<p>Re: <a href=“Escalating College Costs ... Any End in Sight? - #17 by Data10 - Parents Forum - College Confidential Forums”>Escalating College Costs ... Any End in Sight? - #17 by Data10 - Parents Forum - College Confidential Forums;
<p>Could the dip in 2009 average net cost at Stanford also have been affected by economic downturn, as families of all income levels became somewhat poorer or less wealthy?</p>
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The economic downturn was certainly a contribution. However, around the same time (likely in response to the downturn), Stanford changed their FA policy such that families with incomes of under $60k and typical assets have no parental contribution, and parents with incomes of under $100k and typical assets have a low enough parental contribution such that there is no tuition charge. This fits with the average cost being slower to recover than the economy.</p>
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I’m afraid this doesn’t make sense to me and leads to more questions. You analyzed the cost after considering scholarships? And used one of the most generous schools as your example? Why not just adjust costs for inflation? Why do other schools which don’t issue nearly the same amount for scholarships cost a similar amount?</p>
<p>Tuition keeps rising because it can. My D and I were at a large NYU gathering maybe 3 months ago…hundreds of kids and parents…as I looked through the room, the feeling of wealth was evident and I thought to myself, “if NYU completely did away with all financial aid tomorrow, they would still be able to fill their freshman class (overfill) with thousands of very very smart kids…and all paying full tuition.” The reality is that a lot of people have a lot of money (yes, they may be the 5%ers but 5% is a lot of people) and international families all want their kids to come here…and 5% of the <em>world’s</em> population is a very big number indeed. 
As far as comments like “I can’t see justifying $60,000 of tuition a year for yada yada”, trust me when i say that rich families everywhere are rejoicing with that statement. it gives their kid the edge.
(sorry but i’m full of cynicism/realism today) </p>
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If you search through my posts, you’ll see that if I do an analysis of a specific school, that school is almost always Stanford. Being a Stanford alumni, it’s one of the few schools for which I have enough interest to analyze in detail. The CDS groups scholarships and grants into the same category, making it difficult to separate grants from scholarships. Considering that Stanford does not offer merit scholarships, it’s a safe bet that the vast majority of non-loan/work FA is grants. If you only look at inflation adjusted sticker price without considering FA, you do not account for changes in actual cost for most students (the majority at Stanford receive FA) and are instead focusing on the minority that come from wealthy families with $200k+ incomes. For example, in recent years, Stanford implemented a policy such that there is zero parental cost for families earning the median household income/assets in the US. To maintain operational costs, they need to make up the for the reduced tuition & R&B income incurred with this generous FA somehow, which relates to why sticker price for wealthy (and international) families has increased at a faster rate than inflation in recent years.</p>
<p>At public universities, one reason tuition rose so fast is state budget cuts. Another reason is that kids today are used to personal bathrooms, have never shared a room, and expect college to be as comfortable as home, so that housing has radically changed at many colleges, especially on the lower-end where it’s a potent selling point to non-academically oriented kids (suite-style! apartment-style! singles for all! no communal bathroom!) This has caused debt ie., rising tuitions that can’t go down until the new halls are paid for.</p>
<p>Sally, don’t you think the $3,000 misc. for UW is rather high? St Olaf’s has theirs at $900. Maybe because there is so much more to spend money on in Madison? When I look at COA of colleges I disregard their travel/misc entirely. I look into matters like- for OOS, will student be forced to buy expensive health ins policy if parent’s doesn’t cover? Is there surcharge for credit hours beyond standard limit (UW/St. Olafs: yes/yes)? What sorts of extra course and program fees are hidden in registrar lists? Do kids go off campus after 1st year and will that raise or lower their costs? For long distance OOS, what are plane fares and how/for what price do kids get to airport? Like to figure a transportation budget myself. I think of UW as being a $20,000 school. Local for us, so no transportation or health ins. costs. If my kids want a lot of ‘misc.’ it’ll come out of their summer/winter break jobs, for sure. But still a lot of money, yeah.</p>
