<p>Alexander, I usually always defer to your wisdom but just so you know, the 7% reference comes from Bearcat’s link he posted a long time ago during our now infamous privatization argument to the university’s own pie charts about resource allocation and budget revenue source. Together with his explanation and insistence, I came to accept that state funds did indeed only comprise 7% of the operating revenue. However, I will stand corrected if I misunderstood something in his argument, and am not especially attached to being right (in fact, would prefer that the figure is too low, because hey, the figure IS too low!). (Ironically, I used to argue re: the support of state meant should be public. Still think so but not impressed with level of state support ; )</p>
<p>
Fascinating hint of a different world view, if ridden with faulty syllogisms. Do you blame your own lack of logic on the fact that poor folks went to school with you? Your post certainly suggests that there is a direct correlation between “best student” and “affluent student” – but perhaps that was not your intent.
I’m equally certain you realize the contributions of some of those “lesser” (socioeconomic) students such as, say, Einstein, who was born to abject poverty.
In your scenario, I guess E would not equal MC squared ; )</p>
<p>Many colleges in America were founded by religious communities. Others were founded by very wealthy individual benefactors. Still others were established by the states. In none of these cases were they founded as businesses. The most selective schools usually have massive income-generating endowments, supplemented by operating revenue from tuition, gifts, research funding from governments and corporations, and profit-generating operations such as hospital systems.</p>
<p>These institutions, historically, have not been operated as profit-making businesses. They have tax advantages in recognition of the important service they perform to society. College professors are not wildly over-compensated. If there is a growing gap between middle class incomes and the cost of higher education, this seems to me to be due to a general shrinking of middle class purchasing-power that is not necessarily attributable to anything colleges have or have not done.</p>
<p>But you completely miss the point. Poor students get an unfair advantage at attending schools below market value. If the school were priced competively, meaning, a price that reflects its market value for EVERYONE, then it would be worth it to take the loans, regardless of income. But schools are NOT priced fairly for affluent students, which makes them a poor economic value. There are clearly NOT a lot of economists on this Board.</p>
<p>Albert Einstein was born in Ulm, in the Kingdom of Württemberg in the German Empire on 14 March 1879.[7] His father was Hermann Einstein, a salesman and engineer. His mother was Pauline Einstein (née Koch). In 1880, the family moved to Munich, where his father and his uncle founded Elektrotechnische Fabrik J. Einstein & Cie, a company that manufactured electrical equipment based on direct current.[7]</p>
<p>Sorry, Albert Einstein was not born into abject poverty…although that was a nice try.</p>
<p>
Yet there is no shortage of affluent students seeking admission to high-end schools. Thus, in the spirit of your market-driven complaint, we must conclude one of two things: (1) affluent students are irrational actors or (2) the schools remain a good economic value for them, too, if only more so for non-affluent students.</p>
<p>As the latter is more likely the case, we might ask how so? Perhaps because endowments and other philanthropic sources are permitting these schools to deliver high value even at full price. Which suggests that pure market models aren’t really applicable here.</p>
<p>Nor should they be. The point is that delivery of such welfare enhancing services as education probably ought not be market driven. Else how do we distinguish between deserving students and merely affluent ones? Sacrilegious, I know, to libertarians and other pure-market advocates, but true nevertheless.</p>
<p>That was amusing. Which is why our current government is failing. We have filled our government with idiots produced by this irrational system where only the super rich and poor are welcome. Those who work successfully in private business and are successful but not lucky sperm are not welcome.</p>
<p>The question was why such public discontent? Because we have set up a system based more on a desire to redistribute wealth than to produce the most productive populace. Sounds a lot like this administration, the one that is the definitive definition of economic inefficiency. Everyone in the middle knows this. Only the poor and super rich even try to defend it any longer. It is indefensible.</p>
<p>One factor could be that colleges are getting more and more expensive these days, so naturally people will ask- what do we get in return? It’s very understandable.</p>
<p>[Education:</a> Free Tuition for Smart Kids - TIME](<a href=“http://www.time.com/time/magazine/article/0,9171,1226169,00.html?loomia_si=t0:a16:g2:r2:c0.228908:b18796535&xid=Loomia]Education:”>http://www.time.com/time/magazine/article/0,9171,1226169,00.html?loomia_si=t0:a16:g2:r2:c0.228908:b18796535&xid=Loomia)</p>
