Free Tuition War?

Parents Forum
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<p>64% of MITs students receive need-based financial aid with an average grant portion of $24,244. That is a very high percentage, so I don't think MIT's aid budget is chicken feed!</p>

<p>The 36% of MITs students who don't qualify for a dime of financial aid would be the biggest recepients of a free tuition plan. Each of these students, many of who ARE very wealthy, would receive a $160,000 or so price reduction over four years.</p>

<p>On the surface, it sounds like "free tuition" would be a big break for poor students. But, in reality, the big break would come for many students who can pay full tuition for four years on less than it costs to keep the Gulfstream flying for a month.</p>

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<p>I agree with Wisteria about one logical place to look is MIT. Though, they may claim that they have "Open Sourced" their education already with the Open Courseware initiative. Look a few miles west at the Olin College of Engineering. Free Tuition!!! at least for now. Here is a reference:</p>

<p><a href="http://www.olin.edu/on.asp%5B/url%5D"&gt;http://www.olin.edu/on.asp&lt;/a&gt;&lt;/p>

<p>And in keeping with the spitit of this thread, the entry from the Wikipedia:</p>

<p><a href="http://en.wikipedia.org/wiki/Olin_College%5B/url%5D"&gt;http://en.wikipedia.org/wiki/Olin_College&lt;/a&gt;&lt;/p>

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<p>I didn't say MIT's need-based aid is chickenfeed. </p>

<p>They have a big budget for financial aid because they do attract a lot of students with need, including a number with very high need (Pell grant recipients and international students) to whom they HAVE to provide very generous funding (or else the students just couldn't come.)</p>

<p>But the fact is that BEYOND that group that already gets close to a full-ride, MIT's aid formula is often less generous than some of its competitors. </p>

<p>These are families with incomes around 100K, who may have lots of far more serious financial concerns on their horizon---like jobs that are very insecure, family businesses that may be doing well at the moment but face tough competition in a few years, uncertain future of Social Security and financially shaky corporate pension plans, elderly parents who may need some extra help to pay home health care aides, one or both parents may have medical problems of their own which could get expensive to deal with in the next few years (lots of stuff insurance doesn't cover, as NYT series recently highlighted), etc.</p>

<p>If one of these disasters strikes while the student is IN college, I'm sure MIT's financial aid department will adjust aid appropriately. </p>

<p>But many of these families are concerned about the prospect that disaster may strike a few years down the road, AFTER the student has graduated. If they drain their savings and take out a home-equity loan now to pay their share of MIT tuition, and find that their financial situation has changed a year or so after the kid graduates, they're still stuck paying off that loan and their savings are still drained.</p>

<p>These are NOT the Gulfstream-jetting about families. (I seriously doubt that MIT has many of those. Gulfstream-jetting-about families are far more likely to send their kids to other prestigiious colleges, colleges which will take the family's "donation potential" into account in admitting them.)</p>

<p>But there ARE families with incomes around 100K (and aftertax incomes much lower than that) for whom the fact that MIT's aid formula yields a price $10,000 per year higher than Princeton's or Harvard's is a real burden. Some of those same students are winning full-rides to the honors colleges at their state universities. At the moment, MIT is losing some of those students.</p>

<p>I could see a incredibly wealthy rabid fan of MIT deciding to make zero tuition a reality in order to assure that MIT attracts the best and the brightest REGARDLESS of their parents' willingness or ability to pay for an MIT education, especially because it fits into MIT's overall philosophy of providing information as freely as possible.</p>

<p>I don't necessarily say it's necessarily good public policy, simply that it COULD happen. And if it happens, it would likely start a tuition war.</p>

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<p>
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MIT is already free to poor students.

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</p>

<p>How long have they been doing this? Do you know what the no-loan cut-off is?</p>

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<p>
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How long have they been doing this? Do you know what the no-loan cut-off is?

