<p>Does anybody else feel funny about the fact that they can't afford to send their kids to the top tier schools that they themselves went to? I went to Wellesley, but have been home for several years with my kids and my husband's in the military and I"m pretty sure I could never afford to send my daughters there. They still call and ask for money, though -- lately, i've been toying with the idea of telling them that I'm not giving money because I can't afford to send my kids there . .</p>
<p>I feel funny about that, Momzie, and about something else - if I were applying today, I don't think I could have gotten into the school I went to! The whole process is nuts.</p>
<p>Cockatiel -- (Post 16). My husband talks about working your way through, too. To me, that is the biggest indicator of the difference between "back in the day" and now. There is absolutely no way a kid could work summers and part-time and cover college costs, even at most publics.
Both my husband and I graduated debt-free because of combinations of working and scholarships/grants. We went to a private, Catholic college, by the way.
I'm still having trouble processing that "less than 10% attend schools where the list price is over $30,000." How can that be? Most privates, including those that are religiously affiliated, have total costs over $30,000 now -- not just the top, prestigious schools that can be over $50,000. Those very reputable, but not top, schools do try to give out merit and need money that bring that figure down so everyone doesn't pay over $30,000. But less than 10% attend? Is that true?</p>
<p>Chronicle of Higher Education, October 23rd 2007.
Libby Sander "Financial aid to college students has increased by 82% over the past decade but still has fallen short of covering the average price of a college education, as the costs of college education has outpaced inflation, family income, and sources of grant aid, according to two new surveys by the College Board. More than 130 billion in grants, federal loans, Work Study funds, and education tax credits was distributed to undergraduate and graduate students in the 2006-7 academic year, one of the surveys found, while students borrowed another 18 billion from state and private lenders to pay for their education" </p>
<p>First, this is another source within the education industry which admits that the costs of college and the attendent debt load on students has become excessive. 130 billion is a large amount, but when distributed across the board its not making that much difference per student. Additionally, some of that the 130 billion is on governmental spending, which admittedly is problematic. However that debt is placed under parameters which make it at least possible to manage. Student debt, especially since Albert Lord (Sallie Mae Chairman)and Thomas Fitzpatrick, Harrison Wadsworth and others...managed to establish unbelievable special treatment for their interests, largely by 'buying' congressional votes with strategic donations...have been set under a parameter wherein the fees, charges and special treatment for the SL companies, have reached
levels virtually unknown iin many other financial markets. And not permitted in other lending markets. So very quickly the 18 billion will escalate to much, much more. And students are not benefiting from the 'help' of these institutions, nor from the cabal in congress who allowed this to happen. Who is...well one estimate is that Lord has made 225 million since 1999, mainly from stock bonus's within his own company.
Overseas, the Irish, and Swedes are commenting with stunned disbelief of what has happened to American Higher Education. But these countries, as small as they are, can educate their future leaders and producers, without backrupting them.
As far as blaming this mess on the illegals, most of them lack the education to enter academia. And others, having had to leave corrupt and oppressive economic systems, can see through a shell game which has been rigged for the affluent. Many will not enter US colleges as they've lived the effects of economics for the elite...and came here because of it. Los illegales are a problem, but not in this context.</p>
<p>Colleges make a huge deal about "meeting 100% of need," making it sound as if they are affordable no matter what your circumstances are. In fact, if a middle class family has not prepared for college well in advance by saving and ensuring that they are spending much less than they earn, an expensive college may well be impossible to pay for without taking out massive loans. Colleges assume that you will devote a significant part of your income to these expensive, and if you are spending most of what you earn, the EFC is likely to seem shockingly high.</p>
<p>That's not to say that every student has a right to attend any college he or she can get into, regardless of finances. My point is that there is many colleges create an impression of affordability that isn't always true.</p>
<p>Colleges further muddy the waters by including loans in their "meeting need" calculations. I don't have any problem with students taking out modest Stafford or Perkins loans to complete their educucation, but counting these as a reduction in cost seems a bit disingenous. Indeed, some reports actually show the difference between "sticker price" and "actual cost" and include loans in the "discount". If you buy into that approach, I'll give you a brand new car for free (you will, however, have to sign some loan documents, but don't worry, the interest rate is subsidized by the automaker).</p>
<p>So, when you see stats about the high percentage of students who receive financial aid, or that the average price paid is far less than the sticker price, ask a few questions:
- what percent of students receive grant/scholarship aid?
