Does the Church Over-Subsidize BYU?

by: hawkgrrrl

June 4, 2013

Enter to learn; go forth to toil in obscurity.

My son was recently admitted to BYU for the upcoming fall semester.  Here are some things about BYU we discovered in the application process:

  • BYU is incredibly cheap.  It is about a tenth the cost of other universities he applied for and twice what we would have to pay for an in-state tuition assuming we could somehow qualify as residents having lived abroad for two and a half years.  When room & board and other incidental costs are included, that gap is narrowed a little so that other schools were only 4 times the cost of BYU.
  • BYU students are smart and good looking.  However, given the number of religious schools on this list I suspect the author is particularly hot for Christians.
  • BYU is very selective.  It is not easy to get in like it was when I attended.  In fact, my ACT score (26) was considered “honors” level when I was accepted in 1986.  According to the distribution chart we saw in 2011 in our son’s guidance counselor office, applicants with a 26 ACT no longer get in unless they have a much better GPA than I had.
  • The return on investment for BYU is nearly unbeatable.  See chart (data pulled from CNN study which did not directly match our own calculations which were higher for NYU and BU based on those schools’ websites).
Total Cost to Graduate ($)30 Year Net ROI ($)3 Year Net Return for Grads ($)Annualized Net ROI
NYU                     193,000            729,800                       858,6009.9
BU                     191,000            702,800                       878,5009.8
BYU                       58,450            797,000                   1,009,00014.1

Rise and shout! Your tithing dollars are paying the tuition of the kid who beat your kid out of admission!

My son was admitted with worse grades than I had (and mine were no great shakes) but a significantly better ACT score (33) and as a graduate of a very prestigious international private school.  Even with those pluses, the mission age change may have tipped him over the line.  Based on rankings and prior admission rates shown to us by his guidance counselor, he was on the cusp.

Is College Worth It?

I recently read a great article by James Altucher about why college is no longer a good investment.  He questions the self-sustaining system that encourages us to enter university and follow a specific path, one that has escalating costs and diminishing returns.  By his logic:

  • the return isn’t high enough, and people go into crippling debt to get a degree.  If he [a case study cited] had invested the $104K he spent on college in a savings account with a return of 5% over 50 years, it would have yielded $1.4M.  By contrast, college grads are purported to make on average $800K more over their lifetime than their non-college grad counterparts.  Additionally, the grad / non-grad comparison is not a like for like comparison.  To do that kind of comparison, you’d have to have a case study of individuals who all got accepted to the same school, half of whom attended and got their four-year degree and half of whom didn’t attend college at all.  Nobody has done that study.

He likewise debunks the value of socialization at college because in most cases it consists of sex and vomit.  He decries the idea that college teaches kids to think, making the point that real life experience is what teaches us to think.  On the contrary, he concludes that college is essentially a deferral of real life, and if those 4-5 years were spent in traveling or starting up a business, the individual would be far ahead of peers in career development and income.

But what struck me as I read it was that BYU really is a good investment comparatively.  Tuition is so low that only 31% of students carry debt.  66% of students get financial aid.  And sex and vomit, while not completely absent, are pretty far underground.  I grant him that college is more for indoctrination and light supervision of budding adults than it is for developing critical thinking, and on those fronts, BYU is probably more intrusive than average.

Is BYU Too Cheap?

Which brings me to my titular question:  Is the church over-subsidizing BYU tuition?

  • Tuition is really ridiculously low compared to other schools.  BYU tuition has remained fairly consistent while other schools have increased 400%.  Only 31% of BYU students carry debt!
  • Tuition is this low thanks to tithing contributions, paid for by all members.  Whether their kids attend or not.  And while the number of students admitted remains constant, the number of members subsidizing with no personal benefit has grown.
  • Only 26,000 students are admitted each year, and the bar is higher and higher.  You may in all reality subsidize the education of the kids who took your kid’s spot.
  • Some of those funds could be diverted to help defray mission costs.  The church has recently made a plea for more members to donate to the missionary fund in the wake of the huge influx of new missionaries.

What do you think?  Is college not worth it?  Should we subsidize BYU less now that it’s gotten so much more exclusive?  Should we find new ways to subsidize missions for our youth?

Discuss.

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45 Responses to Does the Church Over-Subsidize BYU?