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</p>

<p>MIT has a flat $5,500 self-help expectation from all students. They leave it up to the student as to how to meet that expectation--from any combination of work, loans, and outside scholarships as they see fit. A poor student who has overcome enough obstacles to qualify for MIT is likely to be a very attractive candidate for outside scholarships, but there are no guarantees.</p>

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<p>Wisteria, does the $5,500 flat help figure include the expected summer earnings? </p>

<p>Also, don't you have to add a non-trivial figure for the mandatory health insurance that does not appear to be part of the COA?</p>

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<p>xiggi asked:

[quote]
Wisteria, does the $5,500 flat help figure include the expected summer earnings?

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</p>

<p>Not entirely. As Mr. Barkowitz (MIT Fin Aid director) wrote in his blog (excerpt below), there is a minimum summer earnings expectation from all students. Any summer earning IN EXCESS of that minimum can be applied toward the $5,500 self-help expectation.</p>

<p>
[quote]
Some institutions (MIT included) have minimum student contribution levels that they set which reflect the expectation that students will earn money during the summer before the school year begins. At MIT, the minimum student contribution levels are $1500 for Freshmen, $2200 for Sophomores, $2500 for Juniors, and $2800 for Seniors. If your contribution seems to be higher than this (for IM purposes) any amount that we expect over these minimums is removed from your self-help (loans and work) not your grant, therefore not penalizing you for earning too much. This also means that you can work for more than the minimum number of hours in the summer, knowing that what you earn can replace the expectation of work or borrowing during the school year.

[/quote]

source: <a href="http://blogs.mit.edu/barkowitz/posts/7271.aspx%5B/url%5D"&gt;http://blogs.mit.edu/barkowitz/posts/7271.aspx&lt;/a&gt;&lt;/p>

<p>MIT provides generous funding for UROPs so students can earn significant amounts of money while doing something that is educationally valuable and worthwhile for the student. Summer living expenses can often be minimized by serving as a dorm advisor in one of the summer programs. There are also some very highly paid summer internships offered to many MIT students (e.g., on Wall Street, at places like Microsoft, etc.)</p>

<p>xiggi also asked: </p>

<p>
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Also, don't you have to add a non-trivial figure for the mandatory health insurance that does not appear to be part of the COA?

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</p>

<p>Some students may already have comparable coverage under their parents' employer-provided insurance. (This may be true even of some low-income families, e.g., those employed in low-paying government jobs, e.g., teacher aides, etc.) </p>

<p>For poor students whose parents' health insurance policies do not provide adequate coverage and for whom that additional cost of insurance would present a substantial additional burden, I have the impression that Mr. B's staff would be open to some flexibility--as they would for any family that had burdensome medical bills. (What constitutes a "burdensome" medical bill, of course, depends on the context of parental income. Just as the IRS only takes into account medical bills over 7.5% of AGI, it's not unreasonable for financial aid officers to expect families to cover a reasonable amount of routine medical expenses without special adjustment, but what is "reasonable" depends on income.)</p>

<p>My impression is that Mr. B and his staff work very hard to try to stretch limited resources as far and as fairly as they can go, with a clear priority exactly where it should be--on the students whose families have the least resources.</p>

<p>Free tuition, in and of itself, would not change "the bottom line" for the poorest students. Their MIT grants are typically already well in excess of free tuition.</p>

<p>EDIT: (Added thought) If a generous donor came along and gave MIT an endowment sufficient to make tuition zero for all students, it would free up considerable resources that could be redirected to even more generous support for low income students. It could also allow MIT to relax its tight quotas on the number of international students it can admit, since these students are often on pretty close to full financial aid, but they contribute a lot to MIT's educational environment--and to its status and recognition as a world-class institution.</p>

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<p>Would seem to make more sense to me to RAISE list-price tuition, and have sufficient resources for those who can't pay it. MIT (and virtually everywhere else) seems to think the same way.</p>