- what is the average amount of grant/scholarship aid?
That will give a more accurate picture of how affordable the school is, as it won't include bogus reductions like loans and work study.</p>
<p>The other point, of course, is that averages don't mean that much - it's the aid that they award to YOU that counts.</p>
<p>
[quote]
Does anybody else feel funny about the fact that they can't afford to send their kids to the top tier schools that they themselves went to? I went to Wellesley, but have been home for several years with my kids and my husband's in the military and I"m pretty sure I could never afford to send my daughters there. They still call and ask for money, though -- lately, i've been toying with the idea of telling them that I'm not giving money because I can't afford to send my kids there . .
[/quote]
</p>
<p>Yes, it makes me just about cry. I went to Stanford undergrad.</p>
<p>
</p>
<p>Funny line, and one that ought to provoke thought about exactly what is offered in a financial aid offer. The longer story about how parents misestimate the overall cost and value of attending one college or another can be found at </p>
<p>
[quote]
That's not to say that every student has a right to attend any college he or she can get into, regardless of finances. My point is that there is many colleges create an impression of affordability that isn't always true.
[/quote]
</p>
<p>I totally agree.</p>
<p>A lot of issues that influences the cost of higher education. </p>
<p>Like the Housing Bubble was in part fueled by the extremely low cost, low documentation, and greed for homes and loans, We are facing this in education. </p>
<p>Get rid of the subsidized, low cost loans and the schools will be forced to confront their costs. There will be short term pain but there will be end to the escalating costs. Get rid of the state subsidy to state schools, and parents will confront their need to save and invest. The pain for parents and their children to confront a life style will be hard but the potential gain is enormous.</p>
<p>I completely agree thisoldman. We do have savings vehicles in place such as section 529 plans, which allow parents to save for college expenses on a tax free basis.</p>
<p>
[quote]
Get rid of the state subsidy to state schools, and parents will confront their need to save and invest.
[/quote]
</p>
<p>Well then we really would be educating only the wealthiest among us.</p>
<p>Actually, if state subsidies to state universities were reduced, it just might INCREASE opportunity for low-income students to go to college. All economists of education who have studied the issue have shown that heavy public subsidies of higher education tend to benefit the rich (whose children go to college) at the expense of the poor (who work and pay taxes without sending their children to college). This is a worldwide phenomenon. In any country where higher education is very inexpensive and subsidized by taxes, you have a "reverse Robin Hood" effect of taking from the poor and giving to the rich. In countries with extremely low list prices for higher education, you have to have barriers to entry to higher education (entrance exams or requirements to complete secondary schooling in a specified way) that ration entry and restrict access to most well-off students, who are best able to meet those entrance requirements. The countries that have the highest access to higher education are actually those in which PRIVATE funding plays a bigger role in higher education, because in those countries private charity can aim reduced prices at the most needy, and private credit can allow broad access to higher education for young people willing to pay tuition up front (possibly by working their way through, as I did) or to make a promise to repay a loan for education. </p>
<p>As a matter of international comparisons, the mixed system in the United States with many tax-subsidized colleges, but few with amazingly low list prices, and with many sources of self-financing through work or through private credit allows the greatest number of students to get the better quality of higher education. Some of the other countries in the world with the best trade-off between quality and access have similarly mixed systems of higher education. </p>
<p>A good economist to read on these issues is Mark Blaug, who pioneered "human capital" theory and has studied the economics of higher education for decades.</p>
<p>Tokenadult,</p>
<p>I am interested in the apparent inconsistency between the Harvard study that you cited in post #47 and the study by Dale and Kruger that found that, at least from a financial point of view, students who had been admitted to highly selective schools were not hurt by choosing to attend less selective schools. Dale and Kruger seem to find that students who can get into highly selective schools will do just as well, financially, as those who actually attend them. </p>
