A ProPublica analysis of newly available federal data shows that some of the nation’s wealthiest colleges are leaving their poorest students with plenty of debt.
https://www.propublica.org/article/colleges-flush-with-cash-saddle-poorest-students-with-debt
the problem with this whole article is embodies in the quote below; I bolded the salient portion:
Uh, no. No one “deserves” to go to NYU, or any other college for that matter.
And what the article does not discuss is what other options Arthur had; did she turn down much less expensive Vassar, perhaps because it did not ‘deserve’ her? 
$24,000 in loans for a photography student?
^^any student can borrow that amount for undergrad.
Of course, wrt major, why not? Congress and the President has basically told the masses that they will forgive your debt after xx years.
@bluebayou I’m aware. Just seemed to have potential for a poor ROI
Regarding their example universities…
NYU and BU are easy targets due to their relatively poor financial aid. However, it is not completely their fault that some students willingly attended despite high net prices that result in high debt loads.
USC claims to meet need, but comparing its net price calculator results to that of other schools that claim to meet need indicates that it is not that great with financial aid.
http://talk.collegeconfidential.com/financial-aid-scholarships/1675058-meet-full-need-schools-can-vary-significantly-in-their-net-prices.html
Also, are these schools really “flush with cash”? Endowment per student at these schools is an order of magnitude lower than at schools like HYPSM and AWSP, according to https://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_the_United_States_by_endowment#Endowments_per_Student .
I personally know several, very successful photographers.
I really hate it when people decide that what someone decides what to major in should determine what they pay for their education or how much debt is acceptable to take by major.
@bluebayou: The corollary of your stance seems to me to be that only the rich should go to the best schools. I’m not sure that’s the kind of society that would be best to live in.
Indeed. The assertion that unis like NYU, BU, and USC are flush with cash just isn’t supported by the data. The richest of these 3 (USC) has $130K per student. 5% draw is $6.5K/year. And that’s with all endowment income going towards student aid. NYU has half that.
The newly released federal college data on College Scorecard-- collegescorecard.ed.gov – are quite revealing. There are huge differences in the levels of FA various schools provide to the lowest-income students (family income < $30,000). Here’s the average annual cost net of federal, state, and institutional FA for students from that bracket at a number of top private colleges and universities:
Harvard $3,897
Yale $7,596
Princeton $5,932
Stanford $3,516
Claremont McKenna $11,104
Pomona $4,712
USC $16,403
MIT $5,554
Tufts $10,325
Boston University $23,783
Amherst $1,936
Williams $7,478
Brown $5,234
Dartmouth $9,858
Columbia $8,086
Cornell $9,149
RPI $23,115
NYU $25,441
Vassar $4,456
Penn $3,847
Carnegie Mellon $23,362
Swarthmore $10,832
Haverford $5,685
Duke $6,871
Wake Forest $21,854
Northwestern $15,841
Chicago $8,112
Johns Hopkins $11,547
WUSTL $7,781
Georgetown $10,197
Notre Dame $12,176
Vanderbilt $7,411
Emory $18,204
Some of these schools–BU, RPI, NYU, Carnegie Mellon, Wake Forest, Emory, USC, and Northwestern–might just as well hang out a shingle saying “Low-income need not apply.”
Hmm. @bclintonk, I don’t know about now, but when I went to college, my Northwestern fin aid package was competitive with other private elites (WashU actually had the worst) and I needed a ton of it.
I know that NU has need-based merit scholarships and the like, so there could be a wide variance in fin aid even among kids with the same income level. I assume that those numbers you are quoting are average figures?
There are also substantial differences in the net cost to low-income students of attending their in-state public flagship. Here, in order from low to high, is the average annual cost net of federal, state, and institutional FA for in-state students from families with incomes <$30,000 to attend the various Big Ten public universities:
Indiana $4,632
Michigan $5,529
Michigan State $6,293
Purdue $7,228
Maryland $7,901
Illinois $7,954
Ohio State $7,954
Penn State $8,306
Wisconsin $8,306
Minnesota $9,535
Nebraska $11,123
Iowa $11,351
Rutgers $11,659
So on average it costs a low-income Nebraska, Iowa, or New Jersey resident twice as much to attend their public flagship as it does a resident of Indiana or Michigan. Some private alternatives in the Midwest would be a bit cheaper but still pricey (WUSTL $7,781; Chicago $8,112) for low-income residents of Wisconsin, Minnesota, Nebraska, or Iowa; others would be more expensive (Notre Dame $12,176; Northwestern $15,841).
@bclintonk, however, averages are pretty meaningless for any individual applicant. For instance, a poor kid who is good enough to get in to WashU is almost certain to pull in enough merit scholarships from UNL to make Nebraska as cheap or cheaper for him/her as WashU.
BTW, are these only grant numbers? Are they counting loans and work earnings?
While it may seem distasteful to consider the likely income outcome of a major, most people aren’t “trust fund babies,” nor do they have parents who can fund them for years after graduation while they build a career that can support them. Adding on debt can really complicate things.
