Posted by: Discover Scholars | July 21, 2008

Response to Reader Comments

Last week, George Mason University economist Tyler Cowen discussed on his blog, Marginal Revolution.  Many readers had some interesting comments, so we figured that we should take a post to respond to those questions and reactions.

Anonymous writes:

But surely if my resume says I graduated from a top-tier university, then it’s in my selfish interest to reinforce the perceived status of that university, in order to maximize my future employment and networking prospects.

Anonymous, you’re definitely right that it’s in the interest of donors to top schools to reinforce the perceived status of that university, but there are a lot of donors out there who did not go to top schools, and (we think) other donors who see value in increased consumer choice.  Sure, some people won’t like what we’re proposing for self-interested reasons, but en masse, we believe more people would benefit from such a system than would be hurt.

Andrew adds:

The first thing they could do is make the website compatible with non-tax-deductible gifts. There may be other ways around the law using some of the education savings plans that can be donated.

Andrew’s got a great idea, and this is definitely on our list of future additions to bring to  It’s possible that donor demand to give directly to students is so great, that most don’t care about receiving a tax deduction for their contribution.  At this time, though, we’ve made the decision that it’s best to start with tax-exempt means before adding the option for non-tax-deductible gifts.

Michael F. Martin asks:

Who’s better at identifying worthy students? If you think that school culture is going to determine who’s a good student, then giving money to schools is probably a good idea.

…but if you think that good students are good students regardless of the culture of their institution, then you might find a better way to donate to those students.

Well, not necessarily.  We don’t think that will be significantly better at identifying worthy students than colleges, but we do believe that donors are best able to determine who should be supported with their money.  It’s true that will have the final say on allocation decisions (a necessity due to IRS regulations), but the fact that donors will be able to direct their money to the types of students they value strikes as massively more efficient than the current system.

Finally, mik asks:

With most secretaries and most realtors having college degrees, if anything we have tremendous over-investment in higher education…

Why throw more good money after bad?

We agree with mik that there’s a lot of extraneous investment in education, and that’s why we believe that organizations like are an important part of the solution.  Unlike many governmental approaches to improving the educational system, we are not “throwing additional money at the problem.”  Instead, we’re hoping to put downward pressure on college prices by separating financial aid from the universities and colleges altogether.  As we attempted to lay out in our original post, we believe this sort of incentive is sorely lacking in higher education today.

Later this week, we’re going to talk further about the true cost of educating students…

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