<p>How do you think the current economic crisis (or depression, who knows) will affect college enrollment? Will schools run out of scholarship money? Will admissions rates rise?</p>
<p>I think loans will dry up, causing universities to cut tuition rates. State schools will pick up some of the private school students so they shouldn't suffer as much.</p>
<p>D was at meeting with an admissions rep & a dozen seniors in a school conference room yesterday. I told her to ask if this private school was going to adjust their aid/scholarhsip policy given that everyone's 529s have tanked. The rep said she'd been on the road for weeks, so hadn't talked about this with her office. She added that FAFSA & the profile should take into account these economic problems. We shall see.</p>
<p>A friend in NY told me that their h.s. guidance counselors are warning the kids that the SUNYs will be bombarded with applications this year & advsed the kids to put extra effort into their applications.</p>
<p>I agree, private school will be effected the most. Just wonder how they will adjust their early decision process which is due very very soon. Any thoughts?</p>
<p>For Privates, I anticipate that the non-returning freshmen number will at least double for Fall 2009. If a top ranked private usually loses 2%, it will lose 4%. If a Top 50 private usually loses 5%, it will be 10%.</p>
<p>It should open additional spots for freshman applicants... just guessing, but I think the schools will have to count on their yield decreasing sustantially, and fill up more slots to backfill the non-returning freshmen who will be off to State U.</p>
<p>Lastly, I think we might see a trickle down of applicants with family incomes of say $100,000 - $150,000, who will be accepted to but get very little aid at the Top 20 schools, choose a Top 50 instead where they will get quarter or half tuition merit scholarships. It's going to be a VERY interesting April as merit and scholarship money is evaluated.</p>
<p>Lastly, the myth of a lucrative Wall St. career if only junior can get into a Top 10 school has been dealt a body blow. Will parents still mortgage what is left of their home equity to bankroll junior's "networking at Top 10 U" if Wall st. is not so secure after all? Incidentally, I recently learned that Among the Top 10 schools, which average about 1,800 juniors this past March (pre meltdown), only about 10 per HYP and less than 5 from the other schools got Goldman summer internships. For those keeping odds, that's less than one student per 200 students, or 0.5% odds. In the current environment, I would guess odds to be more like 1/500.</p>
<p>I suspect that applicants will limit their targets in terms of geography. Travel is getting too expensive.</p>
<p>Public colleges and universities are going to be bombarded. In my state it was already getting tougher to get into the popular ones. Unfortunately, many were already showing signs of wear and tear due to under funding from the state, which is worsening under current conditions. Another result is that they have been losing a lot of top professors and department heads. Nonetheless, they are still the best bargains around and they will undoubtedly have a crush of additional applicants. A couple have already discontinued automatic transfers from community colleges to help slow down the wave of applicants --overcrowding in classrooms, for student services, housing etc., are becoming real issues. It's also more difficult to get into all the required classes within four years. </p>
<p>I wouldn't count on big increases in FinAid from private schools, save a lucky few. This is especially true for middle class students. Endowments are getting crushed right now, and I think some alums may also have to scale back on giving. </p>
<p>In short, I think parents and students are going to have to be much more industrious going forward. I think many of us are also going to have to adjust our expectations. There will still be great opportunities for the best students, but those that fall in the middle of the pack are going to have fewer options. </p>
<p>Just my two cents.</p>
<p>i think a lot of people are overstating the current situation.</p>
<p>one, things werent exactly rosy LAST year, either. i remember quite a few threads about how the stock market would negatively impact yields, yet this board was nonetheless filled with posts about over-crowded dorms come september. my lac over-enrolled by nearly 5% despite accepting nearly 1000 fewer students than it did five years ago AND upping the target class size by 25.</p>
<p>two, we are talking about a relatively small percentage of students at most top 50 privates who are a) not on financial aid AND b) not truly wealthy. </p>
<p>three, any decrease in regular decision yield can be very quickly nullified by accepting a few more wealthy early decision applicants. </p>
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<p>in other words, i see a die-down in the paranoia, but i dont think most top colleges are going to be heavily impacted. after all, having your acceptance rate move from 18% to 22% to accommodate a few more wealthy customers does not represent a heavy impact. </p>