<p>The miscellaneous figures can be all over the map, and I don’t think there is a set protocol as to how the colleges are supposed to come up with those numbers. They are supposed to be averages, and so a school that has a lot of foreign students, students from some distance from the place, would have high air fare to average in there. If a large percent of the students go Greek, if they tend to eat out rather than in the dining halls, if health ins is required and included in that figure, if that is what the average book/supply charge is running, all of these costs might well be obtained by doing sample surveys of students and averaging, or a school might just go with a number that they just think is what the average student absolutely needs to have in terms of misc expenses. </p>
<p>I think $$1800-3000 is about right, so UW does seem high, on average for a state school, but I think that $900 is waaaay too low for St Olaf’s unless their average student lives so close by that it doesn’t cost much in gas to take and pick the kid up from school. Driving 3 hours to a popular state school in my area means a tank of gas each way for me, so that would be at least $100 for each round trip. Figure kids can carpool rides if it’s a school that many of them of them are attending in an area, but still that’s at least a few hundred a year, off the bat. School supplies, toiletries, sundries, entertainment, not to mention other things that come up, and if you take the transportation out, we are saying it’s about $20 week is all the kid needs? I don’t think so. Especially given what some of those laundry machines charge. For us, I would say St Olaf’s would cost us close to $3K a year for one of our kids to go there, unless there is some all inclusive policy the school has which covers just about everything. The average parent sending the kid off to college somewhere tends to want to drop off or pick up the kid from school, and/or visit, so there is usually a cost in there for that as well. </p>
<p>The misc costs for my kids, all of whom have gone away, far away, like more than 6 hours away to school have run close to the $3K mark, and my current college son’s cost are at about that level. He’s careful with his money, not extravgant at all, but isn’t frugal either in that he does not have to be. He pays most all of these miscellaneous costs himself out of campus job, summer work proceeds, and yes, $3K is about what it costs. </p>
<p>My one son who did go to a state school and went off campus after freshman year, lowered his living expenses in terms of room, anyways, drastically. But the COA for that school does not reflect the plentiful, very cheap housing available in that area as the misc figure goes UP for those who take that option. But then there also very nice apartments available off campus as well, and perhaps enough kids go there instead of into the student ghetto, bringing up the costs. I guess pointing out the not so great student digs out there as where a kids should live off campus would not sit well. Better to point to the new apartments and stick them in the COA. But the ranshankle houses and apts were filled with students who opted to go low cost. </p>
<p>I don’t know, celeste! I had never looked at the broken-down costs before. That’s REALLY high. My son’s LAC has a student activity fee of $300 a year and that’s it. UW also includes over $1000 for travel, which seems odd with so many kids coming from driving distances (of course, the OOS kids who fly in would likely have much higher costs than $1000). Maybe UW is trying to be more inclusive in the costs so people can plan more accurately? it is interesting.</p>
<p>I think it would cost close to that in misc costs for my student to go to UW. We visited last summer, and that is a school under consideration. Same with UMich. </p>
<p>I don’t object to the misc/travel numbers. Maybe schools use them in determining financial need and like to set them a bit high. I just discount that part of the cost for our family at UW is what I meant to say, and in general try to determine it on a case-by-case basis. When kids attend close to home can furnish dorms/apts partly from parent’s home warehouse surplus which helps. My D is across the country, so we had to spend $$ to set up dorm, and then there is airfare, sigh. I calculated we’d be using FF miles for that, but she likes to fly direct to a nearby city and that airline is not our FF airline, darn. Unanticipated cost. Can’t complain as she’s going to college on the cheap, but it is an example of ‘best laid plans.’</p>
<p>Crunched some numbers for UW from CDS and ed.gov Pell tables.