  1. Hedgehog on June 4, 2013 at 2:32 AM

    I’m hoping that we Brits are not subsidising BYU, given the recent extreme rise in the cost of a university education in this country. I’d have thought it unlikely, considering money in and money out for the country as a whole, though I could be wrong.
    On the other hand, I personally benefited from a golden age, when British students were paid to attend university, and I had a great education and university experience with no debt whatsoever.

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  2. Paul on June 4, 2013 at 6:06 AM

    From the OP: “twice what we would have to pay for an in-state tuition”

    I suppose this depends on the state. Four year state-sponsored universities in Michigan are all twice the tuition (or much more) than BYU.

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  3. Mike S on June 4, 2013 at 8:18 AM

    #1 Hedgehog: I’m hoping that we Brits are not subsidising BYU, given the recent extreme rise in the cost of a university education in this country

    We do know that most of BYU is supported by tithing (around 70% according to most estimates). From BYU’s website:

    Tuition and general fees for all academic programs are established annually by Brigham Young University’s Board of Trustees. BYU is owned and operated by the Church, and significant portions of university operating costs are paid with the tithes of Church members.

    Whether your specific pound is subsidising BYU or not is semantics and accounting tricks. Of an estimated $4-6 billion the church takes in annually in tithing, an estimated $1 billion / year goes to support BYU. You can look at that 2 ways: 1) Around 20% of the Brits’ tithing money goes to support BYU in the United States, or 2) Only tithing money from US citizens is used to support BYU, and the Brits money is somehow kept in a separate “pool” to use on other things.

    I wouldn’t hold my breath, though. According to a link from Canada , where non-profits are required to show WHERE their money went, of nearly $104 million which was taken in in donations, various wards and congregations received between a low of around $20k to a high of over $150k. However, nearly $103 million, or approximately 99% of the total, was sent to BYU.

    So, yes, it is essentially correct that even parents whose children were NOT accepted to BYU are still spending approximately 20% of their annual tithing donation to support students who WERE accepted to BYU.

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  4. Jeff Spector on June 4, 2013 at 8:26 AM

    From what I’ve heard, the tuition in Utah in general is much lower than a lot of places. The tuition here in Colorado is sky high. I am taking a 3 unit online class at the local CC and it is costing me almost $1000.00! That is almost as much as a full year when I went to college, though that was a long, longtime ago.

    Also, not sure you can use the tithing argument, since tithing money is used all of the world for things like Chapels and Temples that most of us will never use.

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  5. Hedgehog on June 4, 2013 at 8:53 AM

    #3 Mike,
    At which point I remember they are published for Britain too. The latest available online for year ending 2011: http://apps.charitycommission.gov.uk/Accounts/Ends51%5C0000242451_ac_20111231_e_c.pdf
    P.15 of the document is probably the most pertinent to this discussion, where it talks about donations to and from the parent. To the parent about £5.5M and from the parent about £4.8M, and coming in at a loss overall for income/outgoings that year. There appear to be legal restrictions on what the church can do with donations to the parent, but I don’t know what those would be, and whether they would include or exclude supporting BYU.

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  6. Hedgehog on June 4, 2013 at 9:02 AM

    Reading further in, it looks like the restricted donations to the parent are based on restrictions on the donation slips for mission fund, temple fund etc. And the church has to agree to use those funds as per the restrictions on the tithing slips. It looks like UK law governing charitable contributions at least protects British members from the vagaries that apparently exist for members elsewhere. It doesn’t look like we support BYU.

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  7. Moss on June 4, 2013 at 10:48 AM

    I wish the church went to some sort of voucher system so all our youth could benefit from cheap(er) college, wherever they studied.

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  8. agnespenny on June 4, 2013 at 11:18 AM

    I have never been more grateful to BYU and to the church for the excellent education that I received there, and the chance to finally be socially mobile as a result. Perhaps college education may not seem “worth it” when you are already coming from a middle class world (with the benefits of having your parents pay for a prestigious private school, for example), but when you are from a lower class of generations of people who work menial jobs just to get by, college education is incredibly important in breaking that cycle. I had the sole responsibility of putting myself through college and I could have never afforded a school with as high caliber as BYU if it weren’t heavily subsidized. Perhaps there are more and more kids there who are already privileged and their tuition could go to helping others less fortunate, but there has to be an option for people like me and countless others that I knew who needed a BYU education in order to finally get our footing in a world where the poor are rarely afforded the opportunity to change their condition.

