<p>This may be of interest:</p>
<p>[Center</a> on Education and the Workforce -](<a href=“http://cew.georgetown.edu/whatsitworth/]Center”>What’s It Worth?: The Economic Value of College Majors - CEW Georgetown)
</p>
<p>I know exactly what I would do if I were put in charge of financial aid for college for this country. I would begin by pulling the funds from the private schools. Big savings right there. Let them make up the amounts needed. I would want every area to have a local state school so that all kids can get a local college degree for no cost. I would also heavily subsidize the state flagships working towards the goal where they are the best schools in the state and the country. I like Virginia, California, New York, and Michigan’s models and what I would want is a composite of those state systems. For those kids who have the abilities, talents and/or attributes that a top school wants, aid/ grants would be available for them to go to “sleep away” schools.</p>
<p>This way college would be available for nearly everyone. Private schools will be forced to price their services so that they truly have to give a price and service to attract students. HOPE in Georgia and other such programs have really kept the talent in-state and at state schools. By revamping the programs so that the publics are truly the best option, more talented kids would want to go to such schools. </p>
<p>It would be recommended that a certain % of spots should be reserved for OOS kids that could augment the student pool and those kids would be eligible to come to the schools with the same deal as those in state. That would provide competition among the states/schools to keep a sharp image and offer the best programs to keep their top kids. Perhaps state monies could be used for scholarships for that purpose. </p>
<p>It’s ridiculous that we are funding Harvard with PELL money. All we are dong with such funds is letting the schools use that as their base to build up their tuition costs.</p>
<p>Good points. I also think the real key is for eveyone to realize that FA is not a program about helping the poor or near poor. What it really does is give money to middle and upper middle class students which in turn allows the schools to keep raising tuitition above the inflation rate. In many ways it’s similar to the truth about AA which is always presented as way to help poor URM but in reality almost exclusively helps middle and upper middle class students rather than anyone underprivileged.</p>
<p>@SAY: As I’ve read over this thread, I am starting to agree with some of your points (especially the one stating that college education is overpriced.) However, I do have some qualms about some of your statements. </p>
<p>I DO think that FAFSA should be determined based on income. Just because someone has a lower-paying job does NOT mean that the job is easier. My dad works full-time, and additionally spends all of his nights and Saturdays doing work (so he spends about 80 hours a week on work), yet only earns $40,000 a year.</p>
<p>He CANNOT afford to help me pay for college. He cannot even afford to provide ANYTHING for me, not even housing, since our house was foreclosed in December. I, at 18-years-old, am paying entirely on my own for rent, food, healthcare, everything. Thus, I am paying entirely on my own for college. Without some of the aid I got from FAFSA last year, it would have been impossible for me to attend school. And I honestly think I deserve to go to college; if 2.0 students are able to skate by because they have parents who can afford to pay for them, I don’t think it’s fair that I, a 3.9 student, have to leave because of my dad’s financial status. That’s just how the economy is right now, and I think it’s ridiculous that college is becoming about money rather than education.</p>
<p>I am taking matters into my own hands. I dropped out of my university, American University, because I realized that it was out of my price range, so now I am trying to go to my local state school. I am also working full-time this summer, and, if need be, will delay my schooling a year to work full-time throughout the year. I am really dedicated to my schooling and I am willing to work for my education; I’m not going to depend on government handouts to attend school.</p>
<p>The part of your statement that I have problems with is this: you’re saying that, while I shouldn’t get money from the government, someone wealthier than me should. Based on my experience, the children of wealthy families work a lot less harder than I do; I met plenty of kids at AU who drank and partied all day and all night because their parents were paying for everything, so they didn’t have to worry about working and they didn’t care about their grades because their livelihoods weren’t riding on a good GPA. While I studied diligently and worked 20 hours a week, they got plastered and went to parties every night. I really don’t see why those kids should get aid while I, a hard-working student, get nothing. So I may agree with the point that we shouldn’t expect aid, but I vehemently disagree with your point that wealthier people deserve aid more than less wealthy individuals.</p>
