<p>I have heard many times that full pay students are actually paying one and half times the cost to educate them in order to offset those receiving some type of aid.</p>
<p>Interested dad, very informative post. Thank you. But directly at odds with the statement from Kajon. I-Dad’s actual methodology actually makes sense to me as does his warning about other issues muddying the waters. </p>
<p>If the figures are comparable for HYPSM, it’s surprising they would still subsidize the kids who have their family names on buildings; one would have thought the sticker price would be at 60-85 grand (which they can justify as being “at cost”) with a higher ceiling on family income to qualify for FA. </p>
<p>It would make a good afternoon reading to look at someone’s analysis on costs by type of university (including flagship) as well as type of expense - direct salaries, indirect salaries, infrastructure, etc.</p>
<p>Not necessarily at odds. It just all depends on the tier of school. The elite liberal arts colleges are spending $60,000 to $85,000 per student, but that money has to come from somewhere (endowment spending, annual gifts, research revenues, and miscellaneuous like renting the campus for summer soccer camps).</p>
<p>You don’t have to go very far down the ladder to get to schools that are essentially reliant on tuition for their entire operating budget. There are only 340 or so schools in the US with an endowment of $100 million or higher. Fewer than 900 schools with a $1 milllion endowment. There are plenty of schools where a student paying sticker price is paying more than the average per student operating costs. However those schools are usually not getting anywhere near $50,000 sticker.</p>
<p>Still at the high end, Oberlin spent just under $51,000 per student last year. Bates is in that range. Dickenson spend $43,000 per student the year before; I haven’t looked at the most recent year. I could find you schools that spend a lot less than that, although it gets harder to find their annual financial statements.</p>
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<p>There would be schools that would go to $75,000 if they thought everyone else would follow suit. However, they are all competing for students (or for lower acceptance rates and more prestige). Raising the sticker price hurts wealthier customers, driving some of them to less expensive alternatives. It’s important to keep attracting those students. A $50,000 sticker price is like putting a $75,000 Mercedes on sale for $25,000 off. Customers see the fancy interior, the leather seats, the power moonroof, and that all important logo and line up around the block to get in on the deal. Driving the demand up and the acceptance rate down increases prestige which, in turn, drives more demand.</p>
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This simply is not fully accurate, at least at schools that use CSS Profile to define the “need” they will meet. My daughter has qualified for Pell grants for 2 out of the 4 years she has been in college, but in those years the financial aid awards pretty much left us on the hook for roughly 1/3 of the overall COA. I’d note that she did not qualify for a <em>full</em> Pell grant in either of those years - but there was a significant chunk of grant money that came from Pell.</p>
<p>The point is, though, that the college considered income & assets that were not part of the Pell calculation – in our case, income from the non-custodial parent (excluded from FAFSA), and home equity (also excluded from FAFSA). The Pell money simply helped the college more than it helped us – it was a source of revenue rather than the college’s own grant money. </p>
<p>I will say that it seemed that in the years that my d. qualified for Pell, the overall award was more generous than the alternate years, not because of the addition of the Pell money – but my impression was that the financial aid office operated under a policy that encouraged them to look for ways to maximize Pell eligibility. I know that the first year my daughter qualified the college used “professional judgment” to also change our FAFSA - not by correcting an error we made, but by going over our tax returns and giving us an additional deduction based on a discretionary factor. </p>
<p>The years when my d. did not qualify for Pell, the college seemed much more parsimonious about its approach. Those were the years when they’d go over the schedule C’s and disallow deductions, adding stuff back into the equation. </p>
<p>I’m raising this because I think that some people are assuming that when they see Pell figures, that all of those students come from very low-income backgrounds. Maybe by CC standards I would be considered “low-income” as well – but by any other standard, I think I would have to be considered middle-income. I fit rather neatly into this category:</p>