Often, those in “talent” majors (music, art, theater, photography) do not start out making a lot of money. Successful ones usually have many years of Ramen noodles. Who can make loan payments in those situations?
I think that is why many do double majors…one major that can lead to a “back up” career in case the favorite major is an bust income-wise.
Private colleges aren’t public. That’s what it comes down to. Sure, private colleges with huge endowments SHOULD offer financial aid because it’s in their best interest to have a diverse student body (and I mean actually diverse… like intelligent kids from very different backgrounds that have experiences that give them a wide range of perspectives, not kids with different pigments and surnames that all attended the same private high schools.) Colleges should do that because it fosters a more broadening learning environment. It opens up their talent pool and helps their public image as well. HOWEVER, they don’t have to. They are private schools and if they are happy with the dynamics of their student body… a student body that is willing to pay anything for the privilege of attending, that is their right. Heck, how many NYU sob stories have we seen on this page this season alone? Every one of those kids was looking at more than 25K in debt with parents maxing out their loans, kids maxing out direct loans, looking for private loans and each one had the “doesn’t matter what it costs, I’m doing this, mentality.”
Seems efforts should be to change our cultural attitudes about schools like NYU. Only then will they have any reason to make changes.
Default rate at NYU is only 3%, which is much lower than average. Add in the cool experience of living in unaffordable NYC for 4 years … and a highly ranked school with apparently good job outcomes
72% graduate in 4 years, which is really fast …
it’s none of our dang business …
the decision to take on student debt is personal …
the decision to default or being lured into taking useless loans … taxpayer issue
In many ways, taking on student (not PLUS) loans of 25-30K is basically the same impact for a poor student as a rich student … still got to make those payments out your starting salaries (unless daddy is going to pay those back which I think probably happens less than freshman hope)
I’d even go so far as to say with that NYU degree, you are no longer one of America’s poorest students … you have more income earning potential than 90% of your peers
There are people who buy BMWs no matter what the cost, I am doing this … and people driving used Corollas and putting $$ in the bank.
We’ll agree to disagree on this point. There is nothing that makes NYU an elite school overall for earning potential. There are some fields that are cherry picked which can get you in the fast lane for IB and finance, but 90% of your peers, no.
That’s a good question. The College Scorecard website isn’t entirely clear on definitions, but I believe the way the U.S. Department of Education looks at it, loans and work earnings (including work/study, typically federally funded and awarded by colleges as part of the typical FA package) are considered forms of “self-help,” not true “aid.” That is consistent with what they say in describing the average net cost by income bracket: “Depending on the federal, state, or institutional grant aid available, students in your income bracket may pay more or less than the overall average costs.” This implies they’re looking only at grant aid in calculating net cost. If that’s correct, then net cost wouldn’t include loans or work-study, and low-income students would be able to meet some or all of their net cost with loans and term-time and/or summer earnings. By the way, I agree with that way of looking at it; if you borrow or work to pay for school, that’s money that’s coming out of your pocket, not the school’s.
I don’t think the averages are entirely meaningless. An average $11K net cost to low-income students means most low-income students at UNL are paying a pretty high price to be there. Sure, some may do better with merit aid, but that’s already figured into the average, so if some are paying less than $11K, it means that others in that same income bracket are paying more than $11K. I agree that ultimately you need to see the individual FA + merit offer to decide whether it makes financial sense to attend, but I think comparing the averages from one school to the next can be a useful guide to temper expectations early on in the process. Seeing that the average net cost of Northwestern for a low-income student is almost $16K, I would advise any low-income student who came to me for advice that it’s probably not a good idea to count on Northwestern to beat their state flagship on net cost; it might happen in a few cases, but mostly not. Sure, go ahead and run the net price calculator to see if the result is different in your individual case, and go ahead and apply and wait for the actual FA offer if you like. But in the meantime, that student is probably better off shopping for private schools that are more likely to match or beat what they’re likely to get from their state flagship. And if even the state flagship is too expensive, then they should see if there are even less expensive options, like CC for the first two years.
@bclintonk, the problem with that logic is that any single applicant is unlikely to be the median/average student in that tax bracket at all schools. Sure, a poor kid may have to pay more at a selective school like Northwestern than at an in-instate option (though it may still be an affordable option depending on your appetite for debt and work), but the opposite isn’t true. As in the example I gave, even though the average poor kid at WashU pays less than the average poor kid at UNL, someone who can get in to WashU is likely to get so much merit money from UNL that Nebraska is as cheap or cheaper for him/her than WashU (and those who can’t get in to WashU don’t have that option anyway).
And what, pray tell, is my stance, demo? (One of pointing out the obvious: a moral hazard in gubmint policy?)
OTOH, please help me understand why the taxpayers of say, Arkansas, should pay more so that subject of the article can attend her “dream” college, which just happens to be one of the most expensive in the world?