<p>Really? At what school?</p>
<p>And on the topic of auctioning admissions slots to the highest bidder, here's a fun Wall Street Journal article:</p>
<p>Just a little snippet:</p>
<p>
[quote]
DURHAM, N.C. -- Despite her boarding-school education and a personal tutor, Maude Bunn's SAT scores weren't high enough for a typical student to earn admission to Duke University.</p>
<p>But Ms. Bunn had something else going for her -- coffeemakers. Her Bunn forebears built a fortune on them and, with Duke hoping to woo her wealthy parents as donors, she was admitted.</p>
<p>Afterward, her parents promptly became co-chairmen of a Duke fund-raising effort aimed at other Duke parents. "My child was given a gift, she got in, and now I'm giving back," says Maude's mother, Cissy Bunn, who declines to say how much the family has contributed to the university.
[/quote]
</p>
<p>And, this quote just cracked me up. Ms. Bunn, talking about the prospects of getting a second child admitted to Duke claimed that she would never apply any pressure:</p>
<p>
[quote]
Mrs. Bunn says she's not twisting anyone's arm. "I told them, 'If she's qualified at all, that would be lovely,' " she says. "If she gets in, I'd be happy to stay on the parents' committee."
[/quote]
</p>
<p>Lovely, indeed!</p>
<p>I had to delete these posts. I was told this in confidence and I have friends that read this board that will know who I am talking about. Now nobody will know what I was talking about. Ya..</p>
<p>"In keeping with your ideas on aid-aware need-blind admissions, I thought you'd get a kick out of this quote from the Williams Admissions Director in the Record this week:</p>
<p>Quote:
Nesbitt said that as Williams is need-blind, the admission staff does not review financial declarations made by families. Instead, they look at zip codes and the level of parental education to estimate socio-economic status of families when making admissions decisions."</p>
<p>I told you - there is not a single 'need-blind' school in the country. If there was, they couldn't plan. They couldn't budget. Instead, every year, they get a class that looks virtually like the one before it. This is just admissions officers doing their job, and doing it well.</p>
<p>What's new, from Nesbitt, is that he no longer feels he has to lie about it. Yes, they could be less aware of the need status of individual applicants (though they rarely make a mistake.) But they don't admit individual applicants - they admit a class. </p>
<p>Why are we surprised when professional people do their jobs, and do them well? Prestige colleges get the classes they want - that's what they pay admissions officers good money to produce. If Williams has a lower percentage of financial aid recipients than 30 years ago, it is because they intend it that way - there is no lottery, and no accidents. If it looks like affirmative action for rich (mostly white) folks, that's because it is. Walks like a duck, quacks like a duck....</p>
<p>Why shouldn't they publicly auction off a certain percentage (say 10%) of places to the highest "qualified" bidders? They essentially already do that behind closed doors? Why not openly, and let the free market rule? How could anyone object to that? ;)</p>
<p>I think everyone knows that giving $5 million to any school will get any kid but the truly unable to make it through in. Hardly news so don't worry!</p>
<p>But why should it be $5 mil for just one seat?. Why not, at a college of 5,000, sell off four or five hundred of them? It's either that, or tuition goes up. Come to think of it (given Shapiro's argument), tuition will go up anyway, and folks will line up to pay it.</p>
<p>Mini:</p>
<p>Speaking of a calculated economist's view of education, I found this paragraph in the essay by one of the trustees who hired Morty to be very provocative:</p>
<p>
[quote]
FOLLOW THE MONEY
The resources of selective liberal arts colleges do not depend solely on the tuition of current students, of course. As in the past, many of them continue to benefit from extraordinary generosity, and here a discussion of the economic model begins to overlap with marketing. Colleges have two sales departments, admissions and development. The former is creating some problems for the latter, which already faces difficulties from outside forces. Suppose, for instance, that the lofty admission goals at the better schools were met. Each incoming class would be geographically and racially diverse. Most students would go on to a graduate school (or two). The academic quality would be so high that many graduates would pursue careers in research and teaching. This would mean that their alumni would include fewer members of families with substantial net worth, the surest course to having capital wealth to contribute in the future. Fewer would wind up living near the college, the easiest way to maintain alumni involvement. More would enter the job market with high debt, delaying for many crucial years any established habit of contributing to the college. More would hold dual loyalties, with a strong tug at their
pockets from their professional graduate schools, which would often be geographically closer to their chosen homes, especially in fields like law or medicine. On the face of it, the alumni of the future would then be less able and less likely to support the college and its students than were the alumni who supported past undergraduate years. That is not to say that admission offices should not go ahead and pursue their current goals. They should, but there may be some unintended consequences.