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  9. Jeff Spector on June 4, 2013 at 1:01 PM

    The misnomer of whether college is “worth” is stems solely from the financing of it, not from the education standpoint. College Grads earn 70% more over their lifetime than non-college grads. However, due to the funding crisis, the cost of a average 4 year College is unforgivable. Private Colleges, forget it! You have a lot of Colleges who are sitting on huge endowments while raising rates on students out of sight. but, cut back on the sports programs, forget that too. Too much ego and money involved in that.

    Coupled with the fact that companies are no longer hiring College Grads as they once did, while also sitting on piles of money, it is a national disgrace.

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  10. Rb on June 4, 2013 at 1:33 PM

    Take it one step further: BYU sports are funded with tithing dollars. If BYU is such a steal, why don’t more people apply? Notre Dame or Georgetown are 10 times as expensive and attract thousands of more applicants with significantly higher entrance requirements. Does the “Honor Code” really scare off that many otherwise cost conscious college students?

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  11. Jeff Spector on June 4, 2013 at 1:59 PM

    one word— Seminary

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  12. tristin on June 4, 2013 at 2:39 PM

    Having spent a very large amount of time as a student at this bastion of liberality, I have the sneaking suspicion that BYU is all that prevents the church and the state–or at least Provo–from being sucked into a black hole of fundamentalism. I think that alone is worth the sliver of the church budget it is granted every year.

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  13. mgy401 on June 4, 2013 at 2:55 PM

    I like Moss’s voucher idea, but I would venture to guess that the Church’s aims in maintaining BYU (and the campuses in Rexburg and Hawaii) isn’t to produce educated people per se, but educated people who also happen to be highly dedicated Mormons.

    What if the Church did implement a college voucher system but made receipt of those vouchers contingent on living the BYU Honor Code and receiving ecclesiastical endorsements, same as the Zoobies do?

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  14. Jeff Spector on June 4, 2013 at 3:07 PM

    While I realize that BYU is the school some love to hate, I might point out that there are probably two or three times more students NOT going to BYU schools than attend them. BYU is just as viable a place for LDS kids to find their eternal companion as getting an education. The Institute program takes care of the religious indoctrination away from BYU.

    I’ve not heard of any imaginary girlfriends at BYU. :)

    Oh, and when the States start issuing vouchers for taxpayer-supported schools, then maybe the Church should consider it…..

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  15. Nick LiterskiN on June 4, 2013 at 3:35 PM

    Your ROI estimates fail to take into account the lifetime costs of a BYU indoctrination. The school, according to its own board of trustees, is highly focused on turning out lifelong devotees to the LDS church. If it does, indeed, increase organizational retention, then future tithing, offerings, income loss via volunteer hours, etc., should be considered part of the “costs” of being “educated” at Provo’s own parochial school.

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  16. NewlyHousewife on June 4, 2013 at 3:54 PM

    It’s subsidized to compete within Utah levels, which are lower to begin with, not national. If they were going to compete on a national scale, tuition would have to be around 14,000 give or take. Since the majority of active members live in Utah, and if they want the school to be remotely competitive within the Utah system, they got to market to that group.

    Most kids also waste their first year, or two, of college figuring out what to major in. I don’t think it’s the cost of education per-say that’s the problem it’s the lack of direction that results in wasted credits in the first place.

    Though as far as the value of an education, I take the rule of thumb a mentor taught me. “Unless you’re majoring in business, BYU is not for you.” It’s just doesn’t have that good of a program for anything else.

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  17. Porter on June 4, 2013 at 4:59 PM

    What good is a higher education without sex and vomit??

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  18. hawkgrrrl on June 4, 2013 at 7:13 PM

    Jeff: “College Grads earn 70% more over their lifetime than non-college grads.” Yes, but to James Altucher’s point (and my own irritation in looking at those studies) we are only comparing those who would never go to college with those who do. The base for those not going to college is already lower. We don’t know what the contribution of the college education was. Maybe it had a negative effect on the best and brightest for all we know. They might succeed no matter what.

