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True, but historically, it was easy to borrow the money to attend. I don't think that is the case this year!
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<p>The reports I'm reading this weekend from NACUBO and Standard and Poor's suggest that the federal student loan program is back up and running effectively. The catch is that many community colleges have opted not to participate, because they have some risk if students default.</p>
<p>What is not up and running is private non-government college lending. That's pretty much dead in the water which is going to impact wealthier college customers.</p>
<p>I actually think the publics are going to be gutted this time around. The state budget deficits are simply overwhelming. I just don't know if the universities will be able to achieve the budget cuts simply by pruning. I suspect they'll have to go in with a chain saw and wipe out entire programs as Tulane did after Katrina.</p>
<p>No endowment privates living from tuition check to tuition check will be under some pressure, especially if they were already finding it tough to keep enrollment up. The colleges with enrollment in the hundreds can start taking on water pretty quickly if enrollment starts eroding.</p>
<p>I also think the larger research universities are going to face some challenging times as research dollars dry up leaving them with large faculties twiddling their thumbs and not generating revenue.</p>
<p>I don't know if there is any particular type of school that isn't going to come under some pressure.</p>
<p>One of the reports I was reading (either NACUBO or MOODY's), said that December was a vulnerable time for colleges from a cash flow standpoint with the fall's tuition money spent, waiting for spring semester checks to arrive. Combine that with some hedge fund cash calls or a mandatory buy back on a Variable Rate Demand Bond and just about any college will be scrambling to raise some cash. We'll probably see some dancin' between now and the first of the year, but I don't see any schools going out of business that soon unless they were already in serious trouble.</p>
<p>A friend who is Dean of a private law school was telling me that, since they rely on tuition, they are going deeper into the pile of applicants for acceptances to make sure the bills are paid. This is hazardous, as the less qualified students are more likely to flounder, which hurts the school both short-term (graduation rate) and long-term (job placement, fund-raising). And this was last year, before the economic crisis.</p>
<p>I think that admissions officers across America, including some of the snooty joints, are going to be dusting off their copies of the old J. Geils Band classic, First I Look at the Purse, as they cull through this year's stack of applications.</p>
<p>They will all deny that they are doing it, but the best way to goose tuition revenues is to slip a few extra full-pay customers into the mix. They can always blame it on a yield fluke. Diversity is so expensive that it almost certainly has to take a hit in hard economic times, even if nobody will talk about it.</p>
<p>Even some very fancy elite privates will be forced to make some pretty drastic changes in their operating budgets. I've heard, for example, that at one Ivy---I won't say which one, but it's located in upstate NY---the central administration is asking the colleges to model budget cuts of 10% and 15%. Ouch! That's not just cutting the fat, that's to the bone. It's got to ding curriculum. The precise mix of measures will also vary from school to school and there will be some outliers, but cumulatively I expect colleges to try to make ends meet by charging more and offering less---just what applicants and their parents don't want to hear.</p>
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I also think the larger research universities are going to face some challenging times as research dollars dry up leaving them with large faculties twiddling their thumbs and not generating revenue.
