<p>"Many public universities have tried to keep tuition down for low-income students while raising it for the rest. Instead, they've made education less affordable for everyone." </p>
<p>What do you think? </p>
<p>How</a> Not to Help the Poor: The Lesson of Soaring College Prices - Josh Freedman - The Atlantic</p>
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<p>Penn State’s model is high-tuition, low-aid, since it is one of the worst state flagships for in-state need-based financial aid. UIUC is another school that has a similar high-tuition, low-aid model.</p>
<p>Probably only a few state flagships, like those in California, Michigan, and Washington actually have the high-tuition, high-aid model for in-state students.</p>
<p>Great article that shows how the continued, higher-than-inflation increases impact everyone, including low-income students. The idea that a student with family income of under $30K would pay $17K annually to attend Penn State shows that many colleges are simply unaffordable even with maximum aid. </p>
<p>Of course, every school doesn’t have the mission of being affordable to every student who qualifies for admission. Still, one would think a flagship state school could do a little better.</p>
<p>Colleges are the only major entity that can practice price discrimination with legal impunity. Imagine if your Toyota dealer could look at every detail of your income and assets, and then quote you a price based on what they thought they could extract from you?</p>
<p>In principle, basing cost to attend college on ability to pay seems noble. As the article shows, though, that practice has been a key factor in raising the cost of attendance for every income segment.</p>
<p>Even without looking at the article yet, I can tell you, it’s a broken system.</p>
<p>Interesting that the article highlights Penn State, a state-supported school, but not a state school in the traditional sense. The Pennsylvania state system includes schools such as Indiana University of Pennsylvania and Slippery Rock among others. </p>
<p>Penn State, Pitt, and Temple are all state supported and receive less and less from the state of Pennsylvanoa every year. The current governor of PA is not a friend of higher education.</p>
<p><quote>Colleges are the only major entity that can practice price discrimination with legal impunity. Imagine if your Toyota dealer could look at every detail of your income and assets, and then quote you a price based on what they thought they could extract from you?</quote></p>
<p>This is my go to analogy when inevitably the conversation turns to college financing. It is also disturbing how your primary home is included as an asset, as illiquid as it may be, so the university expects you to sell it or mortgage it. No FA department I have contacted has yet come up with a response to “what if a family can’t meet the cash flow needed to support the second mortgage or HELOC?”. They just smile and nod.</p>
<p>It’s a difficult situation that occurs with all kinds of government aid and with price discounting.</p>
<p>Most public schools give out horrible aid. Try again.</p>
<p>I’ve studied economics like this, and much of it has to do with government subsidization with grants and loans.</p>
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<p>Of course, using Penn State as the example is cherry-picking the state flagship with the worst need-based financial aid. Someone else could write a similar article about how the model works well for students from poor families by cherry-picking the state flagship in California, Michigan, or Washington as the example.</p>
<p>Reality is that the actual affordability of a state flagship for a student from a poor family varies a lot depending on state of residence.</p>
<p>Except that you can literally count on your fingers the public schools that give great need-based aid to students. Most barely, if at all, give above federal and state funding.</p>
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Uh, what’s left after that? Few public Us have a large endowment. That is also why the majority of states have some kind of tiered public U system in which the flagship tends to cost more than satellite campuses. There is availability for all but not really equality. That’s really true across the board. Someone who can get into Harvard will generally be able to get a full scholarship at their flagship U. Merit does come into it.</p>
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<p>According to the article, other people’s tuition dollars. However, if the schools don’t give out great need aid then the increased tuition isn’t going to aid.</p>
<p>In general, public colleges have not been raising tuition to generate funds for aid, they’ve been raising tuition to make up for state funding cuts. The philosophy that has failed public college students is the philosophy of voters and state legislatures, not the philosophy of the colleges themselves.</p>