    Nick: I know you are being a bit of a devil’s advocate, with good reason, but one thing the church may not realize is that all the transparent indoctrination can backfire.

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  19. hawkgrrrl on June 4, 2013 at 7:13 PM

    NewlyHousewife: As someone who didn’t have Utah residency either when I applied for colleges nor when my son did, the extremely low tuition rates created a HUGE disparity. For out-of staters like us, even the U of U was very expensive by contrast. This is just another reason to say that BYU is over-subsidized.

    They value out-of-state diversity, although certain “Utah-centric” factors help candidates in the admission process: BSA (we had to complete my son’s Eagle in Nepal, getting it approved by a board in Texas via advocacy in Singapore), seminary graduation (my son had to get up at 5am every day for early morning seminary which frankly hurt his GPA), AP courses (these weren’t even offered in PA where I went to school, and only one school in Singapore offered them), and ACTs over SATs (this is not very common in PA, and it was given one time per year; many kids had to drive hours to get to the test).

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  20. Naismith on June 4, 2013 at 7:38 PM

    “Since the majority of active members live in Utah,…”

    ??? Seriously? I thought this had not been true for some time.

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  21. Cynthia L. on June 4, 2013 at 7:45 PM

    @Mike S. “Whether your specific pound is subsidising BYU or not is semantics and accounting tricks. Of an estimated $4-6 billion the church takes in annually in tithing, an estimated $1 billion / year goes to support BYU.”

    What is the source for this?

    I think it would be a great idea if the church raised the nominal tuition but then had financial aid for students whose families can’t afford it. There is no reason for tithing of poor people barely making rent to subsidize the education of the children of multi-millionaires. But for a family really making the sacrifices necessary to support 8 kids on a middle class income–something more rare every year–the church is providing them a huge service by having somewhere their kids can go to college.

    That said, as the school becomes more selective, it becomes less useful for social mobility no matter how cheap the tuition. That’s because the more selective it becomes, the more perks like music lessons, club sports, tutors, living in top school districts, etc, start being de facto requirements for admission. This will naturally screen out the struggling big families before you even get to the question of tuition.

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  22. Paula on June 4, 2013 at 10:33 PM

    I’ve thought for quite some time that either BYU should start subsidizing only students who actually need the support, or only admit students who are needy, and let the rest fend for themselves. Waivers for everyone might be a solution too, but the present situation is very unfair to all the families whose children can’t go to BYU.
    Wouldn’t all those folks who go to BYU now be good examples and missionaries at other schools? Could they possibly help change the culture at some other schools? It’s hard to let your light so shine when it’s huddled under the same basket in Provo with lots of other people who think the same way.
    And, while, yeah, there’s a lot of drinking at most schools, my two sons have had excellent educations and experiences at secular universities.

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  23. hawkgrrrl on June 5, 2013 at 12:35 AM

    If there are students who can’t get in to BYU based on merit, needy or wealthy, they shouldn’t be going to BYU. But their parents’ tithing dollars are subsidizing the tuition of those who beat their kid out of a spot and that is what should not be, not when it is giving those who do attend such a huge financial advantage. As for the 400% rise in US tuitions in the last 10 years, I do think some folks are going to college who should not. There are lucrative careers that can be had without college, and they are stigmatized by our current belief that everyone has to go to college to be successful (just like we foolishly believe that owning a home is a good investment and an entitlement). We consider trade professions and renting as both indicating someone isn’t “smart” or “successful” when in reality, going to college has ceased to be the differentiator it once was.

    The church is still thinking too Utah-centric and not like a global church. Conversely, they can stop admitting students who are Utah residents. Out of state tuition rates at the U of U were similar to in-state tuition rates at ASU. All other schools were at least 4x the cost of BYU.

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  24. Geoff - A on June 5, 2013 at 4:38 AM

    I am not convinced that university graduates make more money than others. Which others- labourers or tradesmen/women.

    Living in Australia none of my children or their spouses went to BYU, but one has a PHD in Physics, one is an electrician, and 2 ore in the Federal police. The police and the PHD make similar amounts (though the police have permanent positions and better superannuation), the electrician not only started earning younger he earns nearly twice as much.

    I would be encouraging young people to become tradesmen/women, or police/ teachers, with secure jobs and good retirement.

