Is $70,000 per year for an undergraduate degree worth it?

@Data10

Right…if you are in the 5% or so of accepted students at Harvard. First hurdle there…getting accepted. Not a slam dunk.

That is an individual family decision. Every family may have different values and different financial circumstances. For instance, I will retire with a pension, and we have family coverage for health insurance.

One standard my son used in picking private colleges was whether he thought they would provide both a better fit and academically stronger peers than our state’s strongest public university. Sometimes when my spouse would suggest looking at a possible private safety college, our son would say, “Why would I apply there? [Public University] is better. And less expensive.”

But that left at least 16 colleges he almost definitely would have chosen above the public one, and almost all of them almost certainly would have been full pay… because all but a couple of them give aid only to financially needy students (need) as opposed to wealthy high achievers (merit). And I think that is fair and just.

We are happy to pay for him to attend his top choice, where he got in early decision. We will need to use our home equity line of credit if he goes to a type of graduate school that charges tuition, and maybe we will apply for aid later in his undergrad career when we may qualify because our savings will be diminished.

We are right on the cusp of qualifying for aid now, as per the NPC’s, but we did not even try to apply this year because some of his schools, like Skidmore and like Wesleyan for the last 10% of applicants, are need aware. We did not want to hurt his chances of admission for what probably would have ended up being a very small amount of aid, if anything at all.

My son is filling out applications for merit-based and essay-based scholarships through private organizations, however, so hopefully he will win some of them!

All our lives, we knew that our biggest expense would be our son’s college education. We were saving for it and making financial decisions with it in mind since before he was born. So, an enthusiastic yes to the OP’s question! We think it is more “worth it” than anything else on which we could spend our money.

@thumper1 When I said “low interest subsidized loan” I did not mean the direct “subsidized federally funded loans” that you were referring to here. Both the public and private student loans carry implicit government guarantee, which has an effect of encouraging lenders making more loans available and students and families taking on more loans at a lower(subsidized) rate. One of the consequences of such well intentioned government initiative is that college grads are saddled with an average of $40k in debt and with quite often a very low value college degree. Is there a link between rising student debt to the average of $40k/per student vs rising tuition to $50/yr ($70 w rb)? I think there is.

These loans are NOT subsidized. Subsidized means that no interest accrues while the student is in college.

You are muddying the waters using that term the way you are.

Private student loans do NOT have the same protections, loan repayment provisions, or forgiveness programs as federally funded loans. That’s important to remember as well.

Depends on family finances. Unlike me, son had no financial considerations. However, any expensive school needed to be at least as good as our top tier flagship to be worth it. I quietly did not encourage him to apply for scholarships- except for the prestige of being a NMS (but without listing our flagship as his number one choice). We are firm believers in what something is worth, not just can we afford it.

For the few families for whom the money spent will not affect their lifestyle at all it is great that they help subsidize others by paying all costs.

btw- NOT in business, whose job it is to make money (for self and/or others). We certainly earned our money- given the time and effort spent by physicians the hourly wage isn’t what it may seem… So many hours giving up time and studying…

@data10 Yes going to an Ivy can be less expensive than a state school. Your numbers are a little off but the cost is still great for those salaries. Crossing our fingers my son gets into an Ivy or a selective school that covers demonstrated need. Some add in loans but they are not any more than $5,000 a year.

@thegreyking some schools are need-blind in the application process

I guess if there is no financial aid and/or merit available to lower the sticker price, my question is at what point are families going to sayenough? The rising price of college is just getting so excessive. I feel that it is just seems to be overpaying for a product. What will happen in a few years when the sticker price is $80,000 or more?

@TheGreyKing You should have applied for the aid. Schools that look at it for students on the cusp aren’t likely to be deterred from admitting a student whose is only eligible for a small amount of aid. It is someone who needs a lot of aid who is more likely to lose out in that situation.

Plus, you can apply for aid at just some schools. For D2, we applied at the schools where we weren’t sure she would get merit, but didn’t bother at the likely merit schools where it would be more than need we’d be eligible for. Kid got about $13K/year in need based aid at her top 2 choices, nothing at the next two, and significant merit at the rest. After a couple years we became full pay at her top choice because my business improved, but that was not unexpected.

I’d just encourage those whose NPCs show aid to apply for it.

The numbers are directly from the NPC, but specific FA will differ from family to family due to variations in assets, kids in college, persons per family, etc.

