> Why would it make people poorer?

Because people buying something means they no longer have the money, and are thus, poorer. If you have $20, and you buy lunch for $10, you now are $10 poorer.

> Were you under the impression that colleges burn the money?

(looking around at my alma mater, which has tripled the size of administration and built like four new sports stadiums, while the wages of professors have remained flat for ten years and cost-per-credit-hour has tripled) -- um, yes? Are there colleges that don't just burn the money, or dump it into stocks/bonds/trusts/etc?