<p>Ultimately, the public is starting to see that the “best” schools have become a scam and now the “best” schools are slowly starting to shift their resources back to the best students…rich or poor…as it should be. As any other rational business would choose to do. Obviously.</p>
<p>
If by “best” schools we mean the most selective schools, then by definition their average students have higher scores and better grades than less selective schools. Most of them publish detailed statistical reports that clearly show distributions across a high range. Even at selective schools with “holistic” admission policies, it seems to be typical that even the lowest-scoring 25% have respectable scores (and presumably other compensating qualifications.)</p>
<p>The same schools usually do have very generous financial aid policies. They admit students from a wide range of income levels. One rationale for these policies is that a better learning environment results for everyone when the best students are chosen, regardless of need. This does not necessarily mean admitting only students with the absolute highest grades and scores. </p>
<p>If a family is determined by the application process not to qualify for need-based aid, it generally means they have a sufficient combination of income and assets to afford the cost of attendance, if they choose to make it a priority. If they have other priorities (or fall through cracks in the process) then less expensive schools are available.</p>
<p>There are indeed gaps in the system for upper middle income families. However, the TIME article cited above is several years old. At Harvard and a few other top schools, the qualifying ceilings for maximum need-based aid are now much higher than $40K. Many selective, expensive schools offer merit-based scholarships. Chicago has offered them (including some covering full tuition) for many years. Johns Hopkins offers them too. These are both very demanding colleges that can’t be accused of watering down standards to meet far-out social engineering goals.</p>
<p>I guess I don’t understand what you mean, Debrockman, when you say that the upper middle class is being shunted from top schools. Stanford, for example, is 17% low-income. Low-income at Stanford actually means $60,000 or less. The median income for the country is just over $55,000. So, more than 50% of the country is represented at a mere 17%. Financial aid at Stanford ends at $150,000. I wouldn’t call $150,000 “upper middle income” (it’s actually the 94th percentile), but many on CC would. 51% of students do not qualify for financial aid. So, 51% of students come from families of $150,000 or greater - but 32% come from families with incomes between $60,000 and $150,000 roughly (certainly upper middle income). A similar tale can be said of other top schools; usually they have a lower percentage of low-income students attending. In that case, how is it possible that middle and upper middle income students are being priced out? Let’s say we did change the cost of attendence to a lower price, without giving financial aid. Let’s say that brought the cost down to $25,000 a year (a deduction of 50%). That would be 50% of the income for 50% of Americans (the median income is $56,000, remember). We both know that 50% of any non-ridiculous income is unaffordable. So then, who gets priced out? 75% of Americans, and ALL low-income students.</p>
<p>“My problem with the university system is that it does not do what it purports to do…educate the best minds to become even better minds. The “best” schools do not uniformly take the “best” students. The govt. and the universities themselves have decided to subsidize many lesser students at the detriment of better students.”</p>
<p>I’m not really understanding what you mean by “the ‘best’ schools do not uniformly take the ‘best’ students” … the schools you’re talking about practice need-blind admission. They don’t know how much money a student will need to attend their university when reading essays and reviewing stats. Students are admitted based on whether or not they meet the school’s particular criterion and are deemed to be the “best” match for the school; so essentially they are taking “the best students.”</p>
<p>Mojave, you are wrong. If they were totally blind to need, they would not have their 25% of students at the bottom who they will not even post stats on. Those kids are a typically a combination of lucky sperm trust fund babies and class balancers. </p>
<p>If these schools were as good as they said they were, at 25,000/yr., they would be a no-brainer…even if you had to work all year and get a work study job and borrow 15,000/yr. as a low income student. But they are not worth 150,000 in borrowed money for the top student coming in from a higher income family…followed by more debt for grad school. </p>
<p>As a result, most of the kids I know, the kids of doctors and other professionals, are choosing to go to the Big State University and graduate with no debt, which just about every money management expert actually is recommending.</p>
<p>These schools are absolutely not worth the full price tag any longer. And the only kid who pays the full price tag is the upper middle income family (or the super rich kid whose family does not care). And these people produce the most consistently academic kids.</p>
