On a number of college visits, we were told in group sessions by financial aid folks “don’t worry about sticker price because no one pays it.” Its not totally true because there are some people who do pay sticker price. But the message (and its impact) is clear.
@GMTplus7 I see no problem with having affluent families pay more. At Harvard, you can get some amount of financial aid with AGIs up to $180-190K. However, over 50% of student get no financial aid. There are a lot of extremely wealthy students. And at my boarding school, many students weren’t applying for FA because they said their families could easily afford the tuition.
Interestingly, most people see no problem with spending other people’s money…
Someone making $180k is essentially expected to pay the same amount for college as Bill and Melinda Gates.
^ interesting…you’re OK with the notion of income based pricing, just not the particulars of the scale?
I am not in favor of forced subsidies by people who can afford to pay more simply because they can afford to pay more. Wealthy people can afford to pay more for everything. Why not force them to subsidize everything?
In addition to that, such subsidies help further drive up the price (bringing calls for more subsidies further driving up the price and the cycle continues). Such that in terms of non-merit aid schools, there is a group of kids from families with too much income to qualify for need based aid but not enough income to pay full freight. And as subsidies continue and the price of college continues to spiral upwards, the size of that group increases. I don’t expect anyone to do anything about it as most people don’t even want to accept the reality that subsidies increase prices.
Friend who visited Notre Dame asked the person making the financial aid presentation if she knew they were pricing certain groups of kids out of the school. She acknowledged it but couldn’t do anything about it. As long as the number of full freight kids exist, the process can continue. As the price climbs towards $100k/year at elite private schools (where some project it will be when kids born today enter college), the group of full pay folks will likely be much smaller. Still will work out fine for certain schools though not for all.
And ultimately, the current system isn’t sustainable. Something has to give.
@saillakeerie. You are correct on all points. That problem in these families (parents with too much income to qualify for need based aid but not enough income to pay full freight) has even more implications. That type of family may be able to pay a bit more than a low income family, but is severely drawing on retirement savings. What if that family doesn’t qualify for much merit aid either (no need aid, little merit aid)? Then they are WAY out of luck. My guess is that there are even more students in that bucket.
Of course many low income families don’t have retirement savings at all to draw on…
That is no excuse to screw over the people who saved.
How are they screwed over? By the absence of financial aid at the handful of schools that actually meet need?
Screwed over is a little exaggerated. Though the “handful of schools” at issue happen to be the top x number of schools in the country.
A car is a commodity. It has a sticker price. Often it has a “special program” discount, a rebate, and a phalanx of sales and marketing people trying to convince you that one brand is worth the price difference because of the prestige or the emotional connection.
With the ease of accessed to information afforded by the internet, a college has become a commodity, with an army of sales and marketing people going on and on about prestige and emotional connections…
…and the most difficult to get into.
No one said otherwise.
The problem is the costs of post secondary schools. Kids are going to college and graduating with $50000 in debt before they have ever even had a job. Student debt is 1.1 trillion dollars in the USA. Our total country debt is 9 trillion. Does the knowledge learned in college have any real value over the debt accrued in college? Don’t get this topic confused, the high costs of USA education especially compared to other countries that have free education. Economically we continue to hurt ourselves on a global level.