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<p>It's an interesting thought-experiment to think what would happen if some visionary donor contributed enough to make MIT tuition-free to all students (along with generous need-based aid to cover other costs of attendance for the poorest students). </p>

<p>It would be a dramatic move that would change the culture there.</p>

<p>MIT is pretty well-known for a philosophy that expects students to be independent from parents. If tuition were free, many students could manage to pay for most if not all the remaining costs of their education with little parental help, if they chose to do so, with a combination of loans and the kind of generously paid jobs available to MIT students along with some scrimping and scrounging (MIT doesn't require a board plan for students living in most places, so some students seem to live on a combination of ramen/rice/macaroni and a radar which detect the frequent "free food" opportunities around campus) and possibly a few outside scholarships thrown in.</p>

<p>(This would still be a daunting and intimidating prospect for the poorest students with no parental safety-net at all, so I think MIT should still be in the business of providing need-based aid to such students rather than expecting them to scrounge around. And higher-income parents who didn't want their kids to be scrounging around would certainly have the ability to subsidize their kid by mutual agreement with the kid.)</p>

<p>But the overall culture at MIT would be quite different--you'd have a campus filled with students with a general mindset of great autonomy from their parents, a sense of determining their own path in life, without needing to accommodate parental expectations to "do pre-med" or "get all A's" or whatever.</p>

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<p>
[quote]
Would seem to make more sense to me to RAISE list-price tuition, and have sufficient resources for those who can't pay it. MIT (and virtually everywhere else) seems to think the same way.

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</p>

<p>Not at the graduate level of education, as has already been pointed out.</p>

<p>And many typical MIT classes are tougher than what is labelled "graduate-school coursework" at other institutions.</p>

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<p>If that's the self-help expectation, then I am not sure I'd consider an MIT tuition "Free" for poor students. Working for tuition, however generous and educational the job program, isn't the same as the education being free.</p>

<p>When interesteddad made that claim, I assumed that meant all aid was in grant form. Am I missing his meaning?</p>

<p>I'm not saying work-study is bad; and I believe you are right, wisteria, that a juicy "free tuition' program wouldn't change the bottom line for such students. But it's just not clear to me that an MIT education is free for poor students. </p>

<p>(I knew about Princeton, UNC and UVa's programs, and thought I'd perhaps missed that MIT also belonged on that list).</p>

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<p>
[quote]
Working for tuition, however generous and educational the job program, isn't the same as the education being free.

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</p>

<p>Poor students aren't "working for tuition" at MIT, since their grants would typically more than cover tuition. If they don't have outside scholarship funds, they would need to work to cover some of their living expenses and incidentals (and possibly contributions to their families, as mini has pointed out in other contexts.)</p>

<p>EDIT: Some MIT students have pointed out that MIT's budget for food and other incidental expenses is relatively generous, at least for students who are resourceful about thrifty cooking and taking advantage of the many lavish "free food" on-campus festivities. MIT students seem to be awfully resourceful about stuff like building their own computers (with free or dirt-cheap used stuff from the monthly "swap-meet"), decorating with scrounged stuff rather than purchased stuff, etc. And MIT does stuff like provide free original artwork from its collection to loan to students and provide a "winter-clothing" fair to international students and others from warm climates.</p>

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<p>"Not at the graduate level of education, as has already been pointed out.</p>

<p>And many typical MIT classes are tougher than what is labelled "graduate-school coursework" at other institutions."</p>

<p>I don't see what that has to do with anything. It's still an undergraduate degree. Pre-professional. Just like a thousand other places. MIT is one of the "good guys" (if by that one means offering lots of aid to students who require it, and not maintaining a glass ceiling on the percentage of students receiving aid, as seems to exist at HYP, AWS, etc.). </p>

<p>If the wealthy don't require the full subsidy, it is hard to see what social or educational objective is accomplished by providing one (since they are already provided a huge subsidy, as the cost of tuition is much lower than the cost of the education provided.) </p>

<p>Whatever. MIT sees it the way I do. List-price tuition will continue to go up. In my book, that's a good thing, not a bad one.</p>

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<p>
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Whatever. MIT sees it the way I do. List-price tuition will continue to go up.