The colleges charging $70k per year tend to be the ones that are more selective with excellent FA, like Harvard. For example, looking up he 2016-17 total cost as listed in IPEDs, the most expensive 4-year college was Colburn, which has a single digit acceptance rate, as low as Harvard in some years. The college is free for the few who get admitted, so families aren’t breaking the bank to afford it. The next most expensive was Chicago, which is a highly ranked college that has single digit acceptance rate college and meets full need, like Harvard. IPEDS mentions than 92% of Chicago students do not take loans, so again I expect most families are able to afford it without breaking the bank due to generous FA. It’s a similar pattern for the other $70k+ colleges. IPEDS only lists one traditional 4-year college that costs more than $70k and does not meet this pattern – Drexel. I’m not especially familiar with Drexel, but I see that their website mentions 99.7% of students receive FA and an extremely high percentage of students do paid co-ops (as high as 98% in some schools), so it sounds like it has a unique financial model that makes it affordable.

The colleges that families struggle to afford with high average loan per student tend to have a different financial model with less FA and a lower sticker price. More explicitly, highly selective, top USNWR type private colleges tend to have a disproportionately large portion of kids coming from wealthy families, so they can use a sliding scale type net cost where wealthy families pay some extremely high cost like $70k/year, and typical lower/middle income families pay more reasonable costs, that are often lower than state college and community college alternatives. The high sticker price for wealthy families can cover the bulk of the reduced cost for lower/middle income families, while the college gets to report that it is spending a lager percentage of its huge endowment, appeasing legislatures. This model doesn’t work for colleges that don’t have a large portion of students from wealthy families. Instead they are forced to use a more traditional model with a lower sticker price, but less extreme FA, resulting in increased cost compared to HYPSM for typical lower/middle income families and a larger portion of students taking loans.

$149k as “typical lower or middle income” is stretching it quite a bit, as it is around the 86th percentile household income in the US (probably somewhat lower, but still quite high, percentile for families with high school or college age kids). Of course, these forums are heavily populated by the “middle class that does not get financial aid” (i.e. $270k or higher, but not plutocrat level), so some may see $149k as “lower income”.

There are a few with list prices around $70k, but poor financial aid. The usual well known examples on these forums are BU and NYU.

That hypothetical borders on a straw man argument. The fact is that financial aid and/or merit aid is available at nearly every private college (that I’m aware of). Assuming it ain’t so is mental gymnastics.

True, but both do offer some (limited?) merit aid.

But more importantly, NYU probably proves the point that $70k is almost a meaningless threshold, as there are thousands of top 5%'ers who would readily pay sticker for Johny or Suzie to attend their ‘dream’ school in The Village.

“I guess if there is no financial aid and/or merit available to lower the sticker price, my question is at what point are families going to sayenough?”

Lots of upper-middle/upper-class people in the US/world. The top American privates have limited the percentage of Internationals so far to around 15%, but they don’t have to. Some privates and publics below the top have greater percentages of Internationals.

Oxford is now 40% International (slightly over 1/3 International in undergrad; a little under 1/4 non-EU) and nobody accuses them of not being English enough.

“The rising price of college is just getting so excessive. I feel that it is just seems to be overpaying for a product.”

Fair in many cases, but nobody is forced to pay.

“What will happen in a few years when the sticker price is $80,000 or more?”

At the top, you will see more and more applications and they will be harder and harder to get in to.
As you go towards the bottom, you will see list prices go up still but more and deeper discounting as well.

Basically, there is no incentive for colleges to not practice price discrimination.

“I guess if there is no financial aid and/or merit available to lower the sticker price”

@bluebayou:
“That hypothetical borders on a straw man argument.”

Well, that depends on the family. To some families, there are certainly schools out there where no fin aid or merit money is available tothem_.

Maybe no one needs to spend 70k for an education, but a lot of people can and want to, and do. Personally, it is totally worth it.

$72,000 per year is roughly twice the amount we paid for each of our kids: $32K/year. Inflation-adjusted we paid $47K/year, i.e., $47K/year in 2018 dollars.

$72K is 53% more than we paid for our kids on an inflation adjusted basis.

Could we do it? We got some support from the kids’ grandparents. They might have given more if the costs were higher. But for certain we would have saved more when the kids were younger.

The answer is: Yes.

is my dad buying a new porsche because he’s bored of his 2016 model (he barely drives) worth it? is my mom buying all sorts of obscenely expensive kitchen appliances buy never cooking worth it? my grandpa says a good education is always worth it. its funny to see people making fun of NYU, currently like #30 on US news? if NYU is a ripoff what do you consider the local diploma mill U where parents pay $20,000 a year x6 for billy to buy his “general studies” degree??

Your post doesn’t even make sense. What are you trying to say?

Sure, but if they can’t afford $70k, they most likely can’t afford $65k either. So, they’ve already hit the limit of “enough”. And worrying about the sticker price of a private is a waste of time, when all they can afford is a private with merit/need-based aid or the instate public.

I just don’t get the gripe.

There are lots of houses for sale at what I think are ridiculously high prices. Do I think they are worth it? No, but hey, if I want one, I have to pay the price. Is the public supposed to say they’ve had enough and stop buying houses? Would that somehow cause home prices to drop? College tuition is only different in that there are ways to get an generally equivalent product at a vastly reduced cost.