<p>Also, I got around $5k in grants and $12k in loans from the government, and that’s with an EFC of $0. I paid $10,000 out-of-pocket, of my own money, that I got from my mom’s life insurance and from constantly working since I was 14-years-old (although most of the latter money was spent providing for myself throughout high school.) I have no idea where you came up with the $70k-$90k figures that you cited at the beginning of this thread. I would consider myself as having received $5k in aid (since I’ll pay the loans back in a couple of years), with a $0 EFC. If I only get $5k with a $0 EFC, how the heck does someone go about getting $90k?</p>
<p>Note: Sorry if you’ve addressed some of this before. I kind of skipped from page 6 to page 26 since I don’t have time to read everything.</p>
<p>Kayley, I agree fully that federal financial aid should NOT be given to anyone but those who are the neediest financially. The line should be drawn where the budget allows it to be drawn and those under it should get it. However, there are state programs like Georgia’s HOPE and Florida’s Bright Futures that are not based on financial numbers because the purpose is to keep the most talented students in state. I don’t see a problem with that. The programs have worked. UGA, UF, FSU have benefited greatly from such programs. A number of state schools offer all kinds of financial incentives to attract out of state talent as well, as in state kids, and in my opinion, such programs help out these schools. </p>
<p>As for your personal situation, I don’t think you went to a private boarding school for K-12, or even just for high school. Why not? I already know the answer to this question. Really, the same thought process should go towards college. Why the heck should the federal government or any public funds be going towards paying for you or anyone’s sleep away college experience? If American wants you badly enough, and your family wants you to go to American badly enough, you pay for it yourself. I have absolutely no sympathy in this area in terms of government aid.</p>
<p>But I do believe that colleges like American are able to inflate their tuition cost to what has become an absurd level even for families who are in the lower echelons of the Obama wealthy so that they cannot send their children to these schools without seriously compromising their life styles that are commensurate to sending their kids to these colleges. And a lot of them are not doing so at full cost these days. The last 4 years I have seen more families in this category, simply refuse to pay the full sticker price for private colleges unless they were ivy or at the level where they felt it was “worth it”. And that level is shrinking. Their kids are still applying to these schools but when the final decision is made and it’s Holy Cross at $60K vs Fordham at $40K, they are picking Fordham, and many are going for Binghamton Honors at the $20K mark. Enough of this happening will affect colleges. I’ve felt this was coming for a while, but is is coming at a pace a lot slower than I expected primarily because of the huge expectation so many of us have that we have to send our kids to sleep away school and name schools. </p>
<p>Harvard is well aware of this happening and has addressed it with its generous financial aid scale where basically families pay 10% of the salaries up to $200K. They did not do this out of the goodness of their hearts or sympathies for the $100K families. They did this because they do take seriously their mission to get the best kids to apply and go there, and they know that they are missing kids whose families can afford to send them by most financial aid methodologies but the families are not willing to sacrifice the level to do so. </p>
<p>That the federal government gives heft amounts to colleges has truly affected their pricing. Some schools simply refuse to give kids more than what FAFSA indicated even if they have PROFILE to screen out even more financial ellements. Basically, there are schools out there that make it a business to snatch up the federal monies, and poach on those who are the least informed in the area and least able to afford using up their federal and state aid on programs that are not worthwhile. I see them all over the place where I live. They advertise, they get a kid in there, and his federal money is taken, 1,2, 3 with loans in place for more. </p>
<p>Colleges like American are not all that different in the position it puts families for whom it is simply not in their best interests to be borrowing and spending all that money for a private college. They such up your federal allotments and then put kids in exactly the straits you describe you found yourself in. </p>
<p>In your case, a local public is your best option. I am just sorry that schools like American are getting federal funds so that your local public option is not of the caliber of American. That is what I would like to see. When the money is taken from the privates and put into enhancing the publics, we’ll see what the best schools are and how much the private schools can charge.</p>
