How fast did cost increase at highly selective schools

Parents Forum
1

<p>Furthering my habit of bringing trivial -and somewhat meaningless- statistics to the board, I offer a quick look at the recent changes in cost at a few schools, and changes in the past two decades in the case of Harvard. </p>

<p>The numbers are for the total costs in 2004, in 2005, the percent of change, and finally the nominal change from 2004 to 2005: </p>

<p>Brown $37,942 $39,808 4.9% $1,866
Columbia $38,590 $40,538 5.0% $1,948
Chicago $38,403 $40,353 5.1% $1,950
Cornell $38,334 $40,100 4.6% $1,766
Dartmouth $37,770 $39,465 4.5% $1,695
Harvard $37,928 $39,880 5.1% $1,952
MIT $38,310 $39,900 4.2% $1,590
Penn $38,132 $39,818 4.4% $1,686
Princeton $37,149 $38,882 4.7% $1,733
Stanford $37,905 $39,603 4.5% $1,698
Yale $37,000 $38,850 5.0% $1,850</p>

<p>Following those sobering numbers, here's a look at the increase in the past 20 years at Harvard.</p>

<p>The numbers show tuition only followed by total costs: </p>

<p>1985 9,500 14,100
1986 10,266 15,100
1987 11,040 16,145
1988 11,645 17,100
1989 12,310 18,210
1990 13,085 19,395
1991 13,960 20,655
1992 14,860 22,080
1993 15,870 23,514
1994 16,856 24,880
1995 17,851 26,230
1996 18,838 27,575
1997 19,770 28,896
1998 20,600 30,080
1999 21,342 31,132
2000 22,054 32,164
2001 22,694 33,110
2002 23,457 34,269
2003 24,630 35,950
2004 26,066 37,928
2005 27,448 39,880</p>

2

<p>Numbers are numbers. Before you bemoan this state of affairs, note that Harvard's tuition (not to single them out) rose 289% between 1985 and 2005. HOWEVER, the median income of those in the top 5% of the U.S. population (which makes up the majority of H.'s student body), rose from $98,946 in 1985 to $310,000 in 2005, a 313% increase. And while I don't have the numbers, I am willing to wager that their assets rose much faster than that!</p>

<p>In other words, Harvard (and virtually all the prestige privates) are actually CHEAPER (as a proportion of income/assets) today for the majority of students attending than they were in 1985. But, because those income/asset gains are not shared by those below the top 5% (or, if shared, shared very inequally), these schools are, on the whole, signficantly less economically diverse than they were in 1985.</p>

<p>Most of the moaning and groaning is from parents who weren't able to attend in 1985 and now find no change - their kids can't attend either.</p>

3

<p>I ain't moaning ...</p>

<p>Here's a bit of additional comparative data:</p>

<p>Next to the total costs, I added figures for the Median Family Income (Ages 45-54), and the Disposable Personal Income. </p>

<p>1985 14,100 34,482 12,319
1986 15,100 36,653 13,037
1987 16,145 38,861 13,649
1988 17,100 41,413 14,241
1989 18,210 42,192 15,297
1990 19,395 46,101 16,257
1991 20,655 47,164 17,131
1992 22,080 49,606 17,609
1993 23,514 50,079 18,494
1994 24,880 52,034 18,872
1995 26,230 54,379 19,555
1996 27,575 55,029 20,287
1997 28,896 57,161 21,091
1998 30,080 59,959 21,940
1999 31,132 61,833 23,161
2000 32,164 65,303 23,968
2001 33,110 68,082 25,472
2002 34,269 68,114 26,236
2003 35,950 69,180 27,159
2004 37,928 70,149 28,034
2005 39,880 71,973 29,334 </p>

<p>SOURCE FOR INCOME DADA: BUREAU OF LABOR STATISTICS, BUREAU OF ECONOMIC ANALYSIS AND ECONOMIC INDICATORS PUBLICATION.</p>

4

<p>Mini, aren't those mean averages, not median averages?</p>

5

<p>Yes, mean. sorry.</p>

<p>But the "meaning" (in the larger social sense) remains the same. (Remember - by definition, they are in the top 5% of the distribution.) Those in the top 5% (which make up about 50% of all attending students, give or take, depending on the school) are as well or better able to afford the $30k tuition than they were in 1985. Those in the middle ($44k-$67k) fall further and further behind. The other thing that has happened is that a higher proportion of those in the top 5% at these schools are now receiving need-based aid.</p>

<p>In the accepted applicant profile at CMC (for example, and if I've read this right), the largest number by far within the income classes of those receiving need-based aid earned more than $150k. I think you'd find this even more extreme at most of the Ivies and east coast LACs.</p>

