DATA: Full-Freight and "Middle-Class" Customers

Parents Forum
1

<p>Because this has come up several times in recent discussions, I thought I’d post the latest data (from PR) on “full-freight” customers at selected private universities and colleges, issue a couple of caveats, and some thoughts. Note – it’s just data, and make of it what you will. To any interpretation I make of it, add two heaping handfuls of salt.</p>

<p>First of all, a “full-freight” customer is one who receives no need-based grant aid, this at schools that will likely cost roughly $180k over four years, when all is said and done. Generally speaking, that means a minimum family income of around $155k (assuming a family of two, a house, two cats in the yard….). Could be higher, rarely lower. Basically, top 5% in American incomes. Note that the colleges and universities listed here might vary much more between each other based on the median incomes of their higher income students than in the percentages of middle or low income students. But at the 50% line, half the student body comes from the bottom 95% of the population in income.</p>

<p>The main caveat is that this list doesn’t take “merit” (i.e. non-need-based) aid into account. The numbers for some schools might change, but likely just slightly, for schools where merit aid obviated the need for any need-based aid whatsoever. Anecdotally, I think that is rather rare – more usually, aid awards are a combination.</p>

<p>Looking at the overall trend, even though costs are rising, the percentage of full-freight customers seems to be nudging upward. One can tell this by taking first-year students receiving need-based aid and comparing them with the entire student body. There were some stunning changes, but I don’t want to report those, as they may be statistical anomalies.</p>

<p>The fact that there is a certain percentage receiving aid does not tell us much about them. Pell Grant percentages indicate the proportion of those below $40k in income or so. Williams and Harvard have said publicly that 70% of those receiving aid are in the top quintile ($100-$150k.)</p>

<p>So what about the middle class? Well, consider this – which I found quite shocking. Amherst (the numbers by the way are similar for USC) has had a major push to enroll low income students. (Amherst offers no merit aid.) Yet of the total student body, only 46% receive need-based aid. If 70% of those are in the top quintile, then only 13.8% would come from families below $100k in income. Yet, according to Amherst’s own data, 15.8% of students receive Pell Grants. What this says (correcting for the minor “statistical impossibility”), is that there are NO MIDDLE CLASS STUDENTS (incomes $40k-$100k) at Amherst. None. All right, if you hunt around the campus, I’m sure there are a few. Maybe we could ask them to raise their hands. But statistically, they ain’t there. (Same would be true at USC). While not so extreme, the same trend is likely true at a large majority of the schools below. </p>

<p>It’s just data. Have fun.</p>

<p>Private Universities</p>

<p>Rice – 67%
Emory – 63%
George Washington - 61%
Brown – 60%
Boston College – 60%
Vanderbilt – 60%
Tufts – 60%
Tulane – 59%
Yale – 58%
Johns Hopkins – 58%
Duke – 58%
Northwestern – 57%
UPenn – 56%
Georgetown – 57%
Washington U. – 57%
UChicago -55%
Stanford – 53%
Harvard 52%
USC – 52%
Notre Dame – 52%
Princeton – 51%
Cornell – 51%
Columbia – 51%
Brandeis – 51%
Dartmouth – 50%</p>

<p>Lehigh – 48%
Rochester – 44%
NYU – 44%
Caltech – 43%
MIT – 39%
RPI – 28%</p>

<p>Private Liberal Arts Colleges</p>

<p>Washington & Lee – 71%
Davidson – 66%
Holy Cross – 61%
Rhodes – 61%
Bates – 60%
Colby – 60%
Franklin & Marshall – 60%
Barnard – 59%
Williams – 58%
Middlebury – 58%
Kenyon – 57%
Furman – 57%
Haverford – 57%
Skidmore – 57%
Colorado College – 57%
Colgate – 56%
Conn. College – 55%
Whitman – 55%
Amherst – 54%
Bowdoin – 54%
Scripps – 54%
Trinity 53%
Swarthmore – 52%
Wesleyan – 52%
Union – 52%
Denison – 51%
DePauw – 50%
Grinnell – 50%</p>