<p>Cptofthehouse … I’m trying to understand your position and right now I do not think I am hearing what you are saying. Here’s why. </p>
<p>The only federal financial aid are pell grants I believe and as Mini and SAY has pointed out not many “poor” families attend top private schools … and while I do not know the numbers I’d guess that 90+ of the financial aid dollars awarded at top private schools come from their endowment and were sourced from private donations. I’d also guess that THE Ohio State University had more Pell Grant recipients by itself than all the IVY, NESCAC (Amherst, Williams, etc), Stanford, Duke, MIT, and Emory combined. If seems to me requiring Pell Grants to be used at state schools would 1) be noise in the financial picture of a top private school … 2) reduce the economic diversity on those campuses … 3) and worst, have the unintended consequence of reducing the choices of very bright but poor students.</p>
<p>While you talked about “financial aid” maybe you were also considering two other buckets of federal money that goes to private schools. One would be work study money … this money does go to a much broader set of students at private schools … and while I know it is a subsidy of wages I do not know how big a subsidy it is (for some reason I’ve always thougth $2-$3/hr) across all financial aid recipients at all private schools that probably adds up to some real bucks … and in this case typically affects about 50% of the population of the schools … but again I’m not sure why reducing the options of these students is a posititve change.</p>
<p>I believe the really big federal budget item for colleges is research bucks … and that certainly goes to private schools in very big sums … not sure how this plays into a discussion of financial aid though.</p>
<p>So my first thoughts are …
- Restricting Pell Grants is not a big ticket dollar item but would restrict poor students options
- Restricting work study might be a lot bigger dollar item but again restricts poor students options
- Not sure what the tie to financial aid is about restricting research bucks
- Are there other buckets of federal dollars I missed?</p>
<p>Bottom line for me is a view my federal taxes allocated this way is through the lens of student who qualifies for federal aid. I’d like it to be easier to qualify (after a massive overhaul of FAFSA) and for those eligible to receive more and I’d like the student to have the freedom to take their aid to any accredited school.</p>
<p>As you have very clearly and correctly stated, PELL grant amounts are a drop in the bucket in terms of the aid going towards our poorest students going to private university. The maximum award of $5500 is just not going to do much towards costs edging towards $60K a year. Plus the top schools are not accepting very many such student anyways. So by eliminating the PELL for private schools, it’s just forcing those schools to come up with at most $5500 per PELL eligible students . That isn’t enough to restrict their options at most colleges that are meeting that big ticket aid. I’d prefer that the money go to Ohio State with its many PELL eligible students and maybe double their awards sot that more can afford to go there. Ohio State does not meet 100% of need. With double the PELL and more work study and subsidized loan options, more kids can get the option to go away to college.</p>
<p>For most kids, the first two years of college are affordable. There are enough community colleges located strategically, so that with PELL, work study, Stafford money, all kids can go to college. Yes, they have to live at home, just as they did for high school. But they can get their college education. The big problem is that a lot of these community colleges are below par in their offerings. They don’t offer the courses kids need too many times, and they often do not offer the courses at a level where kids can transfer into a rigorous university with the material in the foundation courses well covered. I feel that is a far more important priority that financing sleep away options that typically have to subsidized by unaffordable loans. </p>
<p>The other big problem is that after those two years at community college, the options for those kids who want that 4 year degree and don’t have the family support are very limited. As an example, a kid who lives in cities like Pittsburgh, Philly, and some other major cities have to pay tuitions and fees at the $16-18k level to commute to a 4 year state university. That’s an awfully big gap for kids who don’t have the money. The state schools should not be charging that much, or there should be more aid options available. </p>
<p>This is where the SUNY model excels. Here in the NYC area, there are many, many inexpensive commuter options for those who want their degrees. Our state tuition rates are at the $5K level, and for our poorest families, the state offers TAP along with the federal PELL and Stafford and work study options. </p>