<p><a href="http://www.claremontmckenna.edu/admission/finanaid/package_aid.asp%5B/url%5D"&gt;http://www.claremontmckenna.edu/admission/finanaid/package_aid.asp&lt;/a&gt;&lt;/p>

6

<p>It's not the same to me. :)</p>

7

<p>I'd also bet (though I don't have the data handy) that taxes are now lower for the top 5% than they were in 1985.</p>

<p>In other words, the numbers are NOT sobering for the majority of students and families of those who actually attend. But if you are not a top 5%er, all bets are off.</p>

8

<p>Xiggi: </p>

<p>I think I may be wrong in my assumptions. But is it possible that colleges raised tuition to cover following expanses: </p>

<ol>
<li><p>Support kid like mine who are on full need based financial aid. These kids have stats but no $$$$$ thus other full paying student cover there expanses. Both part benefits. Kids who pays full freight get to meet some intelligent kid with no $$$$$. Kids like mine who were on national math and science ranking finds that to heck with math/science, they love humanities as it is more complex and now understand the benefit of liberal education. This is a nirvana for them.</p></li>
<li><p>My kid met some of his best friends from all over world, and his closets friends from downtown NY and Chicago. The bonding is great and maybe lifelong. An Asian kid and an afro American kid calling each other cousin. Why because both are on financial aid and both work their butt off to get where they are. They respect the others view but love each other as they know they are so similar in life story. </p></li>
<li><p>Not to brag, kids like him are now in prep school information flyers and packages and they are being used to attract many more kids who may not have heard about prep schools or colleges. This has allowed prep schools to bring more gifted yet poor kids. Thus schools and colleges need goes up thus they raise more tuition on top of inflation. This melting pot would have not been possible without meeting financial needs.</p></li>
<li><p>To attract better student, colleges builds super structures and facilities that require $$$$$$ to provide comfort, thus they raise tuition.</p></li>
<li><p>This makes these prep schools and elite colleges even more selective and thus everyone wants to go. Thus the colleges can increase prices at yet remain attractive.</p></li>
</ol>

9

<p>"In the accepted applicant profile at CMC (for example, and if I've read this right), the largest number by far within the income classes of those receiving need-based aid earned more than $150k."</p>

<p>Yes, but don't you know that all those earning more than $150,000 were families with an average of 7 kids? For example, here's a profile of the White family from Anaheim:</p>

<p>Mom: Mrs. White
Dad: Unknown<br>
Children: Doc (attends CMC); others: Dopey, Sleepy, Grumpy, Sneezy, Happy, Bashful</p>

<p>PS Hey, it's vacation time - can't be serious 24/7. :)</p>

10

<p>Yup. It's how they chose to spend their money! And now all 7 can get financial aid from CMC (which ones are your classmates? ;))</p>

11

<p>Mini:</p>

<p>How could a family which earns a gross below income of $60,000 could afford to spend tuition of $45,000 for a kid?</p>

<p>Do you think it is okay to define only need based aid for below $45,000? Where do you draw the line? How about $30,000 for a family of four?</p>

<p>I would love to have Dopey, Sleepy, Grumpy, Sneezy, Happy, Bashful, and the seventh one as kids. But then femininist will call me sexist? So I need a duahgter too? :) And yes I need her for someone to visit in nursing home as boys would be absent later in life :)</p>

12

<p>Well, we know that the colleges define it as around $160k, and I'm okay with that, and the prestige colleges make sure that half their student bodies don't get it, and that's okay with me, too. </p>

<p>But I call it as I see it - these schools have made a decision that it is okay to be less economically diverse than 20 years ago, even if they like to talk a good game. It's the talking that I find insulting to our intelligence, not their actual policies. Kids who couldn't afford to go in 1985 are, on balance even less likely to be able to send their kids today - and I don't see anything wrong with that particularly either. It just is what it is.</p>

<p>And WHAT is it?</p>

<p>"It's a brilliantly analytical process of screwing the poor kids," Gordon Winston, a Williams College economist, is quoted as saying."</p>

13

<p>FYI:</p>

<p>The mean and the median can be VERY different if the distribution within a particular range is skewed. And with the top bracket of income, it is VERY skewed. So mean (average) income is a misleading number. So, even within that group....</p>

<p>Actually, the real story w/r/t income is what has happened in the top 1% and fractions above that. Their increases have been huge. You go below that, and the changes become less dramatic. The Financial Times had an interesting editorial on this a few weeks ago. Too bad I can't find the link.</p>

<p>Also note that, in 2004, the top 5% began at $157,176. Given the percentage of H students on financial aid, I think it fair to assume most of their students are below this level?</p>

