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[quote=mammall, in another thread]
Even if admitted, should families who are prosperous enough to come up with the $$$ to send their kids to elite schools, even if that means substantially reducing the family's wealth (retirement, home equity, etc.)?
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<p>Getting admitted in the first place is the primary concern of the other thread, and mammall suggested that her question should start a new thread, a suggestion I agree with. For parents who are curious about the economic value of a college at which they might have to pay close to list price, when other colleges offer "merit scholarships" reducing list price to zero, I suggest an article by two economists who have studied how families make decisions about financial aid offers. </p>
<p>It appears that many parents make economically irrational decisions about which financial aid offers to accept when their children are admitted to more than one college. For example, most families value grants and loans equally when deciding which college to enroll at, which is crazy. Moreover, most families don't take a close look at spending per student at each college to see which college offers hidden value beyond list price. There is more in that article, which makes for thought-provoking reading. </p>
<p>For a general introduction to financial aid principles and terminology, see </p>
<p>A friend and I were JUST TALKING about purchasing decisions today. He was a car salesman, and a very good (6 figures) one at that. The biggest mistake, in his opinion, that people make is getting emotionally wrapped up in a purchasing decision- ANY purchasing decision- whether it's a car, or a college education. The glam and the glitz takes over and it becomes emotional rather than rational. That's when people lose themselves, and their wallet. </p>
<p>It doesn't have anything to do with quality- it's just the way people get so enraptured with a product, that they are willing to do almost anything rather than turn their back on it.</p>
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[quote]
For example, most families value grants and loans equally
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In my mind loans are not financial aid. Perhaps, access to loans may be considered financial aid, but money to be repaid is not financial aid any more than a mortgage is financial aid. A loan may enable a person to secure an appreciating asset, and that's a good thing. It may be wise to take advantage of loans. But loans are not financial aid.</p>
<p>which I learned about through yet another economist, whose helpful posts on email lists about homeschooling have advised me for years, details some ways in which colleges can tailor financial aid offers to meet goals of the colleges.</p>
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[quote]
Moreover, most families don't take a close look at spending per student at each college to see which college offers hidden value beyond list price
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<p>Where can one access the spending per student at colleges?</p>
<p>collects and displays data gathered by the federal government as part of the Department of Education Integrated Postsecondary Education Data System (IPEDS). You can display spending per student for most any college you can search up (it shows as part of a comparison table on the second page of results for any college), e.g., </p>
<p>There are, of course, some debatable issues about how the dollars per student are counted. (One parent here on CC commented that a college with a medical school will tend to have higher spending per student by the federal method, even though most of the students on campus aren't medical students, for instance, but I haven't checked the validity of this objection to the figures.) And of course it is possible for dollars to be misspent, and not add value to the college experience for a particular learner. But this is one of several issues it would be a good idea to look at before deciding which financial aid offer to accept: if your child can get a college experience funded to the tune of $60,000 per year for a list price of only $45,000, how different is that from getting funding of $15,000 per year for a list price of zero? Which offers the overall better deal?</p>
<p>Thanks for the links. Digging deeper into the Maguire Associates site I found link to a client's site that had a rather interesting powerpoint presentation given to FA administrators. It is for a council of Christian colleges, but I suspect the information would differ little for most private colleges. College FA is run in a very business-like way and very little is left to chance. The FA people have very good number and know how to maximize the value of their financial resources to fill the seats in their institutions. The breadth and depths of the presentation was an eye opener to me. Little seems to be left to chance. There are numbers for everything.</p>
<p>For this particular group of 66 schools, the average FA package included $7300 in grant/gift, $4900 in loan, and $460 in work. Of particular interest was a slide labeled, "Sources of Pressure to Adjust FA Packages". 8 different sources were identified (in order, most often to least often): family, admissions, performing areas, athletics, academics, president, alumni and church. For need-based aid, the most successful appeals were in response to documented unusual circumstances. Approvals rates were shown for 15 different unusual circumstances with wedding expenses being almost never approved, and 4 circumstances that most institutions approves: Reduced parent income, high medical expenses, reduced student income, and private K12 school expenses for siblings. For merit-based aid the most common reason for granting more aid was new data, e.g. test scores. However, documentation makes a big difference in the likelihood of getting more aid.</p>
<p>Some other interesting slides mention:
* Only about 10% of the institutions revised aid packages to match competing offers.
* Adjusted aid packages had a somewhat positive effect on enrollment. i.e., it improved yield.