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  25. Errol on June 5, 2013 at 5:43 AM

    Students who can’t get into BYU can attend BYU Idaho, LDS Business College or BYU Hawaii. All of them church subsidized schools. The academic criteria for getting into BYU Idaho is much lower than BYU (not sure about the other two). In addition, BYU Idaho has a program called Pathways which attempts to provide a church sponsored education to students in other parts of the world via online classes and the Institute programs. I believe one of the motivating factors for this program was the very issue brought up in the OP.

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  26. Breena on June 5, 2013 at 6:56 AM

    And/or perhaps we could funnel some of the subsidies into a larger PEF and make those funds available to students in the US.

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  27. Peter LLC on June 5, 2013 at 8:20 AM

    “’Unless you’re majoring in business, BYU is not for you.’ It’s just doesn’t have that good of a program for anything else.”

    I hope you found a new mentor, because that one sold you short.

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  28. Mike S on June 5, 2013 at 8:53 AM

    Or, instead of spending our billions of $$$ on universities, shopping malls, hotels in Hawaii, private hunting reserves, etc., perhaps we could act like most other “churches” and actually spend it on charity, helping the poor, preaching the gospel, etc. You know, like they talk about in the scriptures.

    Just my own opinion.

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  29. Justin on June 5, 2013 at 12:31 PM

    Peter LLC:

    I live in a university town that’s outside of Utah — and I can say that 99% of the graduate students in our ward are from BYU and are here pursuing business degrees. So — I too have come to the conclusion that BYU is good for nothing else than business degrees.

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  30. Jack Hughes on June 5, 2013 at 1:52 PM

    Using member tithes to support BYU can be considered a regressive tax; the impoverished, faithful members throughout the world are sacrificing their widow’s mite to subsidize a privileged lifestyle for a disproportionate few. Temples, for example, are a resource open to any recommend-holding member who is willing to make the trip (however long or short it may be). Church universities are not equally accessible to every member who needs education. The Church should be able to sustain BYU through endowment, alumni gifts and nominal tuition rates, without burdening the majority of Church membership who will never receive any direct benefit from BYU.

    Also, they should consider raising the non-member student quota, perhaps to about 10%. This has the benefits of collecting more tuition dollars from outside the Church, while improving diversity of thought on campus, hopefully getting away from the reputation of being a self-licking ice cream cone. Notre Dame, for example, is about 20% non-Catholic, while BYU is only about 2% non-LDS.

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  31. Mike S on June 5, 2013 at 3:14 PM

    #29 Justin: So — I too have come to the conclusion that BYU is good for nothing else than business degrees.

    This is part of the model. As the Church has become more and more like a corporation, it’s leaders increasingly come from a business background – so what better to teach at BYU?

    From a post on By Common Consent, regarding the educational background of General Authorities:

    Terminal Degree Field (out of 101 respondents)

    Business (includes finance, etc.): 54
    Law: 23

    Medicine: 9
    Accounting: 8
    Education (I mean degrees like Ed.D): 7

    So, more than half have a business/accounting background, with nearly a quarter having a somewhat related law background. In fact, out of 101 General Authorities in this post, only 16 DON’T have a business/accounting/law degree. So, in fact, BYU is perfect preparation for a career in life, as well as in the Church hierarchy.

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  32. Jeff Spector on June 5, 2013 at 3:30 PM

    MIke S.

    Maybe, we shouldn’t even have Doctors as Church members. Too analytical and perhaps not spiritual enough….. :)

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  33. Mike S on June 5, 2013 at 3:55 PM

    Jeff: I won’t argue with you, as there is a lot of truth in that. And given my “analytical” mind, I had to look for actual data.

    Almost 52 percent of scientists surveyed identified themselves as having no current religious affiliation compared with only 14 percent of the general population.
    And while nearly 14 percent of the U.S. population who responded to the GSS describe themselves as “evangelical” or “fundamentalist,” less than 2 percent of the RAAS population identifies with either label.
    Read more at: http://phys.org/news102700045.html#jCp

    Someone has to be the contrarian :-)

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  34. Hawkgrrrl on June 6, 2013 at 1:21 AM

    Here’s the ideal solution. Reduce the subsidy to make tuition on par with out of state tuition for the UofU. Then, Utah residents would more often steer clear of BYU because the In state tuition they are eligible to receive is lower, and the rest of us who have much higher in state tuition costs or global students will take those freed up spots at the Y and still feel it was a bargain.