40% of UW undergrads qualify for some kind of aid, about half of those for Pell. That doesn’t mean their need is fully met, but that is where they are economically. Can’t see in-state/OOS breakdown on that though. At least 60% pay full price, be it in or out of state. Except 11.6% of the non-needy get merit scholarships avg. $3,000/yr, and 1.5% of undergrads get full athletic scholarships.</p>
<p>Actually, it’s a bit silly for me to be dithering about whether or not we’d pay that $4000. By the time S graduates in 1.5 yrs, the basic cost will have increased twice and we’ll be paying it no matter how we scrimp and save, sigh.</p>
<p>I think the idea of just stripping out the misc costs and adding in what pertains to your own situation will get you to a closer number. It 's of no use to you even if the college did a careful averaging job of all misc expenses and got a good sampling to come up with that number when your kid is not average in that group. If he’s just going cross town to live at the school, which a lot of kids I knew did in the Midwest city that had a major state university right there did, the travel costs in that case often just got folded into every day expenses,as family members went that way, worked that direction, rides were available, etc. </p>
<p>On the other hand, I live 7 hours away and hardly anyone we know goes there to college, so to send one of my kids there means airline tickets, significant travel costs. And we don’t scrimp to the bottom line as some might–my kid comes home holidays, we visit and stay the night or two, so, yes, that is a significant cost item that a kid living within an hour or so of that school would not have to pay. Also, if the kid needs something, instead of buying it, if a lot of friends and family are near by, it can be found in a household. Not the case, often for kids going to school some distance away. </p>
<p>My cousin’s son joined some music group, that requires infusion of funds, some kids take courses that require software or field trips that are additional in cost. Some kids are just more expensive than others. My dear friend’s daughters are very, very expensive young women. </p>
<p>I know what you mean about air fare. One year, I lost out on great deals on tickets I bought early and cheap. Son had to stay extra days due to some commitments and issues that arose. What I got back on those tickets didn’t even cover the costs to go to the airport to pick up the kid. I don’t buy much in advance anymore after that. They also can change plans and decide not to come home at all if some other opportunity arises. </p>
<p>Check the UW NPC and see if it differentiates for in and out of state and see what the averages will be in terms of aid. Many state schools try to at least cover full tuition and fees for all of their in state kids if there is need, but the sleep away costs can be on the family. For OOS, that may not even be in the picture, and the tuition has the OOS surcharge as well. A number of colleges use the increased tuition amounts for OOS as revenue, so they may not be so quick to give out institutional funds to those needy OOS kids. UMich meets full need (by PROFILE) for their instaters, including full COA which is room, board, average expenses, incl misc, but makes no such guarantee for the OOSers. They tend to throw merit awards to the cream of that crop to bring in some good numbers, but financial aid is a whole other story. No idea how that is distributed for OOSers. I knows some kids here who go to UMich and though the OOS cost is very high compared to other state schools, including most OOS unis, some of them got a $10K or so merit sweetner which brought the cost down to about $40K, still a nice deal considering private unis are running over $60K.</p>
<p>Another reason for the increase in selectivity at state flagship universities (other than the recent recession), is the significant increase in the number of qualified applicants. </p>
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<p><a href=“Fast Facts: Enrollment (98)”>Fast Facts: Enrollment (98);
<p>Increases in demand will lead to an increase in cost (and selectivity).</p>
<p>Now, college enrollment is falling, which is impacting for-profit and less selective schools…</p>
<p><a href=“College Enrollment Falls as Economy Recovers - The New York Times”>College Enrollment Falls as Economy Recovers - The New York Times;
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<p>I had looked at these trends years ago and had thought that some breaking point would come which has not. There is a slow erosion in the cost and fortunes of the pricier, less selective schools, but it’s not been a big slam dunk lowering in prices. The prices still keep rising and cost does not necessarily mean you are buying ratings, rank or reputation either. </p>
<p>My opinion is that the loans available out there, particularly the cosigned loans are what have kept these costs artificially high. If families did not have access to those loans, had to borrow as one would for any other non secured loan, this would have broken a while back.</p>