[/quote]
What I find provactive is that a trustee of a college with a reputation for academic excellence would have given such obviously careful consideration to the fiscal downside of that emphasis. </p>
<p>If I read Neeley correctly, he seems to be suggesting that you want enough academic rigor to be prestigious and attract high-income students. The academic rigor is a selling feature, like leather seats or a power moonroof. But, you don't want so much that your students actually go into low-paying careers like research or public service or teaching.</p>
<p>As I look at the landscape of very selective colleges and universities that aren't terribly "intellectual", I start to wonder if there are any accidents in admissions. For example, are there studies that correlate varsity athletics or fraternities or even college binge drinking with investment banking?</p>
<br>
<p>Why not, at a college of 5,000, sell off four or five hundred of them? </p>
<br>
<p>Because they'd lose their value. If there are too many seats explicitly for sale, people will start to perceive the XYZ University imprimatur as a plain old luxury good that anyone can buy (like, say, a Mercedes) as opposed to something with real exclusivity and cachet (like, at the moment, a HYP degree). There would also be a supply/demand effect; the 400th richest family applying is not going to pay nearly as much as the 10th richest family, and they'd have to charge a lot less than $5 million to move the 400th seat. I don't know what the magic number is, but there would be a tipping point where the school would just be seen as that place where rich kids go, not that place that smart/accomplished kids go.</p>
<p>Mini, how much of a parent's net worth should go to an undergraduate education?
Interesteddad, nice links.</p>
<p>Mini, Id like to ask you to substantiate your assumption that Williams has a lower percentage of students receiving need-based financial aid than they did 30 years ago. Youre pretty much the resident expert on low income aid and people take what you say literally. Pretty sure isnt good enough. For sure the dollar amount is higher. Do you mean fewer students receiving aid? I'd like to see these statistics as this counters everything I read coming from the administration (and common sense.)</p>
<p>Secondly Id like some one to explain to me the relative merits of Pell grants and moneys granted to students identified through the Questbridge program. </p>
<p>This is Williams says about their low income admissions (from a March 17 article in the Record).</p>
<p>While the office of admission knows that the number of applications from low-income students is up, We will have to wait to find out if we [are] successful in bringing [those students] to campus, Nesbitt said.
Nesbitt credited the Colleges reduction of loan expectations and participation in QuestBridge, a program matching low-income high-ability students with top liberal arts colleges, for the rise in low-income applications. Nesbitt said the College has also tried to increase economic diversity by using a College Board service that identifies qualified students from lower income neighborhoods. Nesbitt said that the College sends specially-tailored letters to these students emphasizing Williams financial aid policies and affordability. </p>
<p>I tend to take Williams at their word. I believe they are aggressively seeking low income students and funding the same and I dont understand the negativity. Im not under any illusion that Williams does other than engineer their incoming class to have a reasonable balance of paid and unpaid, rich and poor, white and color, plus athletes, artists, musicians, actors, community service volunteers, plus plus internationals, Buddhists, Muslims, Jews, plus plus plus all the academic disciplines. Somebodys going to be happy. Somebodys going to be unhappy. Yes, they are "reading the economic clues" in the application but that's because they want to ADMIT low income students, not cut them out.</p>
<p>But I think the main thing that Morty and Dick Nesbitt are doing that I dont see at many other schools is trying to maintain transparency about their strategies.</p>
<p>dstark: Interesting question. I'd only been thinking in terms of % of annual income after max contributions to retirement plans. My salary funds tuition. If we invested my second income to increase our net worth, would it be worth the trade-off? The kids would get whatever's left instead down the road. But they're not likely to "need" it due to education bought now. Well, at least that's the plan. If they get testy with us as we get older (they already are ;)), we'll go blow it all instead.</p>
<p>Maize&Blue, I've been thinking about this question for awhile. It can take close to $500,000 to get 2 kids through grad school. That's a lot of money.</p>
