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The rich get richer in higher education

Recent studies show that 40 colleges hold two-thirds of the wealth, including Harvard, Stanford, Michigan and Ohio state. The divide between rich and poor schools has been growing, with the rich schools getting a 50% increase in assets while the poorer schools only grew by 22%. This growing gap tends to be exponential, because rich schools get more endowments and are able to offer students more. In order for poorer schools to provide the same for their students, they will need to spend a lot of money, which will raise tuition costs, making the payoff decrease.

Further, rich schools have a higher percentage of well-paid alumni, and receive more donations, which further increases the divide. It was found that 6 out of every 10 dollars in private donations goes to these schools.

The top schools are becoming harder and harder to get into- only a small percentage of people get in, 14 in 15 of which are from middle-upper class families. This makes higher education more exclusive and less accessible to people from all social and economic backgrounds. Further, the top schools have much more endowments to offer high financial aid to students, which is an important factor to consider. This leads to more high students applying to these competitive schools, giving them the cream of the top students, who can become extremely successful given the resources the college provides.

This leads to a power law dependence, where very few schools (the top 40 schools listed) have a large fraction of money, and most other schools have much smaller fractions of money, with not very many schools in between.


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November 2015