<p>I started this college application and funding process in 2008 and I am now going through it for the last time with my youngest. I thought at some point the cost of attending college would begin to moderate. I had read that the largest amount of kids attending college would reach a peak in 2010 and then, presumably based on birth rates and other data begin to dwindle. In your basic supply and demand scenario fewer applicants should have meant the leveling off of, or perhaps a reduction in the COA at many colleges and universities. Not happening. Some believe, not unlike the stock market, Govt. intervention (via increased Stafford and Parent Plus Loans amounts) have forestalled what should have been inevitable. I like the fact that the Govt. makes college a possibility for many, if not most of young students, but what is the end game here? I work with kids who earn 35K have 100K in loans…. Tough to start a family with that kind of debt. My perception is that leveraging merit age packages over the past six years has gotten more, not less difficult. Grants seemed to have dwindled as well in favor of loans. I have a friend who grew so upset with a financial aid officer at a northeastern school she began screaming at him owed to his continued assertion that the COA at his particular school was affordable for her and her husband. His scenario had the couple working into their mid-seventies. Obviously there are still inexpensive alternatives which I suppose more and more people will flock to, community college, in-state schools, and commuting. With salaries stagnant and home equity seeing only modest year to year increases I think the college experience many folks have had, namely living on campus at a private institution, will eventually not be a viable option for many, many, students. Maybe it is time for the Govt. to step away and let market forces take hold…. Just a thought. </p>
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<p>The college experience for most students, historically and currently, is that of attending a public school, often as a commuter.</p>
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<p>If the government steps away and eliminates all of the low cost (to the student) state universities and community colleges, would college be affordable to any but those from the wealthiest families?</p>
<p>Government has stepped away. States have drastically reduced their contributions to state universities. Thus tuition rises.</p>
<p>The vast majority of states have slashed funding of public universities. One of the easiest way to make up for the lost funding is increasing tuition. That’s the way the market works.
Here’s a report on the decrease of state funding: <a href=“http://www.cbpp.org/cms/?fa=view&id=3927”>http://www.cbpp.org/cms/?fa=view&id=3927</a></p>
<p>^^^Privates have also been increasing tuition, not only Publics. And tuition had been increasing at a fairly high rate for decades, not just the last 9 or 10 years.</p>
<p>The increase in loans, grants and FA does impact the rate of tuition increase. However, even without these things, tuition/cost would still increase. As long as folks perceive that the cost of college is worth the debt/expense, it will increase. </p>
<p>The impact of changing demographics (and a flat economy) are being felt by non-selective schools (and, for example, second and third tier law schools). The perceived value at selective schools will allow them to continue to raise cost. FA reform may help reduce the rate of increase, but it wouldn’t stop it.</p>
<p>The only force (I can think of) that can reduce tuition cost, is competition (or a prolong recession). The wave of online courses (MOOC’s) could force many schools to reduce tuition/cost.</p>
<p>Direct loans have a pretty low limit (aggregate 31K for a bachelor’s for a dependent student). If you know people with just a bachelor’s who have 100K in debt, don’t blame the government’s loan programs. Those people did that to themselves with private loans. </p>
<p>There is nothing wrong with the lower cost options of in-state publics, community colleges, and schools a student can commute to. I ask in all honesty why anyone gets his knickers in a twist over the price of private schools. There are many good reasons to chose private schools, but why would should they be low cost? They are “private” businesses, and so far the market will bear what they are charging. </p>
<p>Now, does that make me happy? No, as there were plenty of schools my youngest just counldn’t apply to as I couldn’t cover the costs, even with full aid. But I’m not sure I think the system is flawed because of it. </p>
<p>Not disputing the private college tuition increases but the tuition at public institutions probably have a greater impact. There are over 15 million students attending either two year community colleges or four year public institutions (<a href=“Fast Facts: Back-to-school statistics (372)”>Fast Facts: Back-to-school statistics (372)) compared to 5.6 million students attending private colleges/universities.</p>
<p>There are already cases of private colleges rethinking their tuition model (high tuition/high aid) to something simpler (lower tuition). As for the elite private colleges (the usual suspects), they are already allowing the market dictate the tuition. They keep on raising tuition and their application numbers keep rising. As long as these schools have an acceptance rate of less than 30% (many are now in the teens and single digits!) with yields reaching 80% (40% is a decent yield. All Ivies except Dartmouth had yields above 50% in 2013), they have no incentive to lower tuition.</p>
<p>I have a 10 year old son. I am dreading to see how much college tuition will be in 7-8 years. </p>
<p>I had thought that there this would not have gone this far. That was back 15-20 years ago, and clearly I was wrong. However, I am also seeing a “discounting” of costs by merit awards and fin aid at a lot of the colleges that are not so selective, especially in those schools that are having trouble filling their classes. If you look at the common data sets of any number of pricey private colleges that are more regional, not well known, not high on the ratings, recognition and reputation scale, the % of kids on merit awards and fin aid can be way up there. The average cost to student is far lower than what the sticker prices are. </p>
