<p>Yes Pan, the economy is tanking!</p>
<p>What really concerns me is the way so many schools LAST YEAR mentioned the challenge of funding FA. Most of these schools have seen a decrease of at least 20% in their endowments since then. I am not optimistic about FA applicants chances this year. It is indeed a good time to be a smart AND rich kid. (As if it wasn't always the case!)</p>
<p>The new fed budget proposes to reduce tax benefits of charitable giving for the wealthest americans. Obviously a great concern to BS and colleges alike. True, it's still only a budget proposal but key steps in the budget process can't be fillibustered and Dems have majorities in both chambers. Many endownments will be on life support.</p>
<p>If the $250,000 joint income thing goes through, I wonder how many professional couples will choose to have one parent leave the workforce? If both incomes put you over the line, one income may leave you more money at the end, once you take into account all the associated costs for two careers. (Clothes, cars, household help, nannies/sitters, professional training, malpractice insurance for doctors, etc.)</p>
<p>I think that could be devastating for many private schools, especially those who have many dual career couples.</p>
<p>I remember hearing that taxes for the wealthy will be raised to the same level as in the Clinton administration. I've never gone over that line and I don't know what that rate was & how much increase that would be, but did the Bush admistration help in boosting the BS industry?</p>
<p>Well, NCLB certainly helped.</p>
<p>Actually watertester, my husband and I were talking about this just last night. Two years ago I reduced the level of activity in my law firm to ensure that we didn't trigger AMT again. My working less actually increased the net in our pocket at the end of the year. While our joint net income is over $250,000 it is not over $300,000. In our case we are squeezed every which way. Can't get financial aid - taxes going up - not overextended because we did not make bad decisions , so housing costs 100% on our shoulders - huge losses in retirement accounts, etc. So, in a nutshell, yes. We did the math - our after tax income will go up if we work less and earn less. That may be the only way to afford tuition. As far as additional funding provided to the schools - don't see how we can do that. Time will tell.</p>
<p>There will still be financial aid, no matter how grim things get. The schools are nonprofit institutions. First, I do believe that the people who run the schools, and those who sit on their boards, have a fundamental commitment to educating students from all parts of society. They will cut in other places for as long as they can.</p>
<p>Second, as non-profits, they must behave as non-profits. I would think that too little a level of financial aid could put their status in jeopardy, in the long run. Only last year, Congress was making serious noises about requiring colleges to spend set percentages from their endowments. States and towns regularly complain about schools' exemptions from property taxes, and many schools make some "payments in lieu of taxes." Very few schools could continue to operate, if they had to pay taxes on their income.</p>
<p>With all due respect, and at the risk of offending some, most of you are fantasizing. Unless we see the resumption of robust economic growth, the era of egalitarianism in American education will end, if it has not already done so. The ideal of open merit-based access to elite institutions without regard to socioeconomic circumstances is an aberration, not the historical rule. To survive, that access is dependent upon economic growth and vitality. Throughout history, the rich and powerful have dominated elite institutions. Forced by economic circumstances, we are reverting to traditional social arrangements and understandings. Several generations of social progress are at risk.</p>
<p>Pan1956, I'm not offended (if you thought I might be.) I do think that there will be financial aid, but it may be used in different ways. I would predict that you will be much more likely to see a full ride for a genius from a disadvantaged background, than to see partial packages for middle-class applicants. That is the historical model. If you look to previous generations, you will see "scholarship students," exceptionally promising students supported by donors. </p>
<p>In my opinion, the middle class will be squeezed out, if the downturn lasts too long. Only those candidates whose grandparents and uncles are willing to help will be able to afford a prep school education.</p>
<p>I would quibble with the concept of "the ideal of open merit-based access to elite institutions without regard to socioeconomic circumstances." I wouldn't say we have that now. Yes, a few schools offer to meet all need, and are need blind in admissions. However, it takes an enormous amount of resources to prepare a student for admission to these institutions. The traditional social arrangements are still present.</p>
<p>Of course, I could be wrong. Colleges</a> Cut Anything but Aid to Keep Students - Readers' Comments - NYTimes.com</p>
<p>
[quote]
The full-pays are few and far between, said Greg Eichhorn, the vice president for enrollment management at Albright. What were looking for are better-pays.
[/quote]
</p>
<p>
[quote]
At Dickinson College, in Carlisle, Pa., for example, merit aid, at its highest, made up about 22 percent of the financial-assistance pie. The share declined to 6 percent two years ago, but crept up to 7 percent last year and will increase to 8 percent for next years entering class.</p>
<p>The families Im concerned about are the near-misses the $90,000 to $130,000 families, who almost qualify for aid but not quite, said Robert J. Massa, the colleges vice president for enrollment. Those are the families I want to target more merit-based aid to.
[/quote]
</p>
<p>That NYT article makes reference primarily to small colleges that do not have access to a lot of true full pay applicants. In order to make ends meet, they resort to pulling in a lot of partial pay students. They would rather have a partial pay than an empty desk in a classroom. By way of contrast, the elite institutions have access to plenty of full pay applicants. So when the belt is tightened, as it inevitably will, the elite schools will have the option of opening up the full pay spigot.</p>
<p>pan, i agree with what you say. this may also explain the drop off in admit rates to ivys from the preps the last 20 years or so. we may begin to see a reversal in that trend in the years to come driven by economics.</p>
<p>catg,
Only economics drives decisions. Not ideals, not aspirations, not hopes, not commitments to justice or fairness. Economics. Pure and simple. Always has, always will.</p>
<p>This article made me think of luvscuba's post about scaling back income: ABC</a> News: Upper-Income Taxpayers Look for Ways to Sidestep Obama Tax-Hike Plan</p>
<p>There was a reference to part of Obama's near 1 trillion dollar in new taxes plan that just made me laugh. There is a proposed increase on capital gains taxes. What capital gains?!?!</p>
<p>Of course, abc news doesn't seem to think the plan will pass since it doesn't have support from either party.</p>
<p>I think most schools are just decreasing their acceptance rate in order to provide more than enough FA for those students that are more than qualified. this is probably the most selective year. heres an article from dartmouth about their FA. Tuition</a>, Fees, and Financial Aid</p>
<p>The schools are gearing up to utilize more of their FA towards retaining students who have been FP or partial FA and need some help in order to continue at the school in the years to come.
Admitting less students? I doubt it.</p>
<p>Schools will absolutely not admit fewer students. They will admit more full paying students and take care of the students already there first.</p>
<p>That's what I was thinking, hmom5. Twenty more full pay students equals close to a million dollars to pay for the new requests for FA.</p>
<p>Twenty more full pays may approach a milion yearly, but how many schools have ready access to an additional twenty full pays????</p>