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</p>

<p>If an incredibly wealthy donor came along offering to endow MIT with enough money to make MIT tuition free for all students, I think they'd happily accept.</p>

<p>After all, MIT is perfectly happy to sponsor RSI (no charge to attending students for tuition or living expenses, regardless of family income). The money to support that program comes from outside donors--and MIT happily accepts it.</p>

<p>I don't disagree with the way that MIT currently uses their limited financial aid resources, but that's not to say they wouldn't be delighted to accept a huge endowed donation that made tuition free for all.</p>

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<p>
[quote]
Poor students aren't "working for tuition" at MIT, since their grants would typically more than cover tuition.

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</p>

<p>Thanks for the clarification. I should have said "working for their education" more broadly. As I said, I agree with you that a 'free tuition" plan doesn't change their circumstances, as their tuition is already (generally) covered and they use self-help to pay for what's left over whether that's room, board, fees, incidentals. </p>

<p>I'm just trying to get a handle on the "MIT is already free to poor students" statement. Did he instead mean that tuition was free? Or is the entire cost of an MIT education covered by grants and scholarships? This seems to contradict the financial aid policies and programs you are describing (and doing a good job of it, too--thanks, it's interesting).</p>

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<p>As other folks have noted, they could do that now if they wished (like Berea), without the donation. They have plenty of money to do so if they chose (like Cooper Union); they just choose to spend it otherwise.</p>

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<p>
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It's still an undergraduate degree. Pre-professional. Just like a thousand other places.

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</p>

<p>There are not "a thousand other places" where students work as hard as they do at MIT. </p>

<p>An MIT B.S. means a lot more than a Ph.D. from most graduate programs in terms of the student's command of the discipline and the sophistication of the research projects on which they've typically worked.</p>

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<p>
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They have plenty of money to do so if they chose (like Cooper Union); they just choose to spend it otherwise.

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</p>

<p>Not true. Much of MIT's current endowment is restricted by past donors (who aren't around to modify the terms of those restrictions.)</p>

<p>It would take a visionary new donor with a bee in his or her bonnet, determined to make a splashy impact on MIT's image.</p>

<p>I'm not saying that MIT's highest fund-raising priority is to find a donor willing to do this. I am saying that if a donor came along, determined to endow MIT with the power to offer tuition-free education to its students, they would be happy to accept.</p>

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<p>Yadda. Yadda. Yadda. Fine education, of course. I don't see anyone exempting MIT students from Ph.D. requirements. </p>

<p>Anyway, they work hard. I can't see why in the least that should exempt students (who can afford it) from paying for the privilege. (and MIT sees it the same way.)</p>

<p>"Not true. Much of MIT's current endowment is restricted by past donors (who aren't around to modify the terms of those restrictions.)"</p>

<p>You obviously haven't done the math to see how little it would in fact cost (given that 72% of students are already receiving massive amounts of financial aid.) But it would mean a change in spending priorities, not one they would likely see a reason to make.</p>

<p>Of MIT's 4,136 undergrads, 1,156 do not receive any need-based aid. The cost of providing full tuition to all of them would be $37,338,000, minus any outside merit aid they currently receive (likely substantial). MIT's current endowment is just under $8 billion. The cost of making MIT tuition-free for these students would be under 0.4% of the endowment. If you add in the addition for those already receiving aid, it would be roughly 0.5% of the endowment - in other words, chump change on an endowment that earns in excess of 6-7%. But it would require a change in spending priorities.</p>

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<p>Back to Yale, I wonder how this connects with the grad students' unionization, which is is not, I believe, recognized by the administration...</p>