<p>However, the most selective schools, the ones that get so many more apps than seats, are getting more apps than ever and becoming more selective than ever despite their increases in prices. For those who do not qualify for financial aid or do not get merit money at those schools (and many give little or no merit awards) not only is it getting more expensive to attend these school, it’s becoming more difficult to get accepted. The increase in price is not cutting down the demand at all. With the old supply and demand model, one can see that certain schools are becoming even more prized. </p>
<p>I think, however, it’s not the case with the vast majority of schools, where families might be rethinking paying full sticker price even if they are deemed able to do so. They might pay the $60K+ for Harvard other ivies and other “name” schools, but danged if they will pay that for some other college that does not have the luster. And such schools are having to discount to get that calibre student in their ranks. State schools are beginning to look awfully good even to families who can afford the privates if they are considered similar in prestige. That is making a lot of the flagship state schools more selective too. </p>
<p>Sometime around 2008 I stumbled onto CC when googling something like “Is the high price iof private colleges worth it?” when my oldest was looking at colleges. </p>
<p>The resounding answer on CC at that time was “Yes.” It wasn’t something I spent much time thinking about because he decided that the small LAC he had been considering was too small for his tastes. </p>
<p>A couple of years later my second was much more seriously considering a $60,000 tuition at a “top tier” private university, and again I found myself googling the same sort of question. I spent more time on CC that time around, because he was more serious about it. The talk here was then slightly more nuanced. People were starting to question the prices of less known LACs, but still, the overall sense I got was that it was most certainly worth it, for that particular major at that particular university. </p>
<p>I was not yet a CC member, just a lurker, just doing a lot of reading.</p>
<p>Now, three years later, with my third child looking at colleges, there are more parents on CC who are questioning the value of a $60,000 university bill.</p>
<p>It gives me hope that a sea-change in attitude is occuring, but I sincerely doubt this bubble is going to burst before my youngest graduates from college in five and a half years. There are just too many people still able to pay full tuition and/or willing to mortgage their futures for a slot at a not-quite-HYPS-level school.</p>
<p>I underwent the same transition. My oldest has been out of college now for nearly 14 years. When he was lookig, price was no object. Wanted just the fit to be as perfect as possible. Now, I wonder if any fit is so perfect and how much luck plays a role in that and whether a $200K+ cost is worth pandering to the whims of an 18 year old. I say it that way, because, yes, there are times when the reasons are strong enough to make choice of school a heavy consideration, but is a "feel’, the luster, the name brand really worth that much? </p>
<p>I spent one day last weekend at a college in upstate New York. This particular private school offered an additional 3K per year to visit prior to the end of Jan. This school had already offered a 19K per year merit award. At the end of the visit the fin-aid person told us that if we had a better offer from another school his school would match it. There was nothing nuanced about what was said. I sort of felt like I was buying a TV at a big box store. Although I appreciated the fin-aid person’s candor it did smack of desperation. Our tour guide had told us that only two students on this 1200 person campus were “full pays”. My kid is not a NMS or URM and his real interest was in a nearby school … but this school was close and we did apply, so we dropped in. So yes, it does seem that lesser known colleges with limited endowments may have already begun to struggle. Obviously the Ivies and Baby Ivies will continue to thrive, but if you’re a little known LAC in a snowy climate, this may be the beginning of the end.</p>
<p>“There are many good reasons to chose private schools, but why would should they be low cost? They are “private” businesses, and so far the market will bear what they are charging.”</p>
<p>I would argue if the Govt. is making money as easily available as a PLUS LOAN … a loan you can get far more easily than you can get from a bank (or any other conventional institution) then market forces are not totally in play. Frankly you need better credit to buy 25K Toyota then you need to borrow 100K to educate your child. Also many private businesses cannot declare themselves “non-profits” and reap the benifits that brings.</p>
<p>“If you know people with just a bachelor are who have 100K in debt, don’t blame the government’s loan programs. Those people did that to themselves with private loans.”</p>
<p>“Those people” that “did that to themselves” are often desperate kids whose parents were denied credit. They are often steered, by proxy of the school they are attending, toward some credit agency who is willing to loan them 75K despite a lack of collateral and a job as an intramural soccer referee. In other words they are exploited because this society links success so directly to education and by a school who does not want to lose a student and by a loan agency that knows the loan given, however usury, cannot be discharged in bankruptcy. I know… I know, “Let the buyer beware" Well we saw that with mortgages in 2008 and we are all still paying for it.</p>