<p>i would be concerned about chasing merit aid offers from less-wealthy privates, however. those that are unable to effectively fund-raise and rely heavily on the full pay customers rejected by schools higher on the academic pecking order might really struggle to make ends meet if recovery does not begin soon.</p>
<p>I also wonder if current market troubles will give an advantage to kids that are not applying for need-based FA. I understand the idea of "need-blind", but it is so easy for an adcom to peek whether "Will apply for fin aid" was checked or not.</p>
<p>^^ I have to respectfully disagree with ericatbucknell. An awful lot of top-credentialed college-bound students come from families with incomes in the range of $100,000 to $250,000. These students can expect little to no need-based financial aid but, even at the upper end of this scale, their families won't find it easy to just write a check for $50+K for junior's full COA out of current earnings. Their 529s have tanked, much of their home equity has vanished, their investment portfolios (including retirement savings) have taken a beating, some of their jobs are insecure, and there's little confidence it will get better anytime soon. That $200K investment in an elite private school education may still look pretty attractive in principle, but a lot of people are going to find it difficult to scrape together the cash, especially with home equity loans and unsubsidized student/parent loans difficult to come by. So there's going to be an awful lot of bargain-hunting, and the flagship publics and second-tier privates offering generous merit aid are likely to be the prime beneficiaries. </p>
<p>Even at lower income levels, families are likely to be doing a lot of careful price differentiation between grant-only v. grant-loan-work/study aid packages. Bottom line, net COA---tuition + fees + room & board + books + personal expenses + travel, less grants & scholarships---is likely to be a much bigger driver of college selection decisions for all but those families earning over $250K/year.</p>
<p>I think many colleges are going to have to "discount" their tuitions even for those who can pay full freight according to the financial aid calculators. I believe they will do so in the form of merit awards even to those who would not ordinarily be eligible for one. Fewer schools will be need blind, and need award schools will be tighter about who is accepted. Just applying for fin aid is not going to be so much of an issue as what your need numbers are. Those who come up with a need of a few thousand dollars are going to look attractive over those needing close to full freight. </p>
<p>I agree that state universities are going to be very attractive options because of pricing and those schools that have not jacked up out of state rates that high will be sought more. </p>
<p>I don't think the very top schools will be affected. Folks still will cut off right arm and scrub floors with the other for kids to go to HPY. The less known private schools that charge top dollar are going to be the ones with problems, I think.</p>
<p>"we are talking about a relatively small percentage of students at most top 50 privates who are a) not on financial aid AND b) not truly wealthy." :Post from Erica, (I don't know how to quote here)</p>
<p>I have a daughter who is a senior at an ivy and we are not on financial aid and are not wealthy. We're hoping to send our high school daughter to a top private.</p>
<p>We seem to be above the financial aid level but are still very middle middle-class for Westchester county. I don't feel that we're in a "small percentage" -- many of our neighbors whose incomes I'm assuming are similar to ours (since our houses are similiar) are also sending their kids to top LACs.</p>
<p>It might be an advantage to students applying to elite schools who do not apply for financial aid even though most schools are need blind.</p>
<p>i understand that in aggregate there are significant numbers of people who consider themselves middle class paying sticker price at expensive privates. however, thats not really the issue, which is what percentage of an expensive private schools student body fits into this demographic. it cant be the 50% or so who receive need-based grants. and it cant be any of the truly wealthy, either. in other words, its a minority.</p>
<p>now, the decisions of some on aid will also be impacted. but honestly, sit down for a minute and figure out just how many upper middle class familys decisions would need to be altered for there to be any kind of significant shock at any solid university or lac. assume that the wealthy and truly middle class (those who can attend a private for less than state u) will not change their decisions. in this situation, i can see my lac handling a 50% drop in its upper middle class yield without any problems whatsoever. it would simply mean accepting a few hundred additional students every year, less if wealthy full pay applicants are targeted. but thats not the end of the world. it means a 34% acceptance rate instead of 29%. </p>
<p>and to think, it would stop the over-enrollment issue in the process.</p>
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<p>also keep in mind that top 50 privates are top 50 privates because they know how to raise money. re-targeting donors for for financial aid instead of new buildings or faculty hires could result in millions in additional funds to get that next tier of schools through the next couple years. its the tier after that, the one where schools are struggling to raise money, that might have some issues.</p>