<p>“Colleges are the only major entity that can practice price discrimination with legal impunity. Imagine if your Toyota dealer could look at every detail of your income and assets, and then quote you a price based on what they thought they could extract from you?”</p>
<p>Tons of businesses do this. Like airlines. Everyone sitting on the same plane has paid widely differing prices. The businessman that bought his ticket yesterday pays WAY more than the person who booked two months in advance, who pays WAY more than the person traveling on frequent flyer miles.</p>
<p>Like any other product or service, people need to shop around to find a place that is a good deal for them - in or out of state tuition, merit aid, need aid, commuting, going to community college first, etc. etc. etc. Penn State in State College is a flagship that, frankly, doesn’t make sense for many poor kids. Instead, go to a Penn State branch campus (with lower tuition) close to home and commute. That’s the sensible choice for you.</p>
<p>IMO, the smartest thing to do would be to stop sending all govt money to 4 year colleges. Then make 13th and 14th grade (at a CC or a tech school) free for everyone. That would be a huge upgrade for poor kids. Many of whom attend no post-HS education at all. And most who do, never obtain a 4 year degree. </p>
<p>The 4 year residential academic college experience has been massively overpriced and massively diluted by throwing money at it. Kids need more education for the future job market, but what they most often get at a 4 year college (the 5 year party) isn’t what they need.</p>
<p>P.S. UNC is a lot more affordable than Penn State because state funding to UNC is about 3X the state support Penn State (which is bordering on being a private school financially) gets.</p>
<p>@northwesty - Its not the fact that airline consumers pay different prices it is the method at which a price is arrived at. Airlines do not ask you for your income/net worth nor do they ask you to wait until they have received the financial details of all possible consumers until they give you price.</p>
<p>It is exactly the same between airlines and colleges. Economists call it “price discrimination.” </p>
<p>“Colleges thus have both the incentive and the information they need in order to price discriminate. Like airlines and hotels, many colleges would have a tough time staying in business if every customer paid the same average price. Its in the nature of a business with high average and low marginal cost.”</p>
<p>[The</a> Economics of Price Discrimination - Innovations - The Chronicle of Higher Education](<a href=“http://chronicle.com/blogs/innovations/the-economics-of-price-discrimination/30287]The”>Innovations: The Economics of Price Discrimination)</p>
<p>But with airlines, rich people can also get cheap flights; however, rich people cannot get financial aid. The fact the different people pay different prices is comparable, but not why they pay different prices.</p>
<p>The University of California and the JC feeder system used to virtually free for all California students who could qualify. Education was seen as a public good in the 1950’s, 60’s and 70’s, like the interstate highway system. </p>
<p>The UC system was the best public system in the world, totally affordable for any California resident. It was paid for by taxes (oh no … socialism!), mostly on the rich (during the 1950’s the top tax rate was 90+% … not exactly a slow decade for the economy, with an exploding middle class thanks in so small part to government programs like nearly free public higher education and the GI bill, no sign of rich people sitting on their cash or fleeing the country to invest elsewhere, etc.).</p>
<p>We could have that again (as many other countries do today). It’s only a matter of voters deciding what’s more important: maintaining extreme tax breaks for a few ultra-wealthy multimillionaire and billionaire citizens, or the opportunity of an good education to all the nation’s young people.</p>
<p>The University of California and the JC feeder system used to be virtually free for all California students who could qualify. Education was seen as a public good in the 1950’s, 60’s and 70’s, like the interstate highway system. It was part of “the commons,” owned by all Americans. In those days, not everything had to be for-profit.</p>
<p>The UC system was the best public system in the world, totally affordable for any California resident. It was paid for by taxes (oh no … socialism!), mostly on the rich (during the 1950’s the top tax rate was 90+% … not exactly a slow decade for the economy, with an exploding middle class thanks in so small part to government programs like nearly free public higher education and the GI bill, no sign of rich people sitting on their cash or fleeing the country to invest elsewhere, etc.).</p>
<p>We could have that again (as many other countries do today). It’s only a matter of voters deciding what’s more important: maintaining extreme tax breaks for a few ultra-wealthy multimillionaire and billionaire citizens, or the opportunity of an good education to all the nation’s young people with all the attending economic and social advantages that brings to the entire country.</p>