Are College Costs Reaching a Breaking Point?

<p>Next week President Obama will swing through four college towns on a bus tour, promoting ways to reduce higher education costs. The growing attention to universities’ soaring prices is pushing some private colleges to a tuition tipping point, according to Standard & Poor’s Rating Services. In a new report, S&P said costs have risen so much, 'many of their customers can’t afford tuition without significant financial aid.' If some schools don’t keep their tuition under control, they’ll shoot themselves in the foot and face the need for more drastic cost-cutting, such as layoffs, and potential mergers or closures, S&P says." ...</p>

<p>Are</a> College Costs Reaching a Breaking Point? - Businessweek</p>

<p>YES, I think they are, based on the reports I’m reading of college apps dipping this year. Looks like we are on the downside of the slope for numbers of kids, so maybe costs will have to drop. One can hope - since I still have another in the pipeline that won’t be applying for years!</p>

<p>Our local university flagship outlet (2 Universities -your degree comes from one or the other, depending on major), has a huge increase in enrollment this year, with higher GPAs and Test scores than before. Lots of people are commuting if they can, at least for the first two years, and then transferring to the University from which they hope to graduate, if they can. It makes good financial sense.</p>

<p>“I’m reading of college apps dipping this year. Looks like we are on the downside of the slope for numbers of kids”</p>

<p>College enrollment usually declines in an improving/good economy.</p>

<p>I hope you are right, Katliamom, but I’m not seeing any evidence of improvement. Any job increases are mostly part time.</p>

<p>The boarding/lodging expenses have also gone up & their increase is similar to (increase in) tuition costs. </p>

<p>I guess if the students want to stay in 4-5 star accommodations, have rock climbing & state of the art gym, and have the choicest gourmet meals, they (and/or their parents) have to pay.</p>

<p>20-25 years ago, people learned equally well under not so opulent conditions.</p>

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<p>It also looks like we are past a local maximum of high school graduation numbers, which occurred in 2010-2011. The next local minimum is projected to be in 2013-2014, after which high school graduation numbers are expected to rise again.</p>

<p>[Table</a> 13. Actual and projected numbers for public high school graduates, by race/ethnicity: School years 1996–97 through 2021–22](<a href=“http://nces.ed.gov/programs/projections/projections2021/tables/table_13.asp]Table”>http://nces.ed.gov/programs/projections/projections2021/tables/table_13.asp)</p>

<p>I thought they had about 12 years ago, and thought things would change. Nope. I’m still stuck at those levels as to what we can afford. I think some schools are hurting and discounting, but that there are still loans available due to federal rules and backing of them, the school are still hanging in there. Cut out the special provisions for college loans, and then we’d see some changes fast.</p>

<p>To the person who said we’re paying for rock climbing walls and gourmet food, etc, that isn’t necessarily what the $40,000+ tuition bills are paying for, because I’m going to a state school that costs around $15,000 annually that has all of that stuff. Actually, my parents are only paying about $1,000 this semester, thanks to scholarships.</p>

<p>But yes, colleges in the US are WAY too expensive. I’ve read that universities and colleges in other countries cost significantly less. I don’t know if that’s because the quality of their programs is lower, but if, for example, a state flagship can operate just fine with a tuition price that’s about half of most private schools, then there really isn’t any reason for the high prices except to weed people out.</p>

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<p>Where is this? I’d certainly be up for all of this fun!</p>

<p>I’ve been hearing that college costs have reached the breaking point for the past 40 years.</p>

<p>Yes I believe we are at a crossroads. In our experience now since 1986, costs have continued to climb and merit money has become tighter. Now the entering freshman class is shrinking. These three factors combined should bring the situation to a peak. Dadinator, I agree with what you say on surface, but the market was climbing and money was loose in the 80s and 90s, it wasn’t until the middle of the 2000s that money became tighter, people lost value in their retirement and savings accounts, there was no inflation and salaries did not increase so the real test will be what happened starting in 1987 and going forward. The market is climbing slowly but normal people are just starting to see real gains against previous loses. The housing market is far from reaching it’s peak so equity is still down and banks are still tight for the average household sending kids off to college.</p>