<p>One thing to keep in mind is that traditionally, schools tend to be anti recessionary. People go to schools when jobs are at a premium to get more skills. The reverse is often true in truly boom times as you can make more money than if you stayed in school. As for the economy, it will likely bounce back (slowly) but they have learned from past mistakes, which is one reason you saw the relatively quick action. While it may not be efficient or what we like, the gove is committed to fixing things. So I think the ability to get student loans etc will come back relatively soon. Endowments and what they can do is another issue.</p>
<p>A particular group is particularly hit: those using their home equity to pay the full price at a private. Assume the combined income is $125,000 per year. Their lifestyle (mortgage, car leases, lessons for the kids, family trips, and of course income and property taxes) leave such a family with about $20,000 in discretionary income per year. Making too much for financial aid, but not <em>nearly</em> enough to pay the $50,000 bill. So they use the $20,000 for Private U, and borrow $30,000 against their HELOC (home equity line of credit) each year.</p>
<p>Perhaps I'm only describing California families here.. for Californians, the HELOC has been a very popular source of educational funds for at least 20 years due to the high and escalating home prices. I assume in other parts of the country this would be much less so.</p>
<p>However, at least for Californian home owners, the drop in home equity combined with the stock market correction could leave these families in a desparately tight pinch come August.</p>
<p>bclintonk ... I think you WAY exaggerate! 529's did NOT tank for those currently in college and only dropped a bit for the 09's and 10's. Unless the 529 investor listened to NO rational advice and over-road the typical age based conservation of principal, then well, maybe. But I do not think that was the majority of people with 529's which are needed soon.</p>
<p>Yeah, maybe the IRA's lost, but they are for RETIREMENT. Most people I know do NOT plan and NEVER DID plan to retire as soon as their kids got into college. So they have 5 years to recover and will likely be fine after those 5 year pass.</p>
<p>If you never lived through one of the recessions then maybe you can check some history and quell some of the fears you express.</p>
<p>cptofthehouse wrote this, and I agree with this for the 3rd and 4th tier schools (and some 2nd tiers as well):</p>
<p>
[quote]
I think many colleges are going to have to "discount" their tuitions even for those who can pay full freight according to the financial aid calculators. I believe they will do so in the form of merit awards even to those who would not ordinarily be eligible for one. Fewer schools will be need blind, and need award schools will be tighter about who is accepted. Just applying for fin aid is not going to be so much of an issue as what your need numbers are. Those who come up with a need of a few thousand dollars are going to look attractive over those needing close to full freight.
[/quote]
</p>
<p>I do no think this applies to top tier schools at all.</p>
<p>^ I've lived through plenty of recessions, believe me. I've never lived through a recession staring down a $50K/yr bill to send my kid to college. </p>
<p>As for retirement savings, look, all I'm saying is that this stuff is cumulative. My 529 for my D is down a little over 10%. That's one hit. Our home equity is down at least 30% (and note that if you're still paying on a mortgage, the percentage loss in home equity is higher than the percentage drop in market value of your property, because you take the full hit, the bank doesn't). That's a second hit. Our after-tax investments are down almost 25%; that's a third hit. Our retirement savings are down about 25%; that's a fourth hit. Add it all up and I'm---well, I won't say how much, but I've lost enough net worth to have paid full freight on several years at an elite private college. And yes, I know how the business cycle works. Eventually these things will come back. You're probably right that within five years my retirement savings will probably be back to the highs they reached earlier this year; but that's five years that will go into just making up lost ground, not additional savings that I was counting on. I'm not complaining. I've got a secure job and a good income; that puts me in a much better position than a lot of people. </p>
<p>I'm just saying there are a lot of people in the $100K to $250K income range who, with their net worth and liquid assets down substantially and loans hard to come by, will not find it easy to raise the cash to send their kids to elite private schools next fall, or probably the following year either. That means there will be a lot of bargain hunting. Most of those kids will be able to go to pretty good colleges. But it is going to shift both application rates and yield curves toward publics and away from those private schools that don't offer merit aid.</p>
<p>^ HYPSM and the "lesser Ivies" excepted, of coruse.</p>