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[quote]
Nearly 60 percent of 2,500 high school seniors were considering a less prestigious college for affordability reasons, according to an early October survey...</p>
<p>There was a time when Sally Rubenstone, a Massachusetts-based senior adviser with ... College Confidential, would see people roll their eyes as she advised putting a "financial safety school" on their list. Not this year. "With uncertainty in the stock market ... [families] are compiling almost two separate lists – one that's viable if the market bounces back, and the other one that's based more on bad news," she says.
<p>enough posts about people choosing cheaper options for college- yes the economy is bad so ppl fear and choose cheaper options. this is like the 5th marked post on this</p>
<p>Mostly it’s media hype. Students may be applying to a few more moderately priced schools than they otherwise would have, but what are the odds they will change enrolment patters by the time they make their decisions in spring. If credit is flowing again, and potentially at lower interest rates, it’s just as possible that the decisions turn another direction.</p>
<p>I don’t agree. Home equity loans are no longer something many people can count on for borrowing. Home valuations are dropping in many areas. This is a real reason to keep parents in a much more conservative mode re accumulation of debt.</p>
<p>This was published in 2006 but much still applies- [NAICU</a> - Publications](<a href=“http://www.naicu.edu/Publications/default.asp]NAICU”>http://www.naicu.edu/Publications/default.asp) “Twelve Facts That May Surprise You About America’s Private Colleges and Universities (2006), dispels the myths and documents the affordability, diversity, and success of private colleges and their students.”</p>
<p>[Big</a> Trouble, Potentially, for Little Colleges :: Inside Higher Ed :: Higher Education’s Source for News, Views and Jobs](<a href=“http://www.insidehighered.com/news/2008/10/17/moody]Big”>http://www.insidehighered.com/news/2008/10/17/moody)
“Colleges with large endowments and high bond ratings have a safety net. Those institutions will probably be approved to borrow more money to pay off bonds that are due on accelerated time lines, Nelson said.
Problems may arise, however, for expensive colleges with relatively small endowments — substantially below $100 million — that rely heavily on tuition revenue. Those colleges may find themselves with unexpected payments due on variable rate bonds and difficulty finding the loans they’d need to pay up.”<br>
“Since colleges are often more insulated than other institutions from the true perils of budget shortfalls, it’s notable that even a small sector of higher education appears to be in trouble, Nelson said.
“We’re not concerned about the vast majority of colleges,” he said. “That message can’t get lost. The vast majority of colleges are going to be fine. But for any of them to be in financial stress is kind of news.””
Go to [NACUBO</a> Home - Research - NACUBO Endowment Study - Public NES Tables](<a href=“http://www.nacubo.org/x2376.xml]NACUBO”>http://www.nacubo.org/x2376.xml) for 2007 list of college endowments</p>
<p>I too think that this is overhyped. There have always been plenty of able high school graduates who couldn’t count on family money to get through college and had to work their own way through, perhaps by enlisting in the armed forces beforehand. This is not at all a new phenomenon.</p>
<p>“I too think that this is overhyped. There have always been plenty of able high school graduates who couldn’t count on family money to get through college and had to work their own way through, perhaps by enlisting in the armed forces beforehand. This is not at all a new phenomenon.”</p>
<p>Overhyped, have you seen the stock market today. I know that you might think this is short term, but there are plenty of people out there being layed off, lots of companies downsizing, Lots of investments worth about 40% less than they were at the beginning of they year. Overhyped? Do you live in such an insulated world that you think this economy isnt going to effect a lot of people. Do you really believe that people will be able to get home equity loans, or that all colleges will be doling out huge funds of aid. Don’t kid yourself. This may not be a new phenomenon, but this recession is going to have impact on college applications, and if not applications, than it will totally screw with the acceptance rates once the dissapointing financial aid packages are delivered.</p>
<p>I agree. People who cannot shell out their FAFSA figures will not go private if home equity is no longer safe/viable/optional for use in making monthly payments and private loan sources are tightened and jobs are shaky and retirements have been hit hard. Ability for parents to pay down home equity loan balances in a reasonable manner will be reduced by other market declines, including a market that makes homes in many areas unsellable or not worth what they were worth a year ago. There are many people who will not see any relief whatsoever from private college financial aide offices even with the new more generous no loan packages that have been extended to more families in schools with strong endowments. Families will not take the risk of shelling out 200 thou in the next four years if they don’t have a very strong financial base in place.</p>
<p>I’m asking if the world you live in includes lack of insulation from the kinds of families who LONG have had to trade off low out-of-pocket cost for college with finding a good academic match for their children. There are a lot of figures showing that throughout my lifetime high-income, low-ability high school students enter college and complete college at higher rates than low-income, high-ability high school students. </p>
<p>Here are some links about the issue. The overall picture in the past few decades has been that high-ability, low-income students are at a clear disadvantage in the college admission process compared to low-ability, high-income students. (The links below are in approximate chronological order of publication, from oldest to newest.) Is anything changing recently about this? </p>
<p>We won’t have to wait long to see what effect the financial meltdown has on college admissions. In a few months we’ll know.</p>
<p>I suspect that the effect will be a shock for private colleges and universities. Here in California the cost of a CSU education is under $5K per year for students living at home. Most students in California apply to a CSU school even if they have no intention of going to one. This would allow these students, or more likely their parents, to opt for a very low cost education at the last minute. It would create havoc for the CSU and even UC schools if they give out too many acceptances and get a far higher yield than expected.</p>
<p>Investment portfolios are not going to bounce back in time to make families feel they can afford an expensive college or university in time for Fall 2009 and maybe not for the following year or two as well. If a rush to CSU and UC schools occurs as I think it might, it would result in these schools becoming far more selective and in the privates going crazy trying to maintain their enrollments. The really elite schools won’t have a problem, but what about a school like University of San Diego which costs as much to attend as an Ivy? It isn’t much more selective than San Diego State University and far less selective than UCSD. How does a parent follow through on a promise to consider USD when a much larger variety of educational opportunity, albeit without the private school handholding, exists on the other end of Mission Valley at SDSU?</p>
<p>Maybe things aren’t as dire and I think they are, but remember how sanguine some people were about the financial markets just a few weeks ago. This could get really bad for the vast majority of private colleges and universities which are not highly ranked for their academic programs and yet charge premium tuition.</p>
<p>I read a piece by John Maudlin last night and he pointed out that two very smart guys in the investment world had different opinions on the market. Buffett said that he’s buying stocks. The other guy, who called the 2000 crash accurately said recovery in the markets begins in 2010.</p>
<p>Maudlin’s take is that it’s fine to be buying stocks now if you’re a good stockpicker and Buffett is known to be a very good stockpicker. So that might explain the differences of opinions between two smart investors.</p>
<p>I’m pretty curious myself about what will happen with colleges though I think my son is happy where he is. It could make things interesting for our daughter though if it gets harder for high-school students to take courses at colleges. Hopefully things don’t get tighter at her CC. They’re getting a 5+% budget cut as it is.</p>
<p>One other funny thing: the CSM is going from a daily to a weekly. Looks like the economy has hit them pretty hard too. We would like to visit their real estate properties in Boston to enjoy them while we still can.</p>