<p>Momrath: When I graduated from Williams (which is a long time ago), roughly 50% of students received some form of financial aid (I don't think they used the term "need-blind' yet; I think that was a creation of the inflationary 70s.) Now, it is consistently in the low 40s. As I said, I think it's great that Nesbitt has lifted the veil - I really do - I wasn't being cynical. (As I understand it, the first portion of Questbridge aid IS the Pell Grant, as all accepted Quesbridge students are eligible for them. But Pell Grants are small relative to tuition, for the individual student, but big for the school -- or Questbridge -- in terms of money saved - that they can then give out to other students if they choose. A good thing, don't you think?) And sorry if you took it personally, because I don't think it is much different at most prestigious (and, I might add, excellent) institutions. The only significant difference at Williams is that the college president has laid out the "economistic" thinking behind what is going on, and Nesbitt makes it even more transparent.</p>
<p>Hanna - I would not auction off all the seats, just a small portion of them (5-10%), but I'd do it publicly. It would raise the prestige value of the other seats, and allow the institution to raise the sticker price, and, at the same time, provide substantially more financial aid to middle-income students if they chose. It's a win all the way around.</p>
<p>DStark - I have no idea what the answer is to your question. Many people obviously think full sticker price is good value, and as the sticker price goes up, the number of applications does the same. Theoretically, there is a "tipping point" where the opposite should happen (law of supply and demand), but no prestige institution seems to have reached it, and hence prices will continue to rise faster than inflation. (This often happens with prestige leisure goods, or with fetishes.) If you have lots of money (relatively, say 3X or more the median household income) then the cost represents much less of your income than if you bring in less. So it will be different depending on your situation.</p>
<p>BUT there is no intrinsic reason why financial aid for middle-income families couldn't rise as quickly as sticker prices, if the colleges so chose. The oddity here is that, unlike 50 years ago, everyone seems to think prestigious institutions SHOULD be in sight for middle income families. I certainly don't object to that idea, but back then, hardly any of them gave a second thought to a Yale, a Stanford, or a Vassar even though, relative to income, tuition and room and board were relatively low. </p>
<p>As I remember (it is a long time ago), in 1967 a year at Amherst cost 40% of the median household income; now it is about 85%.(The second number I'm sure of; the first I have to go look up.) Which means that to accept a student from a median income family, the college has to subsidize a greater part of the sticker price. Hence, total amount given out in financial aid (which, from their perspective, re: Shapiro, is not financial aid at all, but "funny money" - simply discount from the sticker price) rises, and the temptation, once it is monetarized that way, is to limit the number of students that receive it. (Hey, I'd do the same thing.)</p>
<p>So DStark - what do you think is the answer to your own question?</p>
<p>dstark: Yuk. I'm glad our analysis focused on the annual expense. In gratitude, I'm sure our soon-to-be lawyer S and possible chemist D will be very generous to us in our declining years. You can still cash out that NoCal house...</p>
<p>Well, when you get your numbers wrong, you should report the correct ones. In 1967, the median household income for a household with 4 people (which I think is a reasonable assumption for what we are looking at) was $8,991; the cost of a year at Amherst was roughly $4,800. So the cost was roughly 53% of a year's income. Now the median household income (for a household with 4 people) is roughly $63k, and a cost of a year at Amherst $43k, or 67% of a year's income. So the cost of prestige colleges has risen, but not as fast as I thought relative to the median income. However, the number of folks in upper income brackets has risen at a much greater rate and, combined with increasingly numbers of legacies and developmental candidates (most schools grew larger in the 70s and 80s), as well as rising expectations of the upper middle class, this puts tremendous pressure on prestige schools to increase the percentage of wealthier students. It is understandable why it would be difficult to withstand.</p>