<p>From the abstract on the NBER site: "They find that school selectivity, measured by the average SAT score of the students at a school, doesn't pay off in a higher income over time. "Students who attended more selective colleges do not earn more than other students who were accepted and rejected by comparable schools but attended less selective colleges," the researchers write. They also find that the average SAT score of the schools students applied to but did not attend is a much stronger predictor of students' subsequent income than the average SAT score of the school students actually attended. They call this finding the "Spielberg Model" because the famed movie producer applied to USC and UCLA film schools only to be rejected, and attended Cal State Long Beach. Evidently, students' motivation, ambition, and desire to learn have a much stronger effect on their subsequent success than the average academic ability of their classmates."</p>
<p>College costs have certainly risen signifcantly in the past several years. The cost of Ivy League schools and other top tier schools are very high. We learned with our oldest S last year that even the aid/grants/scholarships are noted in schools literature, the amount we would receive was not enough to make it a reality. Many schools do not consider the tuition a parent is paying for younger siblings in high school and grade school, some colleges do. Our S did end up at a wonderful, but lesser known, school with a very nice merit scholarship and work/study program. There are many very good schools out there that do offer more reasonable tuition and some nice scholarships. Did you know that there is even a school you can go to that doesn't charge tuiton? It is College of the Ozarks. Just because you choose not to take out significant loans to cover the $40,000 to $50,000 a year for some of these schools does not mean your son or daughter will not get into medical or law school. They may even enjoy the undergraduate years more knowing that they will not be saddled with major debt when they graduate.</p>
<p>The Harvard working paper I cited has a footnote describing a methodological flaw in the Dale-Krueger working paper. That flaw vitiates the Dale-Krueger conclusions. Moreover, on its own terms the Dale-Krueger study shows that students from low-income families are well advised to the most elite colleges that will admit them. Of course the benefit of college, in economic terms, is less for people who are already well-off. That's just restriction in range.</p>
<p>Tokenadult, </p>
<p>I'm curious what is the nature of the "flaw." Also how does the Harvard paper sort out the issue that Kruger and Dale were trying to get at i.e. the fact that studies of the advantages of going to prestigious universites are measuring the advantages of being the kind of person that prestigious
universities want to admit.</p>
<p>Roger wrote:</p>
<p>
[quote]
In fact, if a middle class family has not prepared for college well in advance by saving and ensuring that they are spending much less than they earn, an expensive college may well be impossible to pay for without taking out massive loans. Colleges assume that you will devote a significant part of your income to these expensive, and if you are spending most of what you earn, the EFC is likely to seem shockingly high.
[/quote]
</p>
<p>It seems to me that the point is, if you make enough that you don't qualify for aid, but you're spending most of what you earn, then you're making choices. I don't see that colleges should be subsidizing those choices. Someone mentioned the cost of private school K-12--that's a choice. Someone else mentioned staying home with kids--that's a choice. I'm not saying they're not valid choices, just that people who are paying for these higher priced schools might not be any richer than you are--might actually have less money, but are devoting large percentages of income to college costs--another choice. </p>
<p>Last year, for instance, because of the lag between the income FAFSA counts, and the income of the actual school year, our EFC was half our income. Well, we live cheap, and saved money. I'll bet that even before our income nosedived, it was less than what people say is too little to afford these schools, but we did. </p>
<p>There's a thread on the FA board, where someone gripes that how come a "middle class" family with 200K income and a 500K house won't get aid, and I just wanted to cry--top 2% of the country is not middle class!</p>
<p>I know some truly middle class kids going to top schools--somehow their families are making it work. I'm trying to understand what makes them different, besides a different set of choices.</p>
<p>Garland, you know I agree with you on this issue, but a lot of what you and I consider choices, others consider "life's circumstances". How many kids to have and when? When to "trade up" in a house, car or whatever, or when to decide that my starter home is fine for us, and to bank what you' would have spent on a bigger mortgage; to take a job which offers flexible hours but no benefits... all of these are choices. </p>