<p>Bucknell – 49%
Pomona – 49%
Dickinson – 48%
Occidental – 48%
Vassar – 47%
Harvey Mudd – 46%
Lafayette – 46%
Bryn Mawr – 46%
Hamilton – 45%
Gettysburg – 44%
Claremont-McKenna – 43%
Carleton – 42%
Oberlin – 40%
Wellesley – 40%
Smith – 40%
Agnes Scott – 36%
Mount Holyoke – 35%
Wabash – 32%
Macalester – 31%</p>

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<p>Mini, I said on another thread that the middle class is being squeezed out. Let's see at Emory everything else the same, one student has a 3.9 and needs $20,000, one student has a 3.75 and doesn't need. Who gets in?</p>

3

<p>I think you've got to correct for the geographical origin of the student body. The child of a police officer and a nurse who grew up in Queens and went to public school has a household income of more than 155K. If the nurse has a neonatology specialty, that goes even higher. If the cop does overtime or moonlights for a security agency, it goes even higher. It still makes the kid "middle class" for the purpose of your discussion-- after taxes and after paying rent on a two bedroom apartment , their disposable income looks a lot like any other cop/nurse combo in Little Rock or Cincinnati.</p>

<p>So -you are ignoring the fact that schools with large enrollments from SF and NYC are going to have middle class kids with seemingly large incomes, no assets, high taxes, and a solid middle class upbringing.</p>

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<p>There are many "full–frieght" customers that will be paying off student loans for many, many, years, largely due to the equity in their homes, more so than their income. Also, depending on what part of the country one is from, $200,000 per year can buy about the same as $80,000 elsewhere.</p>

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<p>So -you are ignoring the fact that schools with large enrollments from SF and NYC are going to have middle class kids with seemingly large incomes, no assets, high taxes, and a solid middle class upbringing."</p>

<p>Sorry, but for every San Francisco, there is an entire state of Kansas. One of the things that is interesting is that, if you look at the schools with, say, a large California draw (Stanford, Pomona, Scripps, USC), they just don't look that different when it comes to full-freight customers. Yet, the median family income for a family of 4 in the state of California in 2005 was $62.5k. The median family income in New York City is around $47k - add around $10k for a family of four. Median means that half make less than that. Do you know how statistically rare that makes a family consisting of a police officer and a neonatology nurse?</p>

<p>What you seem to be saying is that there are many folks in the $100-$150k category who attend these schools, and receive financial aid. There's no question this is true (as both Williams and Harvard state openly.) But below that?</p>

<p>There are also "full-freight" customers who will choose to pay off lots of loans. For whatever reason, the colleges find these customers do not have a need for need-based assistance. Every single one of the "568" schools is on the lists above, meaning students at those schools are essentially unpenalized for high home values when it comes to financial aid. Most commonly, according to the schools, loan amounts are in the $14k-30k range. They are clearly in much better shape than those who, for whatever reason, statistically don't even exist on the same campus.</p>

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<p>I think cost of living is something that definitely needs to consider. I would consider myself middle class-- my mother works for a not-for-profit organization, though my dad is paid pretty well as an engineer. However, we live in a small townhouse outside Chicago (high cost of living) and I could not afford to go to school wherever I wanted. We could afford maybe half of the cost of a private university. So even though we were "full-freight" as you put it, I was still greatly dependant on outside sources to go to college.</p>

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<p>Mini's point is that students from families in the $40-$100K range are being squeezed out -- not that families who make $100-$200K can't be called "middle class". The vast majority of American families have incomes in $40-$100K range, or less - no matter what you call it, and no matter where they live. Mini is saying that they are being squeezed out in college admissions.</p>

<p>My guess is that he's right, for reasons related to the way the financial aid system works. I think that in the $40-$100K, families are unlikely to get sufficient financial aid to justify the cost of a private college, so my guess is that yield is particularly low among that group. That group is also more likely to seek out awards including merit aid, which can tend to favor less selective colleges and universities -- again because financial need is real, but the aid given by colleges is not realistic. </p>

<p>I mean, lets assume a family of 4 with a $65K income and a $15K EFC? That family may already be stretched to the limit with mortgage payments, health care costs, etc. - how are they going to come up with $15K? As to whether the colleges have de facto discriminatory admission practices that tend to exclude students from that group - I don't know. </p>

