Probably, which means it probably wouldn’t do much to change the fact of upper-middle-class families having relatively low admit frequencies.
However, it could still minorly adjust the ratio of upper-middle-class attendees to actual-upper-class attendees. Maybe.
It would be interesting to see if that sort of effect could be detected empirically. Like, for schools that give out a non-trivial number of merit scholarships, do they have a detectably higher ratio of upper-middle-class to actual-upper-class attendees versus otherwise comparable schools, controlling for everything else? I don’t know.
I don’t know how big the pool of donut hole applicants is, so perhaps this isn’t very significant in the big picture, but I can envision kids well beyond the highly qualified deciding to take a shot. I can hear them, “If there’s a chance…” “I need a full ride” etc.
The admission process alone is opaque as it is; I can’t imagine trying to guess scholarship potential.
(To be clear, I don’t have any beef with merit being offered. Just thinking out loud.)
The solution is simple for donut-hole families. The parents can leave their jobs in favor of ones that pay a lot less. Or better yet (assuming their jobs are of great importance and their work includes making positive contributions and innovations for the rest of the world), the parents could continue to work at their current employers but agree to a much lower salary. With the lower salary, the family could move to an inexpensive apartment in a lower cost of living town and enjoy their lives. Problem solved. The only hitch that seems to bother people is that it is hard to have both: a) generous meets-need grants and b) a high income and lots of assets. But I don’t see anything wrong with any individual family choosing A over B if that is their preference. I personally think A is a fine choice.
I think you are right that in certain cases, it leads to more applications.
Like, if we knew NPCs were perfectly reliable, families would presumably limit their applications to colleges that they considered affordable and worth the cost.
When serious merit money is a possibility, though, we can see them discussing adding colleges which do not meet those criteria as per the NPC, but might if there is a large enough merit offer.
Some colleges are more transparent about merit money than others, but I think the general effect is families like this apply to a few more colleges which might or might not come through with enough merit aid.
But for good or ill, this is really just a modification of normal “reach”/“target” logic. Like, you apply to a college where your odds of admission are middling to low, but not impossible. Or you apply to a college where your odds of a sufficient merit award are middling to low, but not impossible. Basically the same sort of issue, so basically the same logic will tend to apply.
I suspect current tuition is priced where it is for a reason, the optimal spot on the demand curve.
Thinking in indifference curves, for the families that can afford 250k/yr, it’s hard to imagine the marginal value of the Ivy is worth a cost so much higher than the state flagship and well-regarded privates.
I would also worry about prices for colleges increasing across the board in response to such a price.
Note depending the college, they may also look at certain assets and not just income. Some of your assets may not be considered, but often those sorts of “shelters” have limited capacity. So if, say, you have accumulated significant financial savings in taxable accounts and/or 529s, just lowering your income may not help.
Which is not necessarily a case that will engender a lot of sympathy. Just pointing out that if you are the sort of upper middle class family that can and does save beyond things like the 401K/IRA limits, ultimately you may find it difficult to really game your way out of a large expected family contribution at many of these colleges.
These donut hole families are not encouraging a violent revolution. They are simply rejecting the financial transaction being offered, as they have every right to do.
There seems to be an underlying assumption that the financial aid polices are automatically fair. But why for example, should a family that has twins or triplets (and is therefore have all in college at the same time) end up paying less over time than a family that has three children, each spaced four years apart. Why do some colleges consider family business losses in calculating their aid when others don’t. It’s all really quite arbitrary.
Also, to be clear, I have no dog in this fight. My kids were full pay.
I take the first of your points, Hebe, at least to a limited extent. I don’t think you’re saying these donut families outright can’t afford to go to Harvard after the needs based regime has assessed them, just that they’d prefer not to make the family budgetary reallocations this would require. That’s very understandable from their point of view. The moralist in me has less sympathy, however, and says that for the sake of something truly desired, making sacrifices is good for the soul. Perhaps better than monetizing the talents of an 18-year-old. Incidentally, it wouldn’t be such a bad idea if that 18-year-old made some sacrifices. A quaint notion, I know.
$250K tuition in a world where all other top unis are $60-70K tuition means, yes, the seats are for sale. Word games are seen through by the public.
If it’s only 1% of total seats, then it’s not so different from current development hooks, though apparently the price at Harvard is closer to $5M (so, ~$1.3M/year, not $250K). Making this more transparent (price listed on the menu, essentially) is probably not of benefit to the parties concerned.
