<p>*The question is: Why do those who can afford to pay $250,000 for an undergraduate education do so? *</p>
<p>My question would be, are the elite schools (Harvard excepted) fully dependent upon find families willing to pay the $250K, or would their financial model collapse if “zero need” families did not beg, borrow or steal to come up with it?</p>
<p>Good question dumbparent! </p>
<p>By the way, how was the road trip last weekend? Have you and your child found a winner yet?</p>
<p>Happymom,</p>
<p>W&M was very impressive. Beautiful, compact campus, steeped in amazing history and tradition; quiet and contemplative surroundings (a son could read that as: boring town); sense of cooperation and teamwork among students, not competition. Incredible stats on faculty/student ratio and class sizes. </p>
<p>UVA was much more “the big state school” but also impressive. Climate seemed more intense and competitive. Both schools, obviously, have a mostly in-state population, so we Midwesterners felt a bit out of place. </p>
<p>GW was the surprise. I was expecting a brusque urban tone and faculty detachment from students. The “accepted student” day was extremely well organized and student participation was great, with all the spirited interaction one could ask for. Mt. Vernon campus (called that for reasons having nothing to do with the real Mt. Vernon) across the Potomoc is lovely and provides some respite from the noisy/busy city campus. GW seems to compromise (somewhat) highest-level academic rigor for an intense focus of Washington-based internships and job placement. Opportunity is the word most frequently used to describe the GW “difference.”</p>
<p>Still collecting and processing information. Thanks for asking!</p>
<p>Happymom,</p>
<p>W&M was very impressive. Beautiful campus, steeped in amazing history and tradition; quiet and contemplative surroundings (a son could read that as: boring town); sense of cooperation and teamwork among students, not competition. Incredible stats on faculty/student ratio and class sizes. </p>
<p>UVA was much more “the big state school” but also impressive. Climate seemed more intense and competitive. </p>
<p>GW was the surprise. I was expecting a brusque urban tone and faculty detachment from students. The “accepted student” day was extremely well organize and student participation was great, with all the interaction one could ask for. Mt. Vernon campus (called that for reasons having nothing to do with the real Mt. Vernon) across the Potomoc is lovely and provides some respite from the noisy/busy city campus. GW seems to compromise highest-level academic rigor for an intense program of Washington-based internships and job placement. </p>
<p>Still collecting and processing information. It’s a bit too much for Son No. 1 right now, who shows symptoms of Goldilocks syndrome. That’s okay for the moment. Thanks for asking!</p>
<p>“My question would be, are the elite schools (Harvard excepted) fully dependent upon find families willing to pay the $250K, or would their financial model collapse if “zero need” families did not beg, borrow or steal to come up with it?”</p>
<p>Yes, most selective schools are dependent on many (half of them?) students’ paying full list price. Is Harvard actually excepted? How long would their endowment last if all attended for free?</p>
<p>
But it’s not just a matter of choices. Some are quoted $75k for that car, others $15k. I would imagine that $75k becomes a trivial matter at some point, but it’s well beyond the full-pay line. Personally, I can’t imagine wasting money in that fashion.</p>
<p>I like cptofthehouse’s definition of middle class as those who feel pain with respect to college costs.</p>
<p>By “push back” do you mean fewer applications to such schools?</p>
<p>By pushback I mean smart consumerism - not being willing to overpay. With the economic situation, we’re seeing a lot of pushback in the past few years. We need more of that.</p>
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<p>That’s another way of choosing how to calculate the “intrinsic value” of a college education at a specific school. Set the intrinsic value to the COA 40 years ago, adjust for inflation, and see if the current price exceeds the 40 years ago price. I don’t think that many four-year colleges in the US could meet that standard. Certainly the California university system fails that test. </p>
<p>dumbparent, it sounds like things are looking on the up-and-up. Very glad to hear that you and the kid are finding things to love about the schools under consideration.</p>
<p>“By pushback I mean smart consumerism - not being willing to overpay.”</p>
<p>I wonder how this applies to colleges. I think it means not being willing to apply to such expensive schools, or turning down FA offers that don’t make it easy to attend.</p>
<p>“I happen to believe that the difference cannot be explained as added value.”</p>
<p>Right, it’s not all added value. Much is due to college costs not benefitting from cheap overseas labor which have kept the U.S. average inflation rates lower than if manufacturing had remained here. College costs are affected by health care and construction costs which have higher than average inflation rates.</p>
<p>
It would cost Harvard about 1-1.5 percent of their endowment per year to let everyone go for free.</p>
<p>So for Harvard, the answer is “forever”.</p>
<p>For Yale, Princeton, and Stanford, 2-3% yer year. Also probably sustainable forever if they chose.</p>
<p>For every other school, you are looking at 5%+, and the percentage rises pretty quickly. There are surprisingly few schools with billion-dollar+ endowments.</p>
<p>[List</a> of colleges and universities in the United States by endowment - Wikipedia, the free encyclopedia](<a href=“http://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_the_United_States_by_endowment]List”>List of colleges and universities in the United States by endowment - Wikipedia)</p>
<p>
Many schools have shifted substantial portions of the teaching load to non-tenured adjuncts who barely make minimum wage.</p>
<p>And I’m sure their new buildings are using cheap imported steel, sheetrock from China, etc.</p>
<p>The answer is more likely that schools have had zero incentive to keep costs down, because gov’t-provided or gov’t-promoted means of paying for school have risen right along with college costs. In fact you can make a case that easy access to money is what has driven the excessive increases in cost.</p>