<p>I'll let everyone know in the spring how my adventure with financial aid comes out for the coming year -- I'm definitely near the low end of the group Mini is worried about.</p>

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<p>I'm in that group Mini is talking about. Grandparents' inheritance paying ( left to him). My feeling was only if he got into a dream school would it get used. Otherwise, state U and others would have been free. Hopefully, he'll have a great experience and will earn his way into world.</p>

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<p>Mini, you're a smart guy. There is California and there is California. SF is a lot different than Sacramento.</p>

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<p>Mini,
Thanks for the info. One point: I think USC differs from Amherst since it does offer merit aid. I know two solidly middle class college freshmen (valedictorians) from different families and different public schools who chose USC with its substantial merit aid over Stanford with no aid (merit or financial). Also, how does the athletic scholarships factor into this. Wouldn't colleges that offer them see more middle class kids?</p>

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<p>Mini - what would be interesting to me is % <em>actually</em> paying full freight, ie receiving no need-based OR merit-based grant aid. Are these data not available or am I unusual in being interested in that? For example, I would expect the 59% fullfare at Tulane would go down subsantially while hte 52% for Harvard would stay exactly the same.</p>

<p>Also, although there are only a few such schools, Rice - at the top of the list - is noted for the overall lesser cost of full freight than other similarly top-rated schools: Rice 2005 ca. $32.9K, Amherst ca. $41.6.</p>

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<p>Here is the aid breakdown for UChicago for 2003 - 2004. </p>

<p>There were 205 applicants who make over $117,000 per year with 60 actually receiving aid averaging $16,266.</p>

<p>The middle class family numbers are as follows:
Income: 45,000-53,999<br>
Applied for aid 60
Received aid 59
Average amount given $32,808</p>

<p>Income: 63,000-71,999<br>
Applied for aid 66
Received aid 61
Average amount given $28,320</p>

<p>Looks like a pretty fair distribution, the middle class seems well represented. I'm sure the numbers are similar or better at other similar colleges.</p>

<p><a href="http://collegeadmissions.uchicago.edu/level3.asp?id=68%5B/url%5D"&gt;http://collegeadmissions.uchicago.edu/level3.asp?id=68&lt;/a&gt;&lt;/p>

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<p>iDad - Are those figures for the entire school? If so, they're actually kind of anemic (120 middle class families out of 4,000?)</p>

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<p>..but I have pointed out many times that people sneer too readily at OUTSIDE aid. Outside aid doesn't have to be some silly commercial contest or whatever. There are large federal grants available for undergraduates (such as NOAA's, worth 25G, the Morris Udall, etc.), and many renewable scholarships (my child, bright but no genius, and no 1600 board scores either, got three worth $10,000 each over four years - a total of $80,000 in outside money, usually by recycling the same essays). </p>

<p>Sigh. Every time I post something like this, people pat me on the head and say, "That's nice. Now let's go back to looking at the aid the COLLEGE gives out."</p>

<p>If we had done that, we would have nothing, and would be full freight payers.</p>

<p>That said, I am horrified at the squeezing out of the middle class and I applaud Mini, as always, for finding such informative data.</p>

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<p>What the heck, I'll join the fun. I examined the UChicago chart, which purports to be for 2003-2004 Freshman, and the data raises a fair number of additional questions. Are there really 29 enrolled students with family incomes under $18,000, three of whom were declined assistance? What's up with that? And the chart only shows those who applied for UChicago aid. And there are a number of caveats UChicago attaches to the data as well. All this aside, if we put our KISS blinders on and separate freshman FA award winners into "Economically Challenged" (family income under $36,000), "Doing OK Economically" (family income $36,000 to $98,999), and "Doing Well Economically (family income $99,000 and up) the data STILL don't help us much, because both of the following are "true":
(1) Nearly as many enrolled freshmen with high family incomes APPLIED for financial aid as those with middle family incomes RECEIVED aid --- 295 versus 352, respectively.
(2) Nearly 90% of enrolled freshman with middle class incomes received GRANTS exceeding 50% of the UChicago COA --- 312 of 374. </p>