<p>By building up these options so that they are the best, an area where NY has not done what they should, the state schools would be where the most talented students would want to go. This is where the UCs, VA, MI and some other states have done so well. Just as families who can well afford private schools send their kids to excellent public school systems for k-12, so they would for the college option if the excellence is there. Using the GA, FL, WV models with for in state tuition for the best students, more kids will want to stay in state as well. On top of that, offering scholarships for the top caliber out of state kids would make state systems compete with each other for the top students. </p>
<p>So to answer your points:</p>
<p>1) Restricting PELL grants is not a big ticket dollar item that would not restrict poor students’ options. Harvard isn’t going to let a piddling $5500 for their very few kids they accept with a zero EFC make a difference, nor would the other $60K cost schools</p>
<p>2) Restricting work study is not a bigger dollar item as the maximum work study awards are not that high, and for most areas, kids can find work at the college that are not work study. Poor students can be given first dibs on those non work study jobs.<br>
3) Research bucks are a whole other thing, and would have to be withdrawn slowly. But the emphasis should be toward moving the research bucks to the state universities. Make the state schools more desiable. Why enhance private schools with public dollars except where it makes the most sense? Start the move so that it pays more, there are more opportunities at the state schools.<br>
4) Tax wise and benefit wise, all schools get public subsidies. Every dollar of federal and state tax break they get should be carefully examined. </p>
<p>Very few schools meet full need for their students. The financial aid packages I have seen given to most kids with true need is pathetic. Most of such packages are just federal monies wrapped up so it looks like the college is giving out the funds and then the family has to take out an unaffordable loan.</p>
<p>If *your family wants you to go to American badly enough, you pay for it yourself. *
This isn’t what I thought the thread was moaning about. I thought it was: why shouldn’t high earning families get aid if middle earning families are?</p>
<p>Kayley, kudos for trying to present your view. If you do read from 6-26, you’ll see some agreement that lowest incomes should get aid. But, the argument shifts in and out about whether a 250k family can afford to pay for it themselves. Or, then it skipped down to a 180k family or 100k or whatever. No one ever settled on how to define low-middle-high; some dissed the Census figures and settled for, “Well, I know someone who…” Some felt a media resource (a secondary source, some guy paid to digest other info and make it attract readers) was sufficient defense. </p>
<p>And, sorry, but there was a long argument about whether your family is in it’s financial position by choice. Ie, some feel your dad could have picked a more lucrative career. So, a hard-working upper income family actually deserves more help than say, a bus driver. But, overall, a conviction that an ug dregree isn’t worth it. (Backed up by some media links, again.) Frustratiing. Oh and college costs are “extortion” and colleges are going to close down. (After all of ours graduate, I think!) </p>
<p>I am, like 3togo, wondering what the supposed benefit of eliminating federal aid is. My kids got Staffords- which are loans- anf the rest came from the school’s endowment. </p>
<p>Just the sight of my screen name will get some riled. I have been told that I don’t get it- despite the fact that I keep asking for deeper proof than hearsay or newspaper links. Maybe because I don’t share the doomsday predictions while demand for these good/expensive colleges is so high. Maybe because I don’t have much sympathy for a 250k family that’s barely getting by.</p>
<p>KFC my comments really are not case specific and geared towards the parents on the thread. If you read my various posts I have always said that I support FA only for poor or near poor families. The 40k range certainly would qualify from my point of view. The real issue to me about FA is that most of it is going to families making above the 70th or 80th % of income rather than helping truly needy students yet many posters here have discussed FA as a sort of noble cause. In your specific case my best advice to you is to intially attend comm college which is still affordable. Then after two years you will need to pay up to attain your degree. Here in CA I know many students doing this though usually because did not do well enough in HS to be admitted to the top tier UC’s. I wish you good luck and your situation is exactly the point I have been making on this thread.</p>
