is under the impression that college admissions is or ever was set up to be a fair system. What is to stop rich people from getting their money together, hiring all the best professors, building a campus, and just not inviting you? That literally was the process before the 1940s. Education has always been for sale in America, unlike in other countries that deliberately set up a state process to identify and promote the best students. I don’t like it at state schools, but I wouldn’t hesitate to pay for my son’s place at a private school if I could “afford it.”

      1. You are spot on. Money has and will always rule. (Fairness/unfairness is not a factor)

        Unfortunately, creepy power mongers like Bernie Sanders, AOC and Cory Booker use this reality to sell snake oil to America’s citizens that, somehow, they will fix things if only we elect them to power. These are the very swamp creatures who tell us they can drain the swamp.

        Sam is right, stories like these make money look bad and encourage Socialism.
        I can see the AOC quote now: “Hey if college was “free”, these things would not happen”

            1. My eyes are rolling so hard right now, you could put a UPS truck on them and they could deliver packages.

      2. I think countries should invest in their citizens. I am not going to pretend that I am shocked about the scandal. What is surprising is how far this went. Why not just pay for private tutors? Or transfer to a more prestigious university later and donate money directly to the school if this is the road you want to take.

        I will not pretend that money didn’t play a part in all of this. Money matters. I am not a romantic about money and I understand its value and the need to have it to pay for life’s necessities…but for bribery into a university!!??? That money could be invested for your kids future. Start a business. Buy stocks or Real Estate. A degree can be worthless if you do nothing with it. But other assets can go up in value while you sleep. I’m just saying.

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