<p>These two computations suggest that (A) UChicago COA can be a financial burden even for those families with high incomes, and (B) almost all students with less than "high" family incomes would quality for financial aid (and would therefore be expected to apply for FA). </p>

<p>So (drum roll please) the data suggests that at UChicago the incoming 2003-2004 Freshman Class of approximately 950 students contained 97 students with family incomes under $36,000 (ie, 10%) and 354 students with family incomes between $36,000 and $98,999 (37%) and 499 students with family incomes exceeding $99,000 (53%). Do I believe this to be true? No I don't. Working with data is a delicate business.</p>

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<p>Oh, let me add my voice to those who applaud Mini for his advocacy. Here in wealthy Connecticut kids graduating from private high schools tend to attend private colleges, and kids graduating fom public high schools tend to attend public colleges (if they attend college at all). If you're a public school student outside the top 10% of your class the statistical probability of attending a private university is pretty small, as is the likelihood of your public university offerring any financial aid whatsoever.</p>

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<p>There are many things that contribute to the EFC calculation and subsequent need-based award that I can't glean from the data. We are up at the tip of the 40K-100K and eleven of the schools on Mini's list offered substantial (over half grant) need-based aid for our first and for the second (over three quarters grant). But we have two in now, we live in an area where housing has not appreciated, and we have no large inheritances etc....plus an additional two children in the pipeline. I'm sure all of that factors in when they look at our family.</p>

<p>And with regards to the people who declined--maybe they declined work study/loans? Those are considered "meeting need." Each of my sons had one private school that went very heavy on loans and very little on grant--to the point where they were not even in the same ballpark with the other schools. </p>

<p>Here's something else that has intrigued me. How many at W & L or Emory (or any school that gives out 1/2, 3/4 and full merit rides) that would have been full freight received their Emory Scholar or George Washington Scholar awards? Are those awards more oftentimes given to students who would not receive the need-based? I remember being disappointed when our son was not selected for the 1/2 ride at W & L, but when we received the financial aid award, it was greater than that scholarship would have been. We know a student at Rice this year that would have received little if any need-based aid, but they did get a merit award that pays for everything but room and board. I can't remember what it is called, but there was a special interview weekend. It sounds similar to what Emory does.</p>

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<p>johnwesley: Those figures are for the class of 2003-2004 First Year students, just under a 1000, and are only examples, see the linked chart for more detail.</p>

<p>Newhope: I'm curious, what do you believe not to be true, the 50+ percent with incomes over $99,000 or the 10% under $36,000, or both? </p>

<p>I noticed last year that 60% of their students came from a public HS. Makes the distribution a little more likely.</p>

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<p>
[quote]
Are there really 29 enrolled students with family incomes under $18,000, three of whom were declined assistance? What's up with that?

[/quote]
</p>

<p>The "fine print" at the top point of the UChicago chart points out that the "family income" listed in the table is the income of the custodial parent. The fine print also states that financial aid awards are also affected by the non-custodial parent's income. So the three families with income under $18K who received no aid awards might have had wealthy non-custodial parents. (Another possibility: families with very large assets but temporarily low incomes because of business losses or capital losses, etc.)</p>

<p>As Texastaximom points out, there's a lot more here than meets the eye.</p>

<p>Mini's point still stands clearly confirmed here---the table points out that a large number of UChicago students didn't even bother applying for financial aid, which means that the top 5% of income distribution must indeed be overrepresented there.</p>

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<p>idad: thanks for posting. One thing that jumps out is that it appears that UofC expects everyone to have an efc of $10k regardless of income. (Actually, it's higher than that since loans have to be repaid by a future efc.) Looking at the under $40k group, to which H and P give out full rides, the COA is still $10k. It increases to $12-13k for the under $60k group.</p>

<p>newhope:</p>

<p>which part of the assumptons/conclusions are you questioning, the fact that it appears that over half of the class has incomes above $99k? If so, why?</p>

<p>To add to Blossom's point: two married elementary school teachers in many parts of Calif (assume NY, too) could easily be in excess of $100k AGI.</p>