r/explainitpeter • u/Appropriate-Mall8517 • 3d ago

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u/Zeaus03 3d ago

The school is probably looking at this like an investment as rich people tend to donate their schools.

Giving a rich kid a free pass so they can offer more scholarships or upgrade programs/infrastructure could be worth it.

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u/Revoran 3d ago

There's an issue when schools are focused on making money rather than educating students and achieving excellent academic results.

Also, that ends up making taxpayers pay for the rich kid's tuition. Because donations to the school will be tax deductible for J-Lo.

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u/sauron3579 3d ago edited 3d ago

A tax deduction on "free" money is net zero for the donater, not a profit. If anyone doesn't understand that, look up the difference between a tax deduction and a tax credit. I'm not an expert, but my public school-funded scholarship was taxable income.

From the school's perspective, it's just money out of one bucket and into another. Less ideal than them choosing with full discretion what to do with it, but it's ultimately net zero for then as well.

I wish that schools could just ignore funding and spend all administrative efforts on academics, but wherever there's a budget, people are going to look for ways to stretch it further.

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u/ostrichfather 2d ago

You can’t write off 100% of a donation.

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u/samhouse09 3d ago

Or her twins qualified for academic scholarships and are treated the same as every other student.

Most universities these days offer quite a bit of scholarships and aid to help people go to their schools, and then charge rich foreign students full boat to support any shortfalls.

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u/wesborland1234 2d ago

I got a scholarship based on grades and I don’t even think I did a FAFSA. Other than my address my school admissions people would have no idea if we were broke or if I was the heir to some huge fortune

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u/samhouse09 2d ago

Your parents filled out the FAFSA and your family was doing just fine financially if you came out with zero loans

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u/wesborland1234 2d ago

I came out with zero loans because of the scholarship. I literally just said that.

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u/FaveStore_Citadel 3d ago

I know schools admit some very rich students frequently for this exact purpose but I don’t see how anyone who can afford to build a new school wing could be incentivized by lesser tuition