MIT acknowledges its finaid policies caused more middle class kids to go elsewhere

Colleges and Universities A-Z Massachusetts Institute of Technology
1

<p>MIT admits to a middle class finaid problem, doesnt offer any improvements and actually makes matters worse by RAISING tuition 3.8% (and room and board and fees) despite only negligible inflation:</p>

<p>"Last year, MIT announced that families making less than $75,000 each year would not be required to pay tuition. That helped spur an increase in the percentage of admitted students from lower income families who decided to enroll at MIT. However, Clay felt there was room for improvement for students from families making between $100,000 and $200,000. 'We lost ground with students from families making greater than $100,000, but less than $200,000,' said Clay."</p>

<p>Tuition</a> Increase is Lowest in 8 Yrs, High Relative to Inflation - The Tech</p>

2

<p>When I first heard of this new tuition policy last year, I knew it would be bad for my daughter. More people would apply, and since we are just in that +100,000 bracket, it wouldn't help us at all.</p>

<p>It's still her #1 choice (she's a junior), but tuition is a killer.</p>

3

<p>Okay, first of all, unless perhaps you live someplace like Manhattan or Silicon Valley, the middle class does not start with salaries of $100K. Or $75K, for that matter. According to the census, in 2005 (so, adjust up a little for inflation to get current numbers), the median household income in the US, the middle of the middle class, was $46,326. While I feel for the corner cases and the people who live in high-cost-of-living areas and thus are being treated as richer than they are, those finaid policies <em>benefit</em> much of the middle class. Unless you think that the large majority of the US population counts as "poor".</p>

<p>I realize that people in the 100K-200K income bracket can't generally afford to pay MIT tuition out of pocket either, and I am not making my point in order to trivialize <em>their</em> situation, but I get really annoyed when people act like the finaid policies only benefit a small fraction of poor people and completely ignore the middle class.</p>

<p>Second of all:</p>

<p>
[quote]
MIT admits to a middle class finaid problem...

[/quote]
</p>

<p>No, it does not, according to that article. It admits to a problem for families making $100K-$200K. While this is, in fact, a problem, it is a problem for a small portion of the middle class (according to the same census data, 80% of US households had incomes of $91,705 or less in 2005), not the middle class in general.</p>

<p>Finally:</p>

<p>
[quote]
...doesnt offer any improvements and actually makes matters worse by RAISING tuition 3.8% (and room and board and fees) despite only negligible inflation

[/quote]
</p>

<p>MIT, like everyone else, got hit by the economic downturn (see the next article in the same Tech issue), and is currently trying to make up the money. There may be negligible inflation, but they still have to find ways to take in more money. Now, as it happens, I don't agree with their having done it this way except as a last resort - I can think of some that I would have preferred they start with. But it's not like they raised tuition because they thought it would be fun to screw over more families. And it's not like they are sitting there rolling in piles of cash while they screw over families - the higher-income portion of the faculty and staff are on salary freeze and MIT is cutting its operating budget.</p>

<p>I do not deny that there are problems with finaid, and that people get screwed over by the system. But I think that the OP characterizes the situation inaccurately and unfairly, for the reasons that I have stated.</p>

4

<p>And I "get really annoyed" when people who likely benefit from the existing system and do not know what it is like to actually Pay $52,000 per year (much less know what it is like to actually earn that amount), let loose with immature, emotional rants, rooted in social class prejudices, on things they know nothing about. You like to dish it out, so let's see how well you can take it.</p>

<p>MIT has acknowledged that their existing finaid policies are skewing the demographic of admitted students away from 100k - 200k incomes (which the Obama administration defines as middle class) and toward under 75k incomes. That was a predictable outcome. MIT also acknowledges that they need to do more for the 100k to 200k incomes, but instead announce an increase in tuition, which will only serve to exacerbate the problem. Those are the "facts." And, they are not in dispute.</p>

5

<p>My D has two friends who were accepted at MIT last year. Both are taking out loans to pay for MIT due to lack of financial aid. For one student her dad is an electrician and her mother did childcare in her house although I think she is now unemployed. The other student has a single mom who is a nurse and was working two or three jobs. Unfortunately I don't know their exact incomes but I'm guessing they must have been near the dividing line. I was surprised they didn't get aid. Both students are majoring in engineering so they feel the loans will be worth it when they get high-paying jobs upon graduation. Hopefully for their sake this part will come true.</p>

6

<p>
[quote]
100k - 200k incomes (which the Obama administration defines as middle class)

[/quote]
</p>

<p>Do you have a cite for that assertion? "The current presidential administration considers X to be the range of incomes that make up the US middle class" seems like a reasonable definition to use, but I haven't been able to find what the official position of the Obama administration on this is.</p>

<p>Looking at 2005</a> US Income Distribution at Visualizing Economics it seems to me that an income of $200k put a family at around the 96th or 97th percentile of household income in 2005.</p>

7

<p>Hmm. Okay Mia, let me address some of your points.</p>

<p>
[quote]
And I "get really annoyed" when people who likely benefit from the existing system and do not know what it is like to actually Pay $52,000 per year (much less know what it is like to actually earn that amount), let loose with immature, emotional rants, rooted in social class prejudices, on things they know nothing about.