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<p>Source: [url=<a href=“http://en.wikipedia.org/wiki/Household_income_in_the_United_States]Household”>Household income in the United States - Wikipedia]Household</a> income in the United States - Wikipedia, the free encyclopedia<a href=“based%20on%202007%20figures”>/url</a></p>
<p>I’d also add that given the reality that women tend to earn less than men, that women more often end up being the custodial parent, and that income from one-earner households is usually significant less than household with two earners – I’d expect that this situation is probably fairly common. That is, there are probably many students at private colleges from single parent households whose Pell eligibility is calculated based on their mother’s income, but whose overall financial aid package is calculated based on the income of both parents.</p>
<p>“Households in the mid quintile, with a mean of approximately one income earner per household had incomes between $36,000 and $57,657.”</p>
<p>Yup. That’s the “middle class”.</p>
<p>High endowment spending doesn’t mean that the funds are being spent on stuff that is of substantial value to students. It could be to maintain a PGA golf course, or an arboretum, or a very large parking garage. The use of endowment quickly meets the law of diminishing returns. And while in good times, high endowment returns allow a college to purchase all kinds of goodies, in bad times it subjects an institution to substantial cuts - sometimes in the academic core - which is not experienced by schools with significantly lower endowments. </p>
<p>“Ditto Barnard with D. Smith wait listed D; all women’s colleges all accepted her. Couldn’t help thinking that maybe Smith didn’t want to spend its money on D.”</p>
<p>Smith is very transparent about how they do their admissions/financial aid. The Board of Trustees has made a core commitment to low-income students, and older students - hence Pell Grant percentages that are 50% or more higher than similar prestige LACs. And they are committed to meeting 100% of need, as they see it. The aid budget is set before admissions, and admissions of the first 95% of admits is done on a semi-“need-blind” basis - except that there is a stated preference for low-income, highly qualified applicants. The financial aid office keeps a running tally of what is to be spent. With 5% of admits to go, the admissions office is told how much money is left in the budget. At that time, need may, or may not, be taken into account, depending on what the budgetary model tells them. </p>
<p>Merit aid (i.e. STRIDE research assistantships, valued at $15k a year, plus $3k in guaranteed work study) are awarded without regard to need. However, if a high-need candidate (like my d.) receives one, it reduces need-based aid accordingly.</p>
<p>mini: As I said, I have no quarrel with that. I was just trying to shine a light on how things are done some places. Smith gets my love.</p>
<p>Of course, I am pleased that the other sisters felt differently and I was able to fund my girl’s education, too.</p>
<p>I don’t think it makes much sense to read too much into the acceptance/waitlist/rejection decisions of a single student based on financial need. </p>
<p>I think that most schools that meet 100% need are well-endowed enough that they do NOT make individual admission decisions based on financial aid considerations. The may make broader decisions based on policy or goals – it is easy enough to impact overall results by looking for more or less students who have certain indicia of wealth or poverty. (Example: more favorable consideration of students from urban public schools is more likely to draw lower income students; a higher emphasis on attainment in the arts might skew toward students who come from families that were able to fund many years of private music lessons).</p>
<p>At schools that do NOT meet 100% need, the admissions office does communicate with financial aid. Most of those schools are highly likely to be “need blind” when it comes to admissions, but NOT “quality blind” when it comes to structuring of the financial aid package. NYU is a prime example of a school that certainly does not discriminate against low income students in admission, but structures its aid policies in a way that leaves a huge amount of unmet need for the majority of students it admits. </p>
<p>But I think very few schools are considering the financial need as a significant factor in terms of individual admissions decisions, even among many schools who do not promise to be need-blind. It may be the “last straw” factor – if the kid is marginal for admission and the school is need-aware, then that might be the deciding factor in a rejection. But most need-aware colleges are more likely to simply resolve the financing issue by the way their enrollment management strategies – they simply accept the students they want, and offer each admitted student what they feel that student is “worth” to them.</p>