* The most widely used FA software was PowerFAIDS. (<a href="http://www.powerfaids.org%5B/url%5D">www.powerfaids.org</a>) This software has some sort of tie in with collegeboard, but I haven't had time to check it out. It is quite sophisticated. Among its features: "Automates computation of Federal Methodology and Institutional Methodology need analysis including on-demand recalculations."</p>
<p>Thanks for the detailed discussion of what you can learn from the Maguire Associates site. Yeah, I would have guessed that appealing for more financial aid because of high wedding expenses would be a nonstarter, so it's amazing that someone has tried that appeal more than once.</p>
<p>Depends on the degree to which "spending per student" rewards inefficiency, and is the result of insufficient size to bring forth both breadth and depth of the academic experience. </p>
<p>Language departments are a very good example where you can see it very clearly, because there is not an overwhelming investment in capital infrastructure. There is an actual example of two LACs with which I am well familiar. A department that has two professors and 3 students majoring is spending twice as much per student than a department with 6 professors and 18 majors. But the education received by the student in the second case is likely much better than the first. There will be more curricula choices, more advanced offerings, better advising, more likelihood of contributing to a professor's research, more experiences to draw upon in thinking about career options and graduate schools, more information about study abroad, more language tables, more peer support, and more cultural activities.</p>
<p>It's not a matter of "misspending". So if you did the calculation you suggested, you might think you are ending up with the better deal, but in actual fact a significantly poorer education, and likely a poorer outcome.</p>
<p>Oh, yes, you should always look at the specific situation when deciding which college offers the better deal. One widely reported example in news stories over the last few years has been some kid who won a major national third-party scholarship (Coca Cola, Toyota, or whatever it was) and ended up at an honors program at a striving public university. He says in press interviews, "I could never have the opportunities I've had here to do research with professors if I had gone to Harvard." Oh, really? I think that would depend more than a little on how much initiative he showed at Harvard--Harvard certainly is only one of many research universities with opportunities and funding for undergraduate research. Study abroad opportunities or opportunities to meet classmates who are native speakers of a particular language might be of more interest to someone like me who pursues a foreign language major, but that is indeed something that should be checked on a case-by-case basis.</p>
<p>"He says in press interviews, "I could never have the opportunities I've had here to do research with professors if I had gone to Harvard." Oh, really? I think that would depend more than a little on how much initiative he showed at Harvard--Harvard certainly is only one of many research universities with opportunities and funding for undergraduate research."</p>
<p>Well, put it another way: the same student who is a top science student at public u. will be fawned upon, receive the best research opportunities, win competitive internships within her university, and receive topnotch mentoring. That same student might be bottom half of the class at prestige private. Will those same opportunities be there? Given that at prestige private with a grad school attached the plums are still going to the grad students, and the professors get paid based on results, I highly doubt it. Another example where spending per student might actually work against quality of outcome.</p>
<p>Then if you add in "opportunity cost" represented by the differences in cost between the two, and it might be that it really isn't even close.</p>
<p>I think I understand why that student made that argument, and why you are making that argument, but I would simply reply that that takes just as much individualized inquiry as the individual inquiry you suggested about language departments. (The difference between language departments at two LACs that you noted is surely relevant, but it would probably be obscured by general statistics that aggregate data about a whole college.) It may be that the "topnotch mentoring" in one college still hardly meets the standard of the ordinary undergraduate experience in the other college--the way to know, I would say in agreement with your first post in this thread, is to look at each college.</p>
<p>Perhaps. It is true you have to look at the individual college, and kick the tires. My d. is a humanities student. One of the reasons she chose her college, and NOT any of the Ivies or other LACS was because it was the only one that guaranteed her a paid research assistantship in the humanities in the first two years. We found NO Ivy (nor Chicago nor Hopkins, etc.) that said they offered ANY research opportunities in the humanities in the first two years (paid or otherwise), and, in fact, other than in thesis research, found very, very few that offered paid research assistantships in the humanities at any time. The research assistantship then paid off in travel fellowship to do independent research in Italian libraries in Umbria last spring, and then to a paid research fellowship for this summer and her senior year. It has set her up very well for graduate school. </p>
<p>So, yes, individual inquiry. Kick the tires. Make no assumptions based on rankings. Or on spending per student. The question that always needs addressing is the "value-added".</p>
<p>"The difference between language departments at two LACs that you noted is surely relevant, but it would probably be obscured by general statistics that aggregate data about a whole college.)"</p>
<p>It certainly wouldn't if you started to count the number of Fulbrights.</p>