[/quote]
</p>

<p>Actually, I had no finaid while I was at MIT - I was definitely not a beneficiary of the system. While I was growing up and through my undergrad years, my family's income at different periods of my life ranged from under $40K to over $250K, covering most of the ground between, but we were upper-middle class for most of the time - I consider myself to have grown up economically privileged, and am grateful that my parents were able to provide for us in such a fashion. I'm a working adult, and my salary is in the range between $50K and $100K (it seems kind of inappropriate to give an exact number). In this area, which is pretty high-cost-of-living, I consider it middle-to-upper-middle-class, though I live below my means because I'm young and want to save for the future.</p>

<p>I certainly don't have anything against families with incomes in the $100K-$200K range - how could I, when I was part of one for a long time? And I would like to see them get more finaid at MIT (when I was doing student government stuff, I pushed for more finaid in general, not restricted to any economic class). My point was only that compared to the fraction of the middle class that is being helped by the current policy, the fraction that is losing out is relatively small, so it doesn't make sense to me to say or imply that MIT is screwing the middle class in general.</p>

<p>I'm rather confused at the idea that I don't know what it's like to earn $52K per year - are you saying that I wouldn't know because I am rich, or because I am poor? Like I said, my family went through periods of making both less than that and considerably more than that in childhood, and I currently make more.</p>

<p>I never said that MIT doesn't have a problem - indeed, it acknowledged that it did - only that I didn't think the problem was being properly framed here.</p>

<p>Again, I am very much in sympathy with people who are losing out with the finaid system, be they families in the limbo of earning too much for much finaid but not enough to comfortably pay full tuition, or students whose parents have disowned them or otherwise refuse to pay, or the families in high-cost areas who are being compared to families with the same income in low-cost areas, or the unusual-situation corner cases who fall through the cracks in the system's specifications. Some of these people are my friends. I would love to see the system work better for them. I just want to establish that it's not a matter of throwing the many to the sharks for the sake of a few, or ignoring the needs of the entire middle class.</p>

<p>Also, I whale on the MIT administration plenty, so I feel obligated to speak up when I think that they are being seen as more in the wrong than I think they are. :) Which is why I mentioned that they are probably not raising tuition for no reason at all, that inflation is not the whole picture there, and that many faculty and staff are sharing the burden, even though based on what I know I do not agree with their having raised tuition the way they did.</p>

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<p>Huh? What exactly out of what Jessie said was "immature," "emotional," or "rooted in social class prejudices"?</p>

<p>And I know Obama is The One and all, but I didn't know he was also Webster and got to define the term "middle class." I personally don't see why it matters what you call it, why can't we just call it exactly what it is, families earning between 100-200K. And yeah, the system DOES suck for them. But MIT, like any other organization with a budget, needs to make ends meet. They unfortunately just plain don't have the money to give a free ride to everyone who needs it. That is truly unfortunate, but neither do I see you proposing a viable solution.</p>

9

<p>Wow! I never thought I would see the day when MIT acknowledged that their Financial Aid isn't perfect.</p>

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<p>The phrase "middle class" has become so diluted that it is completely meaningless. A household making %100,000 is in the top 15%. $200,000 puts you in the top 5%. Somehow, the average $44,000 household survives while raising a kid.</p>

11

<p>
[quote]
median household income in the US, the middle of the middle class, was $46,326.

[/quote]
</p>

<p>Well, to be fair, we need to be clear on what exactly a "household" is. A household is not necessarily a family, and in fact often times is not. A household is nothing more than the number of people living within a single housing unit. A single person living alone is a "household". Similarly, a couple of college students earning no income (and in fact, who actually earns negative income if you factored in tuition) but living in the same apartment is considered to be a "household". In fact, it is precisely for this reason that "household" income figures are unusually low in college towns, because many of the "households" are basically just students. For example, 10% of the "households" in Cambridge, Massachusetts and a whopping 25% in Ithaca, NY are making less than 10k. While some of these households may indeed be truly poor people, I think we can all agree that many of them are just students.</p>

