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I go to a private school in upstate NY. Here, no cars for freshman. Afterwards you have to buy a parking permit for $125 for each semester. I've had my e46 330ci for the whole time and while I definitely have some dings and scratches here and there nothing major was done to hurt my car.
For me the benefit of a car far out weighs the luxury tax of parking. Though I can see where it would be a problem for some schools. I have some friends that live in Hoboken, NJ and parking there is about as bad as it can get. If I lived there I wouldn't think twice about giving up my car simply because its not worth it and is a money and time sink.
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