It seems that colleges are getting more and more expensive (the private ones) and harder and harder to get into. Being spectacular, or well rounded is no longer even good enough. State Flagships are also getting harder and harder to get into (look at GA tech, which is down to less than a 25% admit rate ). Some of the private schools have COA close to 70K. How are these schools getting smaller and smaller admit rates, maintaining their yields, yet are getting more and more expensive. Not every school is 100% needs based.
so at what point does the system “break”. Does it ever.? Who is affording these schools that cost 60K+ a year? Even with financial aide and merit, it doesnt meet everyone need. I originally though that this was Suggested Retail pricing, and that most everyone who was not wealthy gets some aide, but quickly learned otherwise. Yes, applying to schools which are “safeties” will provide merit, making many financial safeties as well. Not every child is a fit for a school like University of Alabama, which offers a low cost education if you meet certain academic criteria. Where does the average child fit in? And with these costs more and more kids are still applying (likely due to common app) and schools are still meeting yields. i know that some of it is the international factor.
its very scary out there. I am grateful i went to school in the 20th century, when it was still affordable. an example was that tuition at a prestigious school was 8K, where avg family income probably hovered around 40K. That same school is now 50K, and average family income is not 250K.
this is not about my personal situation, but overall seeing how many qualified kids are not getting into schools,including state flagships, and those who do get into private schools cannot afford them, yet, the schools continue to thrive. It ponders my brain.
A few years ago when I started to look hard at college costs because my son was applying to private schools and we knew we wouldn’t get any aid, I said to myself “higher education has GOT to be the next bubble!” But so far, it hasn’t burst!
What I find scary is when qualified kids CAN get into the state schools but cannot afford them. In our personal situation, the state flagship university is one of the most expensive options (EFC wise) that is on our high schooler’s list. We are solidly middle class and have grandparents who will be able to contribute a little. I shudder to think about how kids in my state who are lower middle class are going to afford it. (And, the local university requires freshmen to live on campus, knocking the affordability of that option down a few notches.)
The paradox is that the state wants more folks with bachelor’s degrees but fails to adequately fund the state’s public universities.
Re: #2
Student loan debt by state: http://ticas.org/posd/map-state-data
Perhaps it is no surprise that some of the highest debt levels are in PA, DE, and some northeastern states.
@tutumom2001: If the in-states have a CC pathway, 2 years of CC then transfer.
Americans have demonstrated an insatiable appetite for debt. It used to be just adults who liked to gorge on debt but now young kids are jumping into debt also. As long as there is money available to borrow, people will do so. I see no reason to believe that college costs will NOT continue to raise at an annual rate of 5%.
Just think, when these same kids send their kids to school, the average cost should be close to $200K/ year.
The main reasons why things are what they are is because the US is a big country with a lot of well-off households and the elite privates have a relatively small undergraduate intake and draw from all over the world.
The top 1% of households make between $400-$700K (I’ve seen different figures). Roughly 40K kids a year in that percentile.
Full-pay are probably 5-10% of households. 200K-400K pool.
All 30 Ivies/equivalents added together take in maybe 25K freshmen each year. http://talk.collegeconfidential.com/college-search-selection/1893105-ivy-equivalents-ranking-based-on-alumni-outcomes-take-2-1-p1.html
As a percentage of the population, that is a smaller intake than Oxbridge+LSE+Imperial in the UK or UTokyo+Keio+Waseda in Japan.
And that’s because all 5 of Oxbridge/UTokyo/Keio/Waseda take in more each year than the biggest Ivy/equivalent (Cornell).
The 2 of Oxbridge take in roughly as many undergrads each year as all 5 of HYPSM, and the US has 5 times the population of the UK.
Take a step back and it’s clear that what’s been driving the increase in list price has been rising inequality and the widening gap between the winners in the global economy and everyone else.
Without a major change (unfortunately, they tend to be wrenching and violent), full-pay for 4 years at a private will be half a million dollars in 20 years.
I suspect they can keep the seats/beds filled as long as they have a large supply of full-pay international applicants.
@Trisherella: If full-pay internationals dry up, that would actually hurt the top public flagships and maybe less elite big privates like NYU/USC/BU more as they take in a lot these days. The elite privates still limit internationals to 10-15% of the class; there are still more than enough well-off American families willing and able to pay full price to attend them.
It appears that “net price” is after subtracting “grant aid and federal tax benefits” from list price, according to that document. The graphs are also in inflation-adjusted dollars.
However, while college net prices overall may not be increasing as quickly as commonly perceived, there could be considerable differences in trends between the small number of most desirable colleges (the more selective privates and state flagships) versus the majority of colleges (the less selective privates and the non-flagship commuter state universities and community colleges). The latter may struggle to attract students without heavy discounting (scholarships and financial aid grants) even if the former can keep raising prices. In a way, the observation of increasing income and wealth inequality (reply #7 above) may be reflected among the colleges – the most desired ones can increase prices much more easily than most colleges can.
We are living in the most carefully engineered and carefully instrumented debt bubble in the history of the world. Some of this is (a little bit) is funded by student debt. Other kinds of debt (particularly government debt) is making possible a stock market bubble which of course makes investors (aka “the rich”) appear to be better off, which allows a few to pay these enormous costs of college, and which also funds ongoing debt fueled growth of the economy. Between student debt, the investment bubble effect on university endowments, and the investment bubble effect on the ability of a small number of people to pay insane tuition costs, the universities seem to think that they can maintain this, or perhaps they can’t figure out how to get off of this trajectory either.
Another aspect of this: High school grades are going up. The grades that got me into MIT years ago might or might not get someone into UMass Amherst today, but certainly would not get anyone into MIT today. When I look at a high school student’s papers that come off our home computer at or after midnight, they are way better researched, better thought through, and better written than anything that I ever saw in high school or university years ago. The A+ that these papers bring today would have been an A+ years ago also. Thus I am not sure that there is grade inflation, I think that students are doing more and learning more. However, this is not free. This comes at the cost of an enormous stress that we are putting on today’s students. A typical day for many high school students includes 7 hours of school, 2 hours of extracurricular activities (because you need great ECs to get into top schools), and 6 more hours of homework (because you need A+'s in AP classes). This is not sustainable either. Perhaps this is a “stress bubble” on our kids to match the “debt bubble” that we have taken on as a nation.
Today we have better ability to collect information and better ability to model economic systems than we have ever had. We have a larger group of relatively successful people to save and invest and fund the bubble. We have worldwide investment markets to help fund the bubble. This allows the bubbles to grow bigger. Bigger of course does not mean “more stable”.
The cost of university is just one part of the bubble.
If we look at past debt bubbles, we pretty much know how this is going to end. Predicting when is beyond my abilities.