<p>At some price, though, we reach a tipping point (which will be different for every family). It seems more and more families are reaching it now, IMO. Another 5 years of 5% increases is going to leave a lot of schools in deep trouble. It won’t be the top 50, but if you are a middle-of-the-pack LAC charging $50K, you better be worried.</p>
<p>That’s what I’ve been saying, notrichenough. It was nothing 5 years ago for these ‘middle-of-the-pack’ LAC’s to keep ramping up tuition in lockstep with the HYPS’s of the world. Suddenly, tuition’s $40K & it’s $52K out the door. HYPS will do fine because of the demand, but soon enough–probably within 5 years–even if tuition does plateau out, those other LAC’s might not be filling their freshman classes. Heaven forbid they should lower their tuition. My guess is that those schools will increase their merit aid, even to the upper middle class, to draw more students in.</p>
<p>“Many schools have shifted substantial portions of the teaching load to non-tenured adjuncts who barely make minimum wage.”</p>
<p>Can we get the list of schools doing this? Some will want to weigh this cost/benefit issue. Our school (no merit aid) says it has to pay more in salaries/benefits in order to compete in quality. Some smart consumers may prefer the faculty cost-cutters.</p>
<p>Although these schools claim to be “need blind,” someone posted last year (hmom5, I think) that these schools tend to have the same number of full payers every year…so it does suggest that there is something going on that ensures that outcome…maybe it’s because certain Ivy feeder schools are known to provide “full payers” or because certain zip codes/prep schools/top publics are known to provide more “full payers” or “few full-need students.”</p>
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<p>Hmmm, there might be something to this. In Canada, the “International” cost of tuition is dramatically lower than most Out of State tuition fees at top publics. However, there’s not as much gleaming infrastructure; large lectures aren’t considered a sin (though wages are pretty solid for staff) etc. At the same time, it’s actually the government lending the money for fin aid (not the institution) and I will note, the interest charged is 3% (less than HALF what’s charged in the U.S.).</p>
<p>So at first blush, it might seem that in a market where there’s no free-market-school-lending-advantage or edifice complex it is entirely possible to control tuition cost.</p>
<p>Eg. my “specialized honors” tuition in a BFA (course overload, eg. 20 credits) cost me $1200 in 1984 at a Canadian university…and today tuition for a Canadian resident is about $6,000 at that school. International rate is approx $16k. </p>
<p>Many of my profs back then hailed from prestigious grad programs at top ranked US schools – and as I recall their salaries (unionized) were very competitive to what I know UMich presently pays its staff. SO I don’t think one can make the argument that staff is paid less – but I could be wrong.</p>
<p>Interesting, at any rate (if not unbearably sad: I mean, why do we have to “make money” with usury interest rates off of student loans. It’s just so contrary to the concept of investing in our future capability as a country…)</p>
<p>“these schools tend to have the same number of full payers every year…so it does suggest that there is something going on that ensures that outcome”</p>
<p>Maybe the correlation of SAT/GPA to family income?</p>
<p>Vossron, I doubt they need to go that far. They need only look at their own history will full payers, over the past 10-20 years, to determine where the richest veins are.</p>
<p>As Mom2 said, certainly certain Ivy feeder schools are known to provide “full payers” or because certain zip codes/prep schools/top publics are known to provide more “full payers” or “few full-need students.” </p>
<p>I highly suspect I live in and adjacent to such zip codes. Of course, regardless of location, we all receive a blinding amount of admissions direct mail…(and some related to quality of test scores)…but we certainly got our fair share, if not more, from Northwestern!</p>
<p>“Vossron, I doubt they need to go that far.”</p>
<p>Whoops, I was totally misunderstood, too terse. 
The schools don’t need to do anything. The reason these schools tend to have the same number of full payers every year is that there is a correlation of SAT/GPA to family income. If SAT/GPA are significant contributors to admission decisions, they simply will pick up a lot of money, even if they are need blind.</p>
<p>Ah, now I see your point. I would suggest we may both be right. The expensive top-tier schools benefit from such a correlation, and the more strategic among the “admissions marketing teams” actively exploit it–perhaps not only in the tone and appearance of marketing materials, but also in the demographics of distribution.</p>
<p>"Family Income Net Price–Northwestern
$0 – $30,000 $12,783
$30,001 – $48,000 $16,065
$48,001 – $75,000 $21,062
$75,001 – $110,000 $27,191
$110,001 and more $40,197 </p>
<p>So, if you are a family earning 30K or less, the net price for Northwestern is around 13K, around 45% of income. </p>
<p>Compare the data to Harvard:</p>
<p>Family Income Net Price
$0 – $30,000 $2,170
$30,001 – $48,000 $1,413
$48,001 – $75,000 $4,570
$75,001 – $110,000 $10,141
$110,001 and more $32,145"</p>
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<p>Dunno, I’m still having trouble accepting skrlvr’s posted figures. Can that be right? This is the first time I’ve actually seen the breakdown. Incredible.</p>
<p>So now I see how a couple of smart/brilliant kids from D’s HS with low income families are affording Northwestern. Sure, they’re taking loans, but at $12-$16K a year, which is nothing. Either NU or the US Dep’t of Ed would give that amount of money to a student or parent as long as they have a pulse. Neither of my two D’s applied, my guess is that it would’ve been about a 50/50 chance for acceptance for either one. Good move on my part to steer clear.</p>
<p>Sorry to be a little bitter, but wife & I have worked our tails off for 30 years, saved the best we can, and our reward for that sacrifice would have been to pay two to three times more out of pocket than some of the others. And it galls me when one of those moms asked me, ‘why didn’t your D apply to Northwestern?’ Argh! I guess there are things better left unsaid…:)</p>