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  35. Jeff Spector on June 6, 2013 at 8:08 AM

    I think it is a mistake to think that the BYU’s are just rich kid’s schools. the whole point of BYU Hawaii is to provide opportunities for Church members in the Pacific Islands to improve their economic situation. And while there are some rich kids, who think that College in Hawaii is cool, many do not last to graduate. At least among the ones i have know who have gone over from the mainland.

    The PEF is another vehicle to serve this purpose. Not sure why Hawk’s suggestion should favor out of state BYU students. I am certain there are financial aid programs at BYU just like other schools.

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  36. Hawkgrrrl on June 6, 2013 at 7:16 PM

    Another downside to BYU-H is that the course catalog is limited. Not all degrees are supported there.

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  37. Stephen M (Ethesis) on June 7, 2013 at 9:02 AM

    They had debates on ending the subsidy and letting BYU become a Mormon USC or SMU where the children of the wealthy meet and marry each other.

    BYU exists to provide a core culture contact and experience and as a part of integrating a global church.

    That is its job.

    The sports program generates net revenue, so killing it ( as attractive as punitive things are) would result in either cutting the programs it supports or otherwise needing to raise funds.

    One thing BYU had in the past was extremely low administrative costs. I do not know if that is still the case.

    BYU graduates tended to pay more tithing than others.

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  38. KT on June 8, 2013 at 4:27 PM

    “Tuition is this low thanks to tithing contributions, paid for by all members. Whether their kids attend or not. And while the number of students admitted remains constant, the number of members subsidizing with no personal benefit has grown.”

    That’s the one I have a problem with. It’s not even remotely fair. If the Church is going to go about subsidizing educations, then they should be giving every member who attends any college a set amount of subsidization. When it’s so hard to get in anyway, and many members can’t, how is it fair that that kid’s parents are subsidizing education for somebody else’s kid?

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  39. Stephen R. Marsh on June 9, 2013 at 6:36 PM

    KT, just a general tuition subsidy does not create a central cultural experience and intermixture.

    You are missing that what the Church gets out of this is something towards creating and integrating a global church.

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  40. Hawkgrrrl on June 9, 2013 at 7:35 PM

    Stephen, then my solution makes even more sense because it would bring even more global members together whereas now many spots are filled by Utahns whose most expensive option is still cheaper than everyone else’s cheapest option.

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  41. Douglas on June 9, 2013 at 10:47 PM

    Hmm. I thought that the long-standing counsel, rather than gather unto the “Zoo”, was for American LDS young adults, especially in the Western US, to go to school in their respective states (assuming they didn’t already have higher educational plans at out-of-state schools) and “build Zion” there. With the present trend to form, wherein possible, Young adult Stakes, and Student stakes, which have long existed in UT, ID, and AZ, it also seems that the dual-track of the “four-year-matriculation” versus all other pathways has been done away with.
    If it were me, I’d have the Church establish several JCs for those that want an LDS-heavy environment. One or two in SoCal, one in Northern CA, one in Metro Seattle, and one in AZ (Mesa, of course). These institutions wouldn’t have to have the full campus treatment, with a park-like setting, halls laden with ivy, stadia, etc…with all the commercial real estate going begging, in fact, Property Reserve could probably line up and develop these several campuses rather quickly. With modern technology, a great deal of the instruction could be done online. There would be several advantages: (1) reservation of the primary BYU campuses towards more high-powered education, filtering out those seeking more a mate than an education, (2) more of a vocational and industrial education, just as necessary as the “ivory tower” to make one’s way in the world, could be part of the curricula, (3) it’d be an inexpensive way to expand the LDS student base (4) the main BYU campuses would have more space available to accommodate student from outside North America.
    Still, nothing wrong with also strengthening the Institute of Religion program to give a degree of the socialization for young adults that elect to pursue their “secular” education outside the CES.

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  42. Rigel Hawthorne on June 10, 2013 at 6:10 PM

    Jeff S.

    Maybe, we shouldn’t even have Doctors as Church members. Too analytical and perhaps not spiritual enough….. :)

    True and true (for me)! Maybe at least they could ban us from being High Priests….then I could get out of my current calling!

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