Disappearing in the Middle

That bastion of liberal democracy, that foundation of American society, the middle class, is being threatened on two fronts--and from history we are well aware it is disastrous to fight such a war.

First, there was Bush's recent tax cut speech. Well, no one can say the middle class didn't see it coming. But if this $1.6 trillion behemoth actually crashes to earth, the effect on the middle class will be catastrophic. With 40 percent of the reductions being absorbed by the wealthiest one percent of American families and with inequality on the rise since the 70s, the tax cut alone may reduce the middle class to memory.

But we're facing hostility on the home front as well. Harvard announced a 3.5 percent increase in college tuition last week--the first time in nine years that the annual percentage increase has risen. Okay, so our tuition has gone up again. Nobody expected it would fall. And with the increase in financial aid--that extra $2,000 they tossed our way--nobody should be complaining, right?

Well, no, actually, that's the problem. What high tuition and high financial aid is supposed to amount to, essentially, is a progressive tax on higher education. The more you can pay, the more you do, just like income taxes. But, unlike income taxes, the percentage of your income you pay declines dramatically after you pass a certain mark. In other words, someone whose family is very wealthy will find that Harvard tuition eats up only a small percent of his or her family income. Someone who is on that mark (where Harvard determines your "need") will find that Harvard tuition has a dramatic effect on his or her family finances.

In fact, Harvard tuition acts more like a regressive tax, penalizing those who are poorer, up until the point that you qualify for financial aid, at which point you, at least theoretically, have all your need met.

Regressive taxes under George W. Bush's new plan, regressive tax under Harvard's tuition hike--now do you see the problem?

Well, maybe you don't see the danger to our democracy. Briefly, the more inequality there is in society, the lower the likelihood of democracy. Hence Jefferson's ideal of an agrarian utopia.

Maybe in America we're immune from the dangers of inequality because of our wonderful democratic ideology or our tremendous social mobility (how tremendous will it be if the estate tax is rescinded?). But do you really want to bet on it?

The rising tuition will never be able to amount to a true progressive education tax, at least not unless Harvard starts charging tuition like the IRS. Instead, higher tuition will simply crowd out the middle class, reducing the numbers of students whose families benefit most from going to a less expensive school that requires fewer loans and that allows their families to make smaller payments. (More needy students face an equal burden of loans at Harvard as they would a public school because they receive full financial aid and accept a full loan burden wherever they go, provided they receive competitive aid packages).

Unfortunately, we don't know how threatened the middle class currently is at Harvard. While Harvard releases figures on racial and geographic demographics of undergraduates, it does not release figures on family income. It is hard to tell what the 70 percent of the student body on financial aid represents. All we do know is that the average grant Harvard gives is around $18,000 (it will be $20,000 next year reflecting the aid hike). We also know that only 50 percent of Harvard students are on Harvard aid. Twenty percent receive federal aid and work-study but not Harvard money. Those students, who don't qualify as "needy" are, to some degree, the middle class. Harvard has a tendency to lump these two groups together when it claims that 70 percent of Harvard students receive financial aid.

One indicator that Harvard has wider wealth disparities than America as a whole is the percentage of students it enrolls from public and private schools. Thirty-four percent of the Class of 2003 comes from private schools, but according to the Department of Education, only 9 percent of American high-schoolers attend private secondary schools. Assuming that students from private schools have higher family incomes than those at public schools (even though many suburban public schools have very wealthy student bodies and many urban private schools--parochial schools in particular--have poorer students), this is much greater wealth inequality than that existing in our nation.

At least, one might say, Harvard's financial aid policy contributes to social mobility. And, as our "President" would have us believe, maybe high income inequality can be mitigated by high income mobility.

But I believe, like Jefferson, that the basis of our democracy rests on the solid shoulders of a substantial middle class. I believe there is something inherent about equality that fosters and reinforces democracy in a way that social mobility cannot. Until Harvard reduces its tuition burden for the precious middle, and until George W.'s tax cut crashes and burns in Congress instead of on earth, I'll be crossing my fingers and hoping against extinction.

Meredith B. Osborn '02 is a social studies concentrator in Leverett House. Her column appears on alternate Fridays.