<p>lookingforward please present your view of how tuition can continue to rise far above wage growth and inflation and not be an education disaster. You make this sound as if this is a politcal discussion rather than a very simple economic analysis. In previous posts I have related it to healthcare inflation which has followed the same trajectory and now is bankrupting the country(and every other developed country). It is not a perfect analogy but the compounding math is very similar. For tutition 40k now at 5% it becomes 83k in fifteen short years.</p>
<p>Except in the situations like HOPE or Bright Futures where there is a targeted reason to include all income folks, I certainly do not believe that there should be government aid for high income folds. What I am addressing when posting here is that the cost for private colleges which are often the best schools in this country have been spiraling upward at a rate where they are becoming unaffordable for those who are living their lives in a wise way financially. That they are not already there, is because of the government subsidies these schools enjoy, in my opinion. </p>
<p>I think that many of the private schools, including many good Catholic colleges are having to discount their costs to a point where hardly anyone is paying full sticker price. The most desirable ones, of course not. They could probably charge 4X what they are and still have full classes. But I think the costs have long since gone over what the true value is and it is the governement subsidies, particularly in the loan areas are making this possible. Let the market be free and see what these colleges can really charge. Yes, H can charge $60K, but what about X College which is a local, private college that charges just as much as H? Is it worth $60K? No, not to most people, but with the federal loans out there, and that the school offers nice merit awards, it is. THose awards, by the way, do tend to go those able to pay the remainder of the cost as part of enrollment management. </p>
<p>I’d like the state schools to be the top choices for everyone, and that is where I’d like to see the tax money to be targeted. It will take a while to make the transition, but I think enough things have happened in the last few years to accelerate this process. That we are not taking the housing loan debacle seriously when it comes to student loans is foolish. </p>
<p>I have been saying for years, that the rapid increase of tuition is absurd and has to end. I’ve been wrong, but mainly because of the facilitation of those who cannot pay with loans that would not be given for any other reason even secured in amounts that are absurd given the financial statements.</p>
<p>“the OBAMA wealthy”??? what? did u have a problem with the “wealth” of any of the past 43 presidents? yes, this is off-topic, but that comment struck me as ridiculous and really beside the point.</p>
<p>this thread is a joke.</p>
<p>kayley: if you’re as committed to your education as you say, then accepting aid (even the bad-word GOVERNMENT aid) shouldn’t cause you a bit of shame or concern. get what you need for your education and keep it moving…</p>
<p>I am just using the “Obama wealthy” as a cut off that has become commonly known. I could just as easily used a figure close to that. </p>
<p>For Kayley, the problem is that the government aid is not enough to pay for American University unless the university also gives a big amount of private money. $5500 in PELL< $5500 in Stafford is really all a zero EFC guarantees towards a school that costs $50K+. Maybe some workstudy, maybe some more loans. Over 4 years, the loans will add up. The goverment aid is truly not enough to make a big difference, and if American won’t make up the difference with that amount thrown in, I doubt that the aid is much help as all it does is put the pressure on to take out loans for the difference for many who cannot afford to do so.</p>
<p>cpt- I do think the idea of moving Pell money to state schools is intriguing. So, now a state U could either up the amount a poor kid gets from a Pell or raise the income threshold, to offer more Pells. And, the Amhersts would have to find that missing aid in their own pockets. Could they? Of course. They are fundraising machines. But, some rearrangements would likely occur. Perhaps fewer “low need” families would get funding- or they’d see the amounts reduced. (Eg, a 4k teaser award might become 2-3k or none, assuming the college remains interested in funding worthy low income kids.) </p>
<p>Then, the focus shifts to the education kids get at staties- whether it is a valid educational opp or standards should be raised; whether it is serving a greater population or too many underqualified kids are just going through the motions. To enroll a manageable number (that fit in dorm, class and common space,) standards could go up. Oops. (Think UVA.) Or, the schools could undertake new building programs. Oops. But, still an intriguing idea.</p>
<p>Btw, in a free-market system, perceived value can drive price. The key word is “perceived.” I know plenty of kids in 3rd-4th tier schools; most of them are not smart, period. But, they want a diploma and that social interim between hs and adulthood. That’s why “X College which is a local, private college” can charge as much as H. IMO. There is plenty of demand for these sorts of schools. </p>