<p>yes. Our EFC for D’s senior year will be higher than when we had two in colleges at the same time.</p>

<p>Yes I had three kids with almost identical GPA and test scores and applications applying to similar and sometimes the same schools between 2006 and this year and where the three schools overlapped all three kids so I could actually compare freshman packages, merit money decreased slightly with each subsequent kid (while our EFC continued to rise despite lower annual income and lower assets each year.) This is what will change things in the next decade. Most people will eschew spending a hundred thousand to a quarter of a million dollars per kid for a BA or BS and it is my belief that very few colleges have the endowment necessary to continue to bring the costs down artificially through merit money. We’ve already seen UVa add back loans from “no loan” policies of a few years ago for students and we’ve seen plenty of college tighten up merit over the last couple years. It is not a sustainable business model in today’s economics.</p>

<p>In our current economy it’s interesting to see so many CC kids say money is not a concern when they search for colleges. Money is no object, as my d explained about the summer abroad students in Paris who rented a motel room just to enjoy air conditioning when they had a heat wave. Meanwhile the vast majority of students whose parents have not found a way to save a small fortune and get gapped big time struggle with that average loan debt of high $20,000 to get that BA ticket to middle class. The economy has improved for many, but college becomes increasingly expensive for lower income people. Is there really a breaking point?</p>

<p>Are College Costs Reaching a Breaking Point?:</p>

<p>If there are enough future ‘clients’ who are willing to say enuf is enuf…they YES… I for one have faith in my fellow man!</p>

<p>I do think they’re at a breaking point. College prices are ridiculous right now and it’s just not sustainable. My family and I are paying upwards of $52,000 for my schooling alone (and my younger sister is a rising senior in high school) since I’m going to an out of state school. I can’t believe people will continue to pay such high prices.</p>

<p>That being said, I don’t think anything will change in the NEAR future. Tuition probably won’t decrease while my sister and I are in school. I just hope prices go down for when it’s time to send my kids to school (if I have them).</p>

<p>When I went to college, 4-year college cost was LESS than the median family income. Now it’s double the median family income</p>

<p>Graph of 4-year college costs as a percentage of household income:
<a href=“http://gunsandbullets.files.■■■■■■■■■■■■■/2010/06/total-college-costs-as-a-percentage-of-household-income.png[/url]”>http://gunsandbullets.files.■■■■■■■■■■■■■/2010/06/total-college-costs-as-a-percentage-of-household-income.png&lt;/a&gt;&lt;/p&gt;

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<p>Obviously, you and your family are willing to pay such high prices…</p>

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<p>Check out nearly any T20-30 (or so) private university or LAC.<br>
These schools have sticker prices in the $50K-$60K range.
They also give need-based aid to about 30%-60% of enrolled students.
Net prices after average need-based aid at many of these schools is in the $15K-$30K range (comparable to full sticker prices at state flagships). </p>

<p>[Kiplinger’s</a> Best Values in Private Colleges-Kiplinger](<a href=“http://www.kiplinger.com/tool/college/T014-S001-kiplinger-s-best-values-in-private-colleges/index.php]Kiplinger’s”>http://www.kiplinger.com/tool/college/T014-S001-kiplinger-s-best-values-in-private-colleges/index.php)</p>

<p>Judging from their admission rates (30% and below), there is no shortage of students willing to pay full sticker to attend these schools. Even if the USA did reach a demographic peak a couple years ago in the college-age population, we now have more and more international students eager to compete for these places.</p>

<p>I would expect private schools a couple notches down in selectivity to be the ones that really start feeling the pressure to control costs. Look at how many merit scholarships some of these schools are granting. Over 50% of students, in some cases, are getting these discounts.</p>

<p>As long as there is a line of kids waiting to get in with a guaranteed loans in hand to make them afford it, there is no incentive to drop prices.</p>