<p>Cambridge</a>, MA Household Income - CLRSearch.com</p>

<p>Ithaca</a>, NY Household Income - CLRSearch.com</p>

<p>I think we can all agree that it's most unfair to compare a household that consists of a family who is trying to figure out a way for their kid to afford to go to a place like MIT, and a "household" that consists of nothing more than an 18 year old college student who makes no money and is living in his own apartment. Heck, if that family's kid decides to get his own apartment while going to college, then what was that family "household" now becomes two "households" - one consisting of that kid (who presumably makes no money) and the other consisting of the remaining family members. </p>

<p>So while it is clearly true that families who make more than $100k a year are clearly richer than the vast majority of "households", I'm not sure that that's a particularly meaningful comparison. For example, if I live in Ithaca, and I work at McDonald's part-time to make just $10k a year, then I suppose I am 'better off', at least from an income standpoint, than 25% of the Ithaca "households" that almost completely consists of Cornell students who don't make any income at all.</p>

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<p>Furthermore, I guarantee you that the average income of the "household" of MIT students before they go to MIT is higher than the National Average.</p>

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<p>The same may not hold true for MIT, but it was argued in front of the Senate that Harvard could still function without charging ANY of their undergrads a cent for tuition.</p>

<p>MIT is not hurting, despite the economic times, and they did NOT need to raise tuition</p>

14

<p>What does not make sense to me is the no loans policy many elite schools have adopted. If students receive a top notch education at MIT, Harvard, etc. shouldn't they easily be able to pay back the university. This would allow schools to keep tuition lower in the future.</p>

15

<p>Swimguy: Your argument offends my logical mind. Your statement that MIT is not hurting and did not need to raise tuition is based on
1. an "argument" presented in front of a governmental body, no less, and not a cited fact or statistic
2. that was made before considerable changes in the relevant environment occurred
3. and was not even about MIT, by your own admission.</p>

<p>Your statement may in fact be right (I don't claim to know), but your logic in getting there is quite a bit stretched.</p>

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<p>MIT is hurting. No university would freeze the salaries of its faculty and staff if it were not facing real financial difficulties: Faculty</a>, Staff Salaries Frozen - The Tech.</p>

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<p>Approximately how much finaid does the average family making $100K-$200K get? My parents make about $140K a year combined, but due to high property taxes, a mortgage, another kid in college, 2 kids in a private high school, 4 kids with braces in the last few years, and numerous other reasons, they'd only be able to pay about $7K a year (and I've got about $10K saved up). If I get in I'll have to take out substantial loans, won't I? Crap.</p>

18

<p>
[quote]
MIT is hurting. No university would freeze the salaries of its faculty and staff if it were not facing real financial difficulties.

[/quote]
</p>

<p>Actually, nobody knows yet how the endowment will be affected over the long run. MIT is taking proactive measures under assumptions that the endowment may drop by 30% or more. </p>

<p>2009 was the first year with an actual budget surplus and 2010 is projected to show a $20 million deficit possibly growing to $150 million by 2013 if nothing is done. The current plan is to mitigate any long term effect by taking remedical measures now rather than waiting. It involves reducing the budget by $50 million for each of the next two years. There would be no hiring freeze and financial aid would actually increase, but many ancillary services would most likely be affected. </p>

<p>An</a> Integrated Approach to MIT's Financial Future</p>

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<p>Just bumping this thread. I'm wondering how much (approximately) a family making $140K would be expected to contribute per year?</p>

20

<p>Danmam, there is no way to answer that question, as there are too many other variables. Making $140K means something different if you live in Manhattan or in Keokuk Iowa or in Tokyo or in Papua New Guinea. Supporting a single child through university is different than trying to put three kids through school at once. Different families have other expenses (eg a medical condition that places a significant drain on family resources) or other benefits (eg a trust fund that pays for all daily living expenses). Saying that "the family income is [x]" is just too crude a measure to make any useful judgement (cf chances threads).</p>

<p>Here then is the philosophy: MIT admissions admits all students need-blind. They do not see or consider financial circumstances in admissions decisions. The Financial Aid office awards all aid merit-blind. They consider nothing apart from the family's ability to pay. </p>

<p>Their objective is to ensure that every student admitted can afford to go to MIT.</p>

<p>To do that they try to take a view of the family's circumstances, figure out the maximum that the family can afford to pay, and then ask for that. They try to never ask for more than the family can pay, although it might hurt. They sometimes get it wrong. This is usually because some extenuating circumstance was not properly explained on the financial aid paperwork. If you think that they got it wrong, you can and should appeal the offer, though if they had all of your data correctly, I wouldn't necessarily expect much. That being said, this year there may be several appeals as family financial circumstances may have adversely changed for a number of folks.</p>

<p>If you apply for aid at roughly the same time that you apply for admission, then you should have your aid offer in hand at the time that you have to decide whether to accept MIT's offer of a place in the class.
Good luck
-Mikalye</p>