<p>About demand- at a certain point, a good argument has to acknowledge things as they actually are. In economic theory, there are “elastic and inelastic needs.” In the latter, perceived value outweighs cost (in dollars or otherwise.) In the last gas price crisis, demand was seen as inelastic- cost didn’t change actions. It took 40 years to shift people’s thinking. When an Ivy gets 30,000 apps for 2000 freshman slots or an LAC gets 10,000 for 500, we are very far from predicting doom for the schools. It’s not as simple as just blaming Pells or loans. Parents need to use a little critical thinking.</p>
<p>lookingforward who is talking about doom for the top schools? But the current system is broken and will not be able to continue in it’s current form for long. In the end the country cannot afford to spend/waste 80-100k per year on degrees that do not lead to good paying jobs. In the end it doesn’t really matter who’s paying but rather that the cost of the good(degree) has become wildly disconnected from it’s value.</p>
<p>SAY, I’ve been like Chicken Little saying this for 30 years. Now I no longer believe the sky will fall down on us, but I do believe that it will be a slow suffocation and slow changes to get more air as it happens.</p>
<p>The big difference now is even the professional degree jobs like law and medicine are under siege. A large percentage of the students come from these types of families and the more recent grads are now starting off with significant debt and a much lower income ceiling. Obamacare or whatever is coming is going to ever decrease the income of doctors and the new reality for lawyers is that very few ever make big incomes or become partners. So the professional families now with kids in primary school just won’t be able to afford the top schools without significant aid. So the elite college classes are going to consist almost entirely of truly wealthy children and those of the middle class receiving nearly full aid. Unless significant aid is givin to those making from 200-300k in a very short time they will be shut out of the top schools where the parents themselves were educated. You may have been early on your call but you were not wrong.</p>
<p>We’ll see. This year the top schools got more applicants than ever. I think I see a number of the private schools that are not so highly regarded undergoing meltdowns, but that has been long in coming and we’ll have to see how that goes. We are going into an era of fewer college aged kids, but we are also seeing more non traditional students going the traditional student route (in my UG years, I didn’t know a single kid who wasn’t within a year of two of my age who was a frosh with me and in the dorms, now there are kids in their 20s going to “away” college via the dorm experience) I see a definite softening in the market but I think the changes are going to come slowly. </p>
<p>One thing that disappointed me greatly with Obama’s changes to fin aid is that the interest for subsidized Staffords is going to go up. A hit on those most needy.</p>
<p>In a free-market system, perceived value can drive price. </p>
<p>Some colleges are also increasing the number of full-pay internationals. And, many are upping their ancillary programs-- summer enrichment programs for high schoolers, ElderU, “community ed” programs (the old continuing ed, but covering adults, teens and younger kids,) or leasing space in summer to arts festivals, tennis camps, whatever. All are usually profit generating, probably not much. But, it’s a smart way to use resources (classrooms, dorm space, etc) that would otherwise sit empty on evenings, weekends and breaks. </p>
<p>I think you’re right that some lousy little colleges that barely serve anyone are going to drop off the radar. Unless they evolve fast (but, that’s about more than cost.) Some of the very conservative religious schools have changed their marketing. I am aware of some teenies (the sort that accept nearly all applicants) in the northeast that offer substantial merit money to entice kids whose families have 0 EFC. </p>
<p>My prediction: as long as not-too-sharp Little Suzy’s parents want her to have a diploma- and don’t really want it to be too academically strenuous- many of the sweet, pretty little schools with nice-enough kids are going to be around. As long as people, young or not, who don’t qualify for a more selective school are bent on going somewhere, even the unattractive campuses will attract sudents. And, you know what? These colleges will keep finding ways to tout some great thing they do offer- look at the recent crazy ads for the biggest online “college.” It makes it sound like a serious winner. No, you should not be loan-bound. But, the availability of loans doesn’t mean parents shouldn’t apply some critical thinking.</p>
<p>cpt … thanks for the explanations … makes a lot sense and a lot of food for thought!</p>