<p>It would be unfair not to take into account future investment returns into the equation. In health insurance, rates have skyrocketed not only because costs of medical goods and services have increased, and we are living longer, etc., but also because the return on invested income that insurance companies used to be able to count on just isn't dependably there anymore. Costs of personnel at top colleges continue to rise, and that's the bulk of spending. But if endowment levels off, colleges have a choice of either using a higher percentage of investment returns in subsidizing operating expenses, lowering expenses, or raising tuition income (i.e. both raising prices, and lowering the discount, through fewer students receiving financial aid.) Trends seem to suggest that, for most prestigious institutions, that's exactly what's happening (though there are exceptions.)</p>
<p>Now if they had half of their portfolios in California real estate....</p>
<p>Mini, I know that nobody should go into serious debt or jeopardize their retirement to go to a school when there are so many choices.</p>
<p>Then it gets complicated. When I look at the average income of the people in this country and look at how income is trending compared to college costs (thanks for the Amherst numbers), It is pretty clear to me the average person is not going to see the payoff.</p>
<p>Like you said before, the average person didn't even think of going to the top private schools back in the old days. I never heard of Williams until I was 40 years old. Never heard of Swarthmore until I was 45, so I guess we have made some progress and there is a chance of a payoff.</p>
<p>My guess is if you work in certain jobs, there is a shot at a payoff and being a lawyer is one of them. </p>
<p>My conclusion, certain careers will see a payoff, but for most people, it is not going to happen.</p>
<p>I think we are caught in one of the best marketing games of the last 30 years and I feel like a fool for playing the game.</p>
<p>I'd like to quit the game, but my kids are now playing it. :)</p>
<p>Momrath - I wanted to clarify that my uncertainty is not based on not knowing the make-up of the student body, but the fact that I don't know when Williams says they abandoned merit aid. (I'm searching to find out.)</p>
<p>This is an interesting place to start:</p>
<p><a href="http://www.ephblog.com/archives/000779.html%5B/url%5D">http://www.ephblog.com/archives/000779.html</a></p>
<p>In another quote from Nesbit, "The Collee has made a concerted effort to expand the percentage of students on financial aid. We're finally beginning to see fruits of those efforts." </p>
<p>Again, I have to take them at their word. Their ulterior motives may or may not be altruistic (I tend to think they are, but then I'm an optimist) but either way, Williams is reaching out to low income kids -- and URMs and non-athletes and gays and internationals etc, etc. -- because it makes good economic sense AND because it is the right thing to do.</p>
<p>Thanks for the Ephblog link. I agree there is a degree of grey area in the realworld overlap between need based aid and merit aid. When need based aid is arbitrary, inconsitent, subject to interpretation and negotiation it becomes, in effect, merit aid. I also agree that it is the obligation of the adcom and finaid office to put together the best class they can for the least money. Or as my boss says, spend it if you have to; save it if you can.</p>
<br>
<p>how much of a parent's net worth should go to an undergraduate education?</p>
<br>
<p>One family's take: There are 4 kids in my family. All 4 of us went to east coast colleges on CC's "top" list, and three of us to elite private grad school (1 med, 2 law). Add to this fifteen years of private school for each of the four of us, so my parents were paying tuition for at least one child without interruption from 1969 through 2002. My parents could have retired in comfort by now if they'd sent us to public school. Instead, at 64 and 61, they're both still working full time (not to mention their much lower standard of living over the last 30-odd years). There were a lot of years when the majority of their after-tax income went to tuition.</p>
<p>My parents' perspective on the whole boondoggle is that the entire purpose of being in America (they're 2d-generation) and working hard is to give your kids the best possible education. They're honestly mystified by parents at their income level who will only pay for public school, or who expect their kids to take out loans. Education is not just their number one priority; it's practically their sole priority.</p>
<p>So their answer would be, as long as we have a roof over our heads, we'll pay what it costs.</p>
<p>I admire your parents Hanna. I guess it comes down to what sacrificing your retirement really is. A lot of my neighbors would consider that having to downsize from a home that has appreciated to a couple of million in the CA frenzy and not be able to fund their travels. I plan to risk sacrificing those things. But all should make sure they have planned for a decent roof over their heads and medical care!</p>
<p>Interesting article in today's NYT that could have been written by many here: Do you owe it to your kid to pay for an ivy if he gets in? The author had not made up his mind.</p>