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Actually, the problem is worse than that. Research universities generate a lot of revenue under indirect cost provisions in federal grants (often in the range of 60% or so of direct costs) to pay overhead, including facilities. If the overhead revenue does not come in, there may not be the funds to pay off those tax exempt bonds they used to build the research facility! OK, it is more complex than that, but you get the idea.</p>
<p>ID, I was wondering when this very enlightening thread would get around to what seems like one of the easiest ways the Ivy-type schools have to raise cash by next September -- admit more full-pay students, at all levels (undergrad, grad, professional). Publics may take more OOS students (will the UCs lift their cap now?).</p>
<p>How expensive is economic diversity for universities? And which income groups will be most likely to take the hit, the lowest who get full rides or those upper-middle folks the schools were just starting to give more aid to? Is it more about which groups cost the most or about what admissions results will be easiest to spin as a "fluke"? Will there be less for athletic recruiting?</p>
<p>I also find myself wondering how a university administration would convey to the admissions folks at all its constituent schools to shift admissions toward full-pay, since it is my impression that there is often a separation between the financial aid folks and the admissions staff and grad faculty. What kind of financial information does admissions staff get? They may see if there is an application for a fee waiver (read low, low income) or no fee waiver but a check off for financial aid (middle income). No Social Security number on the app is also apparently a dead giveaway that the student is not applying for financial aid.</p>
<p>Heck, wisedad, why not go full free market? After all, Harvard says every year that they could fill their class several times over equally well with those they reject.</p>
<p>So, maybe Harvard should select a large pool of kids they deem "qualified", then auction off the actual slots to the highest 1200 bidders (or however many they enroll per year). After all, why "cap" tuition at what they currently charge? </p>
<p>Or, they could raise tuition until they get to a market clearing price...that is, one where yield just fills the available seats. Financially, it makes a lot of sense. After all, with the demand for a Harvard education, they seem to be radically underpricing the product.</p>
<p>Edit: How this post ended up AFTER wisedad's post, to which I was responding, is beyond me???</p>
<p>NMD, yeah, what happened there? But I love your market clearing idea! Or how maybe they can just auction a few slots, not enough to completely dilute the value of the brand, but enough to bring in some more cash?</p>
<p>Oh, wait, that's what they already do. It's called "development admits". Maybe the price to be a development case has gone down?</p>
I also find myself wondering how a university administration would convey to the admissions folks at all its constituent schools to shift admissions toward full-pay, since it is my impression that there is often a separation between the financial aid folks and the admissions staff and grad faculty.
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<p>All applications ask a direct question.
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<p>Do you intend to apply for need-based financial aid? Yes No </p>
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Bottom Line: Will this help full paying student getting acceptances from the Ivies or not?
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<p>I don't like the term "the Ivies" because it includes schools that are as different as night and day Brown and UPenn are nothing like Harvard from a financial standpoint.</p>
<p>With that caveat, the short answer to your question is, "no, it won't make any discernable difference to a given student at schools with acceptance rates in the teens or single digits." Looking at the incoming class as a whole, we might see the percentage of full-pay students shift a point or two. Translating that to the individual student application is impossible.</p>
<p>That's the really the tier of schools where tuition revenue will be the driving force. Look more closely at merit discounting schools.</p>
<p>Are there any stats on how many Harvard undergrad applicants apply for need-based financial aid versus applicants who don't? </p>
<p>I don't think that's a question in the common data set and Harvard doesn't participate in that anyway, but it would interesting to see the stats on this question for lots of schools.</p>
<p>Schools like HYPS are firmly committed to need-blind admissions and I don't think they'll fail to honor that commitment without making an announcement in advance, which they're all reluctant to do for competitive and p.r. reasons, as well as for the principle of the thing. I'd expect to see more of a shift toward full-pays in not-need-blind or not-100%-need-blind schools, where it's easier to shave a few points in favor of full-pays without causing a big ruckus. That's the vast majority of colleges and universities; the number of truly need-blind schools is a very, very small fraction of the total.</p>
<p>As dire as Harvard's financial situation may be, this has got to be a really perilous time for a school like Brown which doesn't have nearly as deep pockets. Will they be able to maintain their commitment to 100% need-blind admissions and meeting 100% of demonstrated need? If not, can they remain competitive at the level they aspire to? Stay tuned.</p>
<p>"And that's only for undergrads? The total for all schools must be much greater."</p>
<p>It might be, but most of the schools don't give nearly as much financial aid as the College. Need-based grant aid is minimal at the law school, business school, etc. PhD students generally have fellowships that cover tuition, but there just aren't that many of them. The ed school, the divinity school, and the Kennedy school are paupers relative to the college, business, law, and med.</p>
Schools like HYPS are firmly committed to need-blind admissions and I don't think they'll fail to honor that commitment without making an announcement in advance, which they're all reluctant to do for competitive and p.r. reasons, as well as for the principle of the thing.
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I don't think HYPS will make an announcement as it is a temporary thing for a year or two and will come back to being 100% need blind. It is like everyone on the admission committee is aware of the situation and will vote for a full paying student but with reasons other than the tuition.</p>
<p>"It is like everyone on the admission committee is aware of the situation and will vote for a full paying student but with reasons other than the tuition."</p>
<p>This would make sense if the financial aid money came out of admissions' pocket, but it doesn't. They're not in charge of the budget. It's not their problem if the fin aid costs a lot. They have no incentive to be a little bit need-aware.</p>