<p>So the low income kid continues to dream about Harvard. The trust fund babies consider Harvard their birthright. The Asians hold up the academic standards , and the professional’s kid goes to Big State U. and knows that they outperfomed many of those kids all the way through high school, but the system was rigged to punish them. Which in the end will not matter anyway.</p>
<p>debrockman - we’ve already established what the market will bear under the current system. You’re dreaming if you think prices will drop simply because “far-out social engineering goals” are removed. Prices will drop when the colleges themselves (i.e., the high-maintenance private colleges) realize they are losing wealthy students to less prestigious colleges and universities.</p>
<p>john…exactly…and many of them are and are not offering a lot more merit aid to kids who deserve it, regardless of income…based on their own achievements. It is actually pretty refreshing.</p>
<p>
</p>
<p>Make $10,000 a year to put toward school and another $2500 to cover books and personal expenses? That’s not happening. I’d imagine that, at best, a low-income student could contribute $5000 to tuition. That leaves $20,000 a year or $80,000 in loans. So it’s okay for a low-income student to take out a massive loan (considering he or she does not have a no debt in-state option), but it’s NOT okay for middle and upper middle income students to take out huge debt?</p>
<p>The top schools are the most financially generous schools in the country. If upper-middle income families save and make education a priority, they can pay. For a $150,000 family, $50,000 is 33% of their income. For a low-income family, $50,000 is 200% of their income. That’s a 10x disparity. Similarly, if the price was lowered to $25,000, it would be only 16% of the upper middle income (on this board, anyway). Yet, it would be 125% of a low-income family’s income. Why shouldn’t the low-income family qualify for aid?</p>
<p>I believe this has alot to do with a strategy recently among low and mid-tier schools to think the fastest way to move up in the world is to attract better students, so they build new buildings and make their college more of a country club to attract students instead of investing on the education side. To keep up, top tier schools feel obligated to do the same. The schools aren’t behaving like businesses, they’re behaving like a government buying votes with unlimited checkbooks. An equally good analogy is the insurance industry who gets to set their own prices because demand is so high.</p>
<p>Ring of truth there, Kvilledeac.</p>
<p>Btw, re the suggestion that Einstein was affluent, I had assumed he was comparatively ‘abjectly impoverished’ because a) (after working in a factory) his father’s subsequent company was initially funded by his wife’s family to begin with, since they had no money, then never made money, then went bankrupt, all before he was college aged b)his family fled Nazi Germany without any property, possessions or money and c) as a result, he went to work as a clerk in a patent office b/c he couldn’t afford college.</p>
<p>My point was and is that in Debrockman’s scenario where there is no need based aid, where only the “affluent” are considered the “best students” it is entirely possible to rob our society of future significant contributors, the backs upon which we commodititize science in order to become affluent ; ). So, second verse same as the first.</p>
<p>
</p>
<p>but theyd never be $25,000 per year. last year cornell spent less than $10,000 per student on financial aid, a number typical of selective private schools. even stanford, with its (relatively) socioeconomically diverse student body and ‘great’ aid program spent less than $16000. </p>
<p>in other words, youre basically talking about adjusting tuition to $40,000 and offering no aid. (and less than that, really, since some alums currently giving to support need-based aid would not wholly redirect their giving. same goes for the tricky issue redirecting endowed need-based scholarships.) but lets be generous and say $40,000, anyway.</p>
<p>for that higher income parents whose child would have had to borrow $150,000, rest assured. now she only has to borrow $110,000 to attend her dream university! and since she should be expected to get a job like the poor kid (you know, since we are now treating people equally), that means that wealthier parents, youre only on the hook for $200 a month! bet you cant feed your kid for that!</p>
<p>The universities themselves are realizing the mess that they have created. There is no way that a professional family with two children will pay full bore for two kids at 200,000 universities, followed by grad school. You cannot rationalize it economically. Those kids are choosing, instead, larger state schools with good merit programs, or small LACs with equally attractive programs. It is great for the kids who want to go to the Ivy League if they are super wealthy, international or low income, they don’t have to compete against many of their most competitive peers who have been priced out of the system. But everyone knows that there is no longer any pretense about these schools being the “best”. They’ve just become another mechanism of wealth redistribution.</p>