I did mention assets in my proposal. Yes high assets also prevent some families from receiving needs based aid. But to be clear, I wasn’t suggesting that people game the system. I am suggesting that people can choose not to earn a lot of money if they don’t like the “benefits” of earning a lot of money. I know that my post may have come out as snarky, but it wasn’t meant to be a criticism or a guide to gaming the system. I posted it as someone who doesn’t make a lot of money and is happy with their life. My kids’ college choices may be constrained by what I can afford (not much), but I accepted that reality when I chose to work at a job that I enjoy.
So I truly don’t understand why anyone would choose to earn a high salary and then feel discriminated against when it comes to college financial aid. By choosing a low(er) paying job, I took a risk that my kids might very well not get enough financial aid to go to their first choice colleges. It strikes me that it is a similar risk that wealthier families take when they chose their high(er )paying jobs. Like my kids, it is possible, even likely that their kids won’t get enough financial aid to go to their first choice colleges.
I believe you are dramatically underestimating the perceived value of Harvard as compared to nearly all other schools, including state flagships. I also believe that the kink in the curve for families who can already comfortably afford $85k (by which I mean, not stretching to make $85k work) is significantly higher than you seem to believe it is.
Very much disagree. I’m not changing admissions policies here, at all. Just raising the sticker price.
Again, you’re conflating two ideas. One simply raises tuition to generate purely incremental revenue. The other auctions sells seats to make explicit what is now nonetheless a thing. Distinct things.
ETA: If anything, I think the wealthier family is risking less than I am since their kids will probably have more backup options that they can afford. Also, their kid can also seek merit scholarships at many colleges that will discount their prices to be affordable to the wealthier family while still out of reach to mine. And if you believe that high income kids are more likely to have high grades and standardized test scores, then their kids will likely be in an even stronger academic position than the children of low(er) income parents.
Yes, merit scholarship chances are generally more opaque than admission chances, with the exception of those with pre-announced automatic-for-stats (or NM or CBNRP status) criteria. (Even more opaque may be hidden embedded merit scholarships as “preferential packaging” of nominally need-based financial aid.)
Note that it also means that, for some applicants, a college that may be a match, likely, or safety for admission may be a reach because the merit scholarship needed to make it affordable is a reach.
Eh, OK, fine, I thought you were saying the seats were for sale to less-qualified-than-usual applicants.
Instead, if I understand, Harvard (or whoever) will still aim for the highest quality applicants across the board, but have an ask of $250K tuition, with more need money available.
Barring collusion with all the other elites to implement the ~same policy, Harvard would drastically lose share among full-pay applicants. Sure, there are a few Bill Gates in the world who wouldn’t care. But a LOT of Harvard’s admits who are full-pay now would balk at paying ~$1.1M for 4 years at Harvard when they could get 4 years at Yale, MIT, Duke, or whatever for ~$300K. I think you’re overestimating the demand for seats at Harvard, among regular (unhooked) admits who could, presumably, also get admitted to just about any other college they wanted.
To be clear, I agree with you. But I think there are some explanations for why you might see such complaints more often than you might expect.
One is just I gather some families simply have not been looking closely at what various colleges might cost them until right near the end of the process. So it is a shock to them how much colleges they thought would make sense for their kid might expect them to pay. And this can then cause a painful discrepancy between long-discussed college hopes/expectations and actually affordable options.
Another is that in certain areas, housing has gotten very expensive in relation to income, and depending on when you bought and your other savings habits, even pretty high-income families may end up with a lot of their savings in the form of net home equity (current home market value minus mortgage balances if any).
I think from the perspective of colleges, the answer is often that you should go ahead and use some of that home equity to pay for college, that indeed it would be unfair to “punish” families who lived in lower-housing-cost markets and have more savings in the form of non-sheltered financial assets. But to people in those high-housing-cost markets, I think it can feel precarious to have to borrow against their home to make the required family contributions.
I think there are various other cases too, but these feel to me like the main ones I see being discussed in the places I frequent.
To clarify for other readers, as you implied by “often”, this varies between schools. HYPSM and some others ignore home equity in finaid calculations; others count it to a cap; yet others count it all.
I thought the broader discussion of merit is interesting.
A while back on this thread, someone said that an test-based system would lead to a boring class or a class that isn’t going to have leaders in it etc (not that I think US schools should work that way).
Oxford and Cambridge are entirely test-based and I don’t think people generally consider them to be schools bereft of leaders, financiers and bankers.
They have reputations for being places of privilege without being too nerdy.