<p>I laugh when friends of mine... many of whom are now embarking on frustrating job searches after 15 plus years of staying home or on the Mommy Track claim that it's not fair that I have more choices than they do.... they chose to forgo the second income-- that choice has consequences. I chose to stay on a professional career track-- that choice also has consequences. College friends of mine who opened mommy type businesses-- gift baskets, personalized stationary from home, etc.-- are resentful that I'm starting to plan for retirement, since they essentially have no IRA, 401K or the like. I'm not knocking their choices-- it must have been nice not to have to take a vacation day to take your kid to the Dr. or do a school conference-- but getting to have choices when your kids are young sometimes means having fewer choices when you get old.</p>
<p>A neighbor of mine thinks there should be a tax credit or tuition discount for kids with a Stay at Home Parent. I've asked her if she believes the waitress down at the Waffle House who is a single parent ought to be subsidizing her choice to be home when her kids get home from school.... how is that fair? and her face is a blank as if she'd never considered that working is a choice that some people get to make whereas others don't get to decide.</p>
<p>I am also mystified by the folks who resent a suggestion that they take loans to finance a kids education. Whether they do or don't is a personal choice, but since people have no issue financing lots of things in life that depreciate significantly on day 2 (Rolex watch, nice car, appliances) why they can't get the concept of financing something which will increase in value is beyond me.</p>
<p>I’m with you blossom, so much of life is about choices. Type of job, cost of house, how much to spend on vacations and cars, private school, work or stay at home, etc. My wife also worked while our kids were young, and I can remember making daycare payments that were higher than our mortgage payment at the time. A co-worker of mine, who recently bought a new house and car, constantly complains about how there needs to be more financial aid available for his daughter who is at college. He really feels that he and his daughter should not have to take as many loans as they currently do.</p>
<p>His daughter has chosen to stay fairly close to home and attend Seattle University over the University of WA. I certainly understand the differences in the 2 schools, but while they are only a few miles apart in distance they are many miles apart in cost. If you make the choice to select the more expensive option then be ready to pay the money. Please don’t ask for me to subsidize your choices, I have enough desires of my own that need to be paid for!</p>
<p>Blossom,
I hear the exact same thing from my close relative as you hear from your friends. She got really mad once when the subject of tax credits for childcare came up, indignantly saying that she should get a tax credit for staying home. She tells me that my family's "circumstances" are so much better than hers, so we can afford all kinds of options for our kids that she can't. Our kids are basically the same age, but she chose to stay home until the youngest was in school, and then work part time at a job with good hours and summers off, but very low pay. I chose to return to work very soon after my kids were born to a professional job with reasonable hours and very good benefits. (Irrelevant to this discussion, I was the target of her negative comments about the harmful effects of daycare.) As TuitionDad mentioned, daycare payments were high compared to my salary, and also summer day camp expenses were very high later on. However, I was achieving a gradually increasing salary as well as retirement benefits for each year I worked, and eventually the child care expenses ended. Now she feels that no one would hire her for a better paying job at 50 years old, and resents the fact that I can think about what my retirement benefits will eventually be. Every choice has a trade-off. </p>
<p>I admire you for being able to laugh when you hear people say these things....I guess I should too instead of being annoyed/angry. The story has gone from the harm I was doing to my kids by working while they went to daycare (which did not turn out to be true), to how my kids have every opportunity that she can't afford, to that I have "played my cards right" to maneuver some benefits in the future, as if I had gamed the system somehow instead of simply working continuously for all these years. </p>
<p>Edit: I would also like to add that my husband and I always felt that, since we lived well within our means, we could manage on either one of our salaries, if need be. (I guess that makes sense since many people with either of our jobs are the sole breadwinners in their families.) Therefore, since no job is totally secure, we would be ok and would not have to move or totally disrupt our lives if one of us lost our job unexpectedly.</p>