The WasteWatcher: The Staff Blog of Citizens Against Government Waste

College Town Poverty – Ramen Noodles AGAIN?

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


It’s an early afternoon on a crisp fall day in an average college town.  In preparation for the game, young professionals are piling into local bars and restaurants to see their alma mater play.  The late risers are lining up at the numerous downtown coffee shops to inject some caffeine prior to kickoff.  After the game, there are more festivities – food, drinks, and celebration. 

Nothing seems out of the ordinary, until one learns that the federal government occasionally labels such towns as among the poorest in the country.  This backwards fact is made possible by the government’s formula that determines distribution of anti-poverty funds. 

The Census Bureau counts low-income (less than $9,800 per year) students who do not live in dormitories as below the poverty line – even if their parents pay 100 percent of their bills.  College towns such as Columbus, Ohio; Ann Arbor, Michigan; and Berkeley, California are counted as “poor.”  Despite picturesque buildings and low unemployment rates, these cities rake in the bucks simply by the presence of cash-strapped college kids.

This wildly erroneous methodology helps relatively prosperous towns compete with impoverished inner cities and rural areas for Community Development Block Grants (CDBG), a $3.7 billion program administered by the Department of Housing and Urban Development (HUD).  The community decides how the money is spent, and grants pay for everything from upgrading homeless shelters and planting trees to providing loans to new businesses. 

Unless you consider Ramen Noodles and Easy Mac to be part of a chic diet, most peoples’ college years are not defined by opulence.  Nonetheless they survive, and most would not think of themselves as poverty stricken or in need of federal assistance (other than student loans).  Subsidizing the opening of yet another coffee shop in a college town square does little to improve the plight of the truly impoverished. 

What is more exasperating is the government’s knowledge of the problem.  HUD officials told the Cleveland Plain Dealer (09/17/06) that student-related poverty inflation accounted for at least $27.5 million this year.  A comprehensive study covering many years would probably push that figure into the hundreds of millions of dollars.  HUD has sought to exclude the majority of off-campus students from poverty counts, among other formula changes, but it falls to Congress to change the law that governs grant formulas.  This is not an example of “mindless bureaucrats” but of mindless members of Congress failing to perform their oversight responsibilities. 

Unfortunately, inflated poverty figures are not the only wasteful facet of the CDBG grants.  Recipients of these grants have an abundance of options in using the awarded money.  Previous grants have included $25,000 for construction of the Music Conservatory of Westchester, and $500,000 for “streetscape improvements,” both in Westchester County, New York; one of the most affluent counties in the nation. 

For most students, a meager lifestyle is a tradeoff in order to attain a well-paying job down the road.  It is irresponsible to lump students together with people who really need to rely on government aid as their only alternative to destitution.  College towns already benefit from the influx of government money that is associated with any big-time campus.  Student loans, facility upgrades, and research grants all benefit the institution, students, and the surrounding community.  Congress needs to put an end to this bizarre policy.

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