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<p>I’m not so sure. More and more little-known LACs are on the radar of kids who also have other, more predictable choices. ALL colleges that I know of set their tuition within a certain range. Even if they don’t need to charge $50K a year, if they start with a low price they will be subject to the same criticism you are using above–that they are somehow less valuable or more of a commodity because they are “cheaper.” So they set the price high and discount from there. </p>
<p>State flagships are becoming more competitive as more families reject the $50K-$60K private model and look for more affordable options. So it’s not a sure bet anymore that a good, “normal-smart” student can get into the local state U. That means a lot of the small colleges are getting more qualified applicants than they did before, and many are becoming harder to get into. So a kid who might have had Bucknell or Skidmore as a safety 10 years ago may now be looking at Muhlenberg or Wheaton, which are perhaps not as well known. But so what? Those of us who look at the facts (and visit this site a lot) know they will likely get a comparable education at any of these schools. </p>
<p>I have a hard time justifying $60k fullpay per year for an undergrad education, when child is likely to continue on to a graduate/professional school.</p>
<p>What I have observed is, w the exception of a few fields, if u have a graduate degree, no employer cares about your undergrad degree.</p>
<p>10 years into the work force, no one cares about what graduate school u went to. </p>
<p>20 years into the workforce, your education will be on page 4 of your CV. I notice on LinkedIn that your education is also displayed way, way on the bottom.</p>
<p>One cost we hadn’t thought as much about as we probably ought to have was that if you let older kid go to expensive private U with generous merit, will you be willing to deny younger kid the opportunity to apply and attend, even if younger kid gets NO merit? </p>
<p>I know another family who also faced this same dilemma, tho neither of us planned it when we were pleased to support older child’s college choice. </p>
<p>I know some families tell each child that there is only $xxxxxx per kid and that is it, but each family handles things differently. Also, sometimes a child attends a U for longer than predicted, which adds to the cost as well. Some families also make explicit agreements as to how many terms will be paid for, and what minimum GPA etc. there are a lot of unknowns. </p>
<p>The prices are extremely high and are already affecting a lot of people–students, grads, employers, parents, families. </p>
<p>Two 40+ young adults I know are STILL repaying ed loans, while living in a dive and working crazy hours at their jobs. Even President Obama was repaying his loans until recently! Crushing debt is really a tough way to begin adulthood. </p>
<p>At many colleges, the sticker price increase is primarily driven by improved financial aid and inflation, resulting in the average cost in inflation adjusted dollars being essentially unchanged. For example, the average cost in 2013 dollars at Stanford for the years 1999-2000 to 2013-2014 is below. I am defining average cost as tuition + room & board - grants/scholarships (not including loans or student work aid) for undergrads. All calculations are based on numbers from the CDS, which relates to why I only go back to 1999. Note that in the 14 years between 1999-2000 and 2013-2014, average cost changed by under $100.</p>
<p>1999 – $31,700
2000 – $30,400
2001 – $32,800
2002 – $33,100
2003 – $30,600
2004 – $31,400
2005 – $32,700
2006 – $32,600
2007 – $33,100
2008 – $31,900
2009 – $29,300 (large increase in financial aid this year, likely due to new policy)
2010 – $29,200 (still abnormally low average cost)
2011 – $29,700 (still abnormally low average cost)
2012 – $30,400
2013 – $31,700 (finally recovering from 2009 FA increase and returning to normal level) </p>
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Crushing debt is a blindingly stupid way to begin adulthood. Indeed, any significant debt (other than, say, a manageable mortgage) is a stupid way to begin adulthood. And it’s bad for the economy, as it diverts money that would otherwise be spent on other goods & services. The financial sector already accounts for too high a percentage of the country’s economy.</p>
<p>That said, let’s not forget that there are two separate issues. I don’t see how one could argue that a private college education should be affordable, and I think that the U.S. government should get out of subsidizing that business (and it is a business). But to keep America internationally competitive, I’d suggest it’s critical that a public college education be both world-class and affordable.</p>
<p>I agree, expat. Private colleges should be allowed to do whatever they want if they are not being subsidized by the government. Fortunately, most of them do not want a monolithic class of rich kids with similar backgrounds, so hopefully they have an incentive to diversify their student bodies anyway. It’s the publics that I am worried about now. Our state flagship is over $24K a year now. I think that’s crazy for the average person (including me). </p>
<p>As usual, I agree with Sally. Compound the rising costs with the fact that families are sending B- and C high school students to college, something that was much less prevalent in decades past so yes, while the volume of college age kids is lower statistically there are still an awful lot of kids going to colleges that would probably not have decades ago. Many colleges have invested heavily in infrastructure, to keep up with the other colleges, so are more heavily debt loaded than they were decades ago. And finally people are reluctant to pay more in state taxes to subsidize the publics. Many of the factors are consumer driven - not all - but many. On the flip side, profs are working less hours requiring more staff, admissions offices have swelled with employees because kids apply to too many colleges and administration has increased to deal with regulations and things that never dealt with decades ago. It’s the perfect storm. </p>