14

<p>"Also note that, in 2004, the top 5% began at $157,176. Given the percentage of H students on financial aid, I think it fair to assume most of their students are below this level?"</p>

<p>Yes. Probably 5-10% above (same at other schools). But if you add that to those who receive no financial aid, it likely means 55% are top 5%ers, and 45% come from the unwashed masses. And the new no-loan policies (such as those at Princeton) will exacerbate those trends. While it will look like a higher percentage of students are receiving need-based aid, the student mix will actually grow richer (unless there are efforts at the bottom of the foodchain.)</p>

<p>"Actually, the real story w/r/t income is what has happened in the top 1% and fractions above that. Their increases have been huge. You go below that, and the changes become less dramatic."</p>

<p>In reality, that's a half-truth. Bottom of the top 5% income class grew from $69.5k in 1984 to $157.5k in 2004, ONLY a 227% gain, not quite fast enough to keep up with Harvard tuition. BUT their assets grew at a much faster rate. Colleges don't expect families to pay for current tuition out of income, but out of past savings (assets) or future savings (in the form of loans, in discounted dollars, and when income is even higher.) It is no wonder then that these schools are less economically diverse than 20 years ago. Virtually none of the above is true for some one at the median income, or even for those in the upper middle quintile ($67k-92k.) What has changed are their aspirations - everyone thinks their kids should be able to go to Ivies and etc., and that they should be able to afford it.</p>

15

<p>From 1971 through 2002, the University of Texas tuition plus fees for 15 semester hours had increased 931%. <a href="http://www.utwatch.org/tuition/tuitionstudy.pdf%5B/url%5D"&gt;http://www.utwatch.org/tuition/tuitionstudy.pdf&lt;/a>
Add to that 14% in 2004 and 9.6% in 2006. I can't quickly find the other years. Makes Harvard look pretty reasonable.</p>

16

<p>mini,</p>

<p>I agree that the elite are becoming even more elite. There are so few lower SES kids at these schools, especially low income students, that their cost for these "no loan" programs is rather trivial - mostly a PR move.</p>

<p>But, I stil cannot buy your assertion that Harvard is actually cheaper for the top 5%. Some, perhaps. But not all.</p>

<p>And, keep in mind that you CAN't conclude that, if the top 5% had assets, on average, increase by X%, and had income increase by Y%, that every subgroup went up by the same percentages. Most importanty, you noted that the income of the bottom of the top 5% (ah, this gets difficult in words!) did not inflate as fast as H costs, but said assets made up for it. I have not seen such finely tuned data. Can you give a source? Does your asset definition include home equity, which for some is a rather illusory asset? (you can't take advantage of it until you move to cheaper digs!)</p>

17

<p>I am looking for asset data. There is plenty in the book Class Matters by my friend Betsy Leondar-Wright, but it provides that data by quintile, rather than by the top 5% (though even there, the upper quintile grew much, much more rapidly than everyone else.)</p>

<p>"Can you give a source? Does your asset definition include home equity, which for some is a rather illusory asset?"</p>

<p>Why, sure would! You can borrow against it, and usually at a much, much lower rate than you can get in the loan market. Colleges expect you to pay out of both present and future assets, and the future assets can be liquified in mortgages. </p>

<p>What really can't be argued is that the differential between the top 5%ers and everyone else continues to get wider (as per Xiggi's data.)</p>

18

<p>xiggi:</p>

<p>to be fair, also need to add the CPI % change over time -- </p>

<p>is CMC - Carnegie Mellon College --hahahahaha</p>

19

<p>mini, OK. In aggregate, the top quintile is doing better. But, again, this is distorted by the phenomenal success of the very top portion of that quintile. And this holds true for every slice of the data that includes the very top fraction. That's the limitation of aggregated data. </p>

<p>To buy your point, we would need to see the data for the cut from, for example, the top 95 to the top 99 %, less the portion above 99%. I think you might be surprised at the result.</p>

<p>FYI, most of the work on income inequality etc. has been done comparing quintiles because the feds (commerce and census) report that way. Finding the data for finer cuts is tough, and I could not find it in a quick search this PM.</p>

<p>So, IMHO, your comment "What really can't be argued is that the differential between the top 5%ers and everyone else continues to get wider" is true on the face of it, but ** misses the real story. **</p>

20

<p>I can't see why. We know precisely where the "bottom of the top 5% was in 1984, and precisely where it is in 2004. We don't have to know anything about anyone above that. (although of course the top 3% have gotten more spectacularly wealthier.) We won't be able to get precise asset reads for those exactly at the bottom of the top 5%, but can guess (and it is an educated guess), that they did better than other folks, if only because they could afford higher mortgages (forced asset savings), or, even more obviously than that, that they are more likely to own homes at all!</p>