After publishing my post, The Wide Implications Of The College Admissions Scandal, one recurring question was: Why didn't these parents just donate $500,000 to get their kid in legally instead of going the illegal bribe route?
The answer is simple: $500,000 is simply not enough to bribe legally an entire admissions committee. Let's say there are seven people on the admissions committee. Some will undoubtedly want more, some will likely refuse until you give the school a whole lot more.
Therefore, instead of just a $500,000 bribe per child, you'll likely need to donate $5 million or more to get into the legal realm. Thus, these parents logically viewed a $500,000 bribe as a 90% discount. Great value if you don't get caught.
Bribing Your Way Into A Top University
Competition to get into a top U.S. university is fierce nowadays. You know it's fierce when even rich and famous white people have resorted to spending $500,000 on average bribing university officials to get the a leg up.
I've ranked the top 50 national universities in the chart below using various college ranking systems as well as my own judgement.
For your $500,000 average illegal bribe, you want to target a top 25 school to get the most bang for your buck. For your legal $5 million bribe, you should definitely aim for a top 10 school.
When I was in high school, the smart rich kids went to Ivy League schools and other top 25 schools. The reasonably intelligent, middle class and poor stayed in-state and attended UVA, William & Mary, and Virginia Tech. While the rich kids who couldn't get into a top 25 university or the better in-state schools attended the University of Richmond, which is a good school, but its tuition is a whopping $50,000 a year today!
We see the same phenomena occur in many cities around the nation. In San Francisco, you can attend SF State University for under $10,000 a year. But the rich kids tend to go to the University of San Francisco for $45,000 a year. In Portland, you can go to Portland State for less than $9,000 a year. But the rich kids tend to go to the University of Portland for $47,500 a year.
If you now wonder how the heck did some of the kids in your class who weren't very smart or diverse in their extracurricular activities get into a Top 25 school, chances are their parents did some bribing or donating. You just weren't aware.
Private University Kids Really Are Rich
The median family income of a Harvard student is $168,800. This differs sharply from the national median household income of roughly $62,000. 67% of Harvard students come from households whose earnings are in the top 20 percent nationally.
If Harvard was fair, it would only have 20 percent of its students coming from the families of the top 20 percent income earners. But even with a $30+ billion endowment, Harvard is still heavily focused on raising more money.
Take a look at these graphics from the New York Times. The first row of graphics highlights the median family income of attendees at 12 of the top private universities.
The second row of graphics highlights the percentage of students who come from families earning $680,000 a year or more, a top 1% household income level according to the New York Time's definition.
As you can see from the chart, schools like Yale, Penn, Duke, Brown, Stanford, Princeton, Dartmouth and Harvard have a whopping 15% – 21% of their student body coming from families who make $630,000 a year or more.
I'm not sure why they chose $630,000 a year. Based on my research with IRS data, a top 1% household income is closer to $400,000. Therefore, if we use $400,000 as the cut off for a top 1% household income, the percentage of students attending such schools with family incomes in the top 1% would likely increase by 50%. For example, Dartmouth goes from 21% to 31+%.
How Much You Need To Earn To Afford College Bribery
If you want to ensure that you can afford to send your kids to an elite private school, you'll likely need to make at least $1 million a year. With a $1 million a year household income, you can set money aside for your child's college bribery fund.
With the proper investments and savings over a 10 year period, a $1 million a year household could probably increase its net worth by $3 – $5 million. In such a scenario, forking out $500,000 in under the table money to pay off a university sports coach or admissions officer becomes financially possible.
Below is a budget of a household with a $1 million annual income and two kids. They are clearly living the good life.
If this household continues to live the good life, they can put away about $100,000 a year for their children's college bribery fund, in addition to the $60,000 a year they contribute to their children's 529 college savings plan.
However, to bribe their kids' way legally through front door donations, this household would likely need to earn at least $5 million a year for 10 years and/or have a liquid net worth of at least $50 million to afford donations of $5 million or more.
College Bribing Starts With You
Hopefully readers will recognize how rich the rich really are. Private school graduates have an overrepresentation of students coming from wealthy families. And you know many of these wealthy families have helped buy their children's ways into school.
No matter how much a private university says they want diversity and inclusion, what they really want is more money and status.
As a parent, I hope you teach your children that nothing is given and everything is earned. Going the public school route like I did is good enough to be successful in society.
The internet is making everything free. At some point soon there will be a negative signaling affect for those who went to elite private universities.
Related: Scraping By On $500,000 A Year