<p>I’d note that the pressures of the admission process and financial aid determination practically dictate that approach. At the time the admissions decision is made, the college usually doesn’t know how much aid the student will need, or even if the student will be deemed eligible for aid. Given the high cost of attendance these days, many children of 6-figure earners are checking the “financial aid” box on the application – but the students may end up qualifying for little or no grant money out of the college coffers. Any student who qualifies for federal subsidized loans, but NOT for college grant money, is a source of revenue for the college, not an expense. It doesn’t make a difference to the bursar if a check comes from a lender or a parents. So its usually a lot more efficient for the admissions department to do its job of selecting the students it wants, and to let the financial aid department do its separate job of figuring out what, if anything, to give each admitted student in the way of subsidies.</p>
<p>It’s shaky ground to try to make generalizations based on individual experiences, but I still find them interesting. Last year, D was waitlisted at three top LACs - all chosen, in part, because they are ‘need blind’ schools. It surprised me (I know, my failure to read the fine print) to learn that all were NOT need blind to students coming off the wait list. In other words, three schools (of the 12 applied to) were no longer possibilities for her and she didn’t stay on any of those wait lists. She might as well have been rejected - to be offered wait list at a ‘need blind’ school that does NOT extend that policy to waitlisted candidates is a bit of legerdemain. Yet she was admitted to a top 3 university - with aid - so it’s not that her application was unreasonable. She visited two of the three schools and interviewed for all three so she did show interest (and going into the process, she would have loved to attend any of the three). I can’t help but feel her regular decision, financial aid applications hurt her. And as so often happens, she’s very happy at the U that showed her the love.</p>
<p>interesteddad, thanks for that information about how much college really costs to run. I had heard numbers like that in the past, but nothing recently. When you consider that, it looks like the biggest subsidies are going to the rich. And I can see how raising the prices can be pretty tricky. Maybe some college could try auctioning off openings to wait listed students and see how that goes :)</p>
<p>And again, the consensus seems to be that there are lots of little ways that colleges can get around being purely need blind without being too obvious about it. And if the economy keeps getting worse, it will be interesting to see how it effects these decisions.</p>
<p>This whole “need blind” question is one for the philosophers. Obviously, there are clues and tendencies that result in a “need blind” school enrolling the class it wants with a predictable assortment of need. On, the other hand, it’s not fair to those colleges to accuse them of being overly disingenuous when they really are driven by a desire to increase diversity. Without actively trying (i.e. if they just enrolled the top SAT scores from the top high schools without “affirmative action”), they would be nearly 100% wealthy and white the way they used to be.</p>
<p>They don’t really need to change policies to lower the fianancial aid budget. All they have to do is make the aid offers a bit less attractive. A few more need students will enroll elsewhere, the percentage of full-fare students will increase slightly, and the total aid cost will be contained a bit. </p>
<p>At the end of the day, none of this really matters. On a macro scale, you look at the student body a specific school gets and decide if that’s the kind of student body you want. How diverse is it? And so forth. None of this matters on a individual basis. The only thing that counts there is opening your own financial aid letter and deciding whether or not it meets your needs. I’ve seen no way to predict which school (from within comparable tiers) will give the best aid package to a particular student. Too many variables.</p>
<p>This thread and article touches on a lot of the same themes we’re discussing here:</p>
<p><a href=“http://talk.collegeconfidential.com/parents-forum/863253-washington-post-article-net-cost-tuition.html[/url]”>http://talk.collegeconfidential.com/parents-forum/863253-washington-post-article-net-cost-tuition.html</a></p>
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<p>The Chronicle of Higher Education
Section: Government & Politics
Volume 52, Issue 36, Page A14</p>
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<p>[DameNation:</a> May 2006](<a href=“http://damenation.blogspot.com/2006_05_01_archive.html]DameNation:”>DameNation: May 2006)</p>
<p>^^I think your point is that Smith is pretty straightforward about giving out financial aid to really poor students. Or at least they were up until a few years ago. Let’s hope that they stay wealthy so they can continue to do good things.</p>