<p>But even with the lowering of average costs at a lot of the expensive privates, the line is longer than ever for the most selective schools with parents begging for the privilege to pay in the quarter million dollar range for their kids to go to such schools.</p>
<p>Agree with capofthehouse entirely. I have observed and been amazed that we haven’t seen fall-off yet. Also agree that the loans are what is keeping pricing artificially high and fear the bursting of that bubble.</p>
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<p>This is one reason - much like how easy mortgages inflated housing prices, creating a bubble. There was talk a year or two ago about the education bubble and that it would burst once people start defaulting on their loans. But the people defaulting on their loans are out of college, so their defaults don’t directly impact on enrolllment. The mortgage foreclosures forced more housing stock onto the market, driving down home prices. </p>
<p>Keep an eye on the number of colleges still seeking students in June for an indicator of demand. Last June, close to 300 colleges and universities did not meet their enrollment targets for 2013-2014 and were still accepting students. Many were small LACs but large state universities were also on the list, including: Drexel, Beloit, Arizona State, Pace, UNC-Wilmington, Embry-Riddle Aeronautical, Fairleigh Dickinson, Knox College, SUNY Oswego. </p>
<p>All that said, 300 is only 1/10 the number of universities and colleges in the US. </p>
<p>our kids went to state school. turned down the elite cause of the high tuition. they are working, unlike some of the kids we know that went to ivy schools. Also i know several adults that went to the ivy schools and have meaningless jobs that dont require a degree. Now my kids have money to go to grad school, if desired. things to keep in mind *an elite school may open some doors but it does not mean you will get in * if you work hard at the state school, get involved, have internships then this will open doors * I read your sat score, while helps you get into certain schools, is also a good indication of how successful you are --even a good indiction of what your score on the test to get into law school, refers you back to the sat test * in most cases, pay for the same job in the same company is equal. IT does not matter what school you attended * school and gpa do not matter after a few yrs. it is your work expreeince, dirve and ambition. * i read students from non-elite schools end up making more money in the long run than many from MIT cause the MIT students will stay with one company for a long time whereas the other student will move around more and therefore move up the ladder faster </p>
<p>ok these are mostly things i read on CC or articles. There are areas where an ivy is desirable (law, investment banking). bottom line, is that if the kid has the smarts, drive/ambition then they will be a success</p>
<p>The big ticket loans tend to be those that parents co-signed with their kids or the PLUS Direct Loans that parents alone signed. Undergraduates, for the most part cannot get more that the Student Direct loans with the $5500/6500/7500 limits, other than the Perkins. Which at the maximums, especially if parents are denied PLUS can hit well into the $70K range with accrued interest for some students, is no small potatoes. But where it may put a squeeze on current students is that most students are not only children, and those parents who start getting hit with payments of the loans they took out for their older kids, cannot or will not take out more loans for their younger ones. If PLUS and these loans insisted on repayment to begin immediately after funds are disbursed, it would cut down the number of subsequent loans as the pain in paying back those loans can be felt.</p>
<p>I’m one who fits into that category. Anything for our first darling, and we did borrow PLUS for him. But we started the repayment process (Thank Goodness) immediately, which made it painfully obvious that we could not go that way with our other kids. But at least these loans are now paid off, which they would not be, had we begun payment 6 months after he finished school. As it was, it took us 15 years to pay for his education, including those 4 years he was in college. So when the second one entered college, the very idea of adding a loan payment for his college was just not financially feasible. We could see it very clearly. Fortunately, he went in-state public which gave us a breather. But we were foolish enough that we had to feel the pain to understand it.</p>
<p>" The mortgage foreclosures forced more housing stock onto the market, driving down home prices."</p>
<p>Very true, but when college grads default on their student loans, B.A. & B.S. degrees don’t flood the market, so they don’t drive down the market.</p>