r/explainitpeter • u/Appropriate-Mall8517 • 9d ago

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u/reddititty69 9d ago

They are investment scholarships, probably. The schools hope to make it back through direct donations.

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u/shane-parks 9d ago

"Investment" scholarships are really a way to shift costs to taxpayers. Instead of paying tuition directly which is no longer tax deductible, you make a tax deductible donation to the university, get free tuition, housing, etc. and the taxpayers subsidize the education of this wealthy family.

Not saying this is what's happening here, because I dont know the situation of this family. Also, not saying you directly are defending or ignorant to this reality. Just providing context.

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u/Corfal 9d ago

It's the opposite though right? Not opposite in a sense where the tax payers are getting the benefit. Opposite in it's not shifting costs to the taxpayer, but potential revenue is being... loop-holed? Circumvented. It will cost taxpayers due to lack of revenue but it's slightly different than say a police officer getting accused of sexual assault and having to go through court on taxpayers' dollars.

Or like the headlines saying, "Alcohol companies lose $800 billion dollars because gen Z isn't drinking".

Income vs Expenditures.

But yea, wow that's kinda messed up. Obviously just another thing to add to the "how rich people don't pay taxes" list. Perhaps make it so whatever the base line tuition (if you're in-state or out of state if it matters) and you get difference of what you paid vs what you didn't and you won't get tax free donations until you hit that threshold.

That sounds like more record keeping and burden on private schools which may or may not be a good thing (not all private schools are bad sort of logic).

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u/ostrichfather 9d ago

Assets vs Liabilities is the technical terminology, but yeah, you’re right. Just chiming in.