As an upper income parent who already pays eye-watering income taxes, I refuse to be a victim in this high-tuition/ high-aid rape.
The thread is titled is college tuition too high and the solution is for someone to pay more? Any business model built on cross subsidization (asking one group to pay more to cover the cost of another for the same product) results in escalating prices (see American healthcare and of course higher education). At some point, you max out what the subsidizers are willing to pay. In the case of the Ivies, we are nowhere close to that point. In the case of some of the less selective privates, we are there in my opinion.
Amen. I pay enough. I’m not asking for a tax cut or FA, but I am asking that you stop hitting me up everytome you need more cash for XYZ…Oh, and I’d appreciate if those of us who are required to pay were not denigrated or vilified for our success:(
I’m all for financial aid, even though I really don’t qualify for anything beyond unsubsidized loans, but what gets me is that the tuition amount is a variable in the equation. This seems to be an incentive to raise tuition because federal money can flow in to help offset the increase. Seems a better method would be solely based on income/savings, completely disconnected from the school. I’ve seen proposal to base aid on the prior years tax return, so doing this would allow a student to get an answer on aid before even starting the application process and force schools to keep pricing in line with the money to the students have available.
Well, to be fair you have to admit that the thread title* is not College tuition is too high!, but rather Is college tuition too high? As a result, it seems completely reasonable for some people on this thread to be answering that with a no, you know?
- Which is lifted directly from a NYT Magazine article title, BTW.
@HRSMom, #39, Caroline Hoxby has a study published in 2009 on the point. http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.23.4.95.
In 2007, the most selective colleges were spending $100,000 per student. The note to the chart on page 109 states,
If the universities were only spending an equivalent amount today, that would be $115K, due to inflation.
The drop between the most selective colleges and the next grouping (colleges at the 96th-98th %ile in selectivity) is large, about 50%, that is, about $50,000 less.
Hoxby argues that investing in high-aptitude students benefits the most selective colleges over time, due to donations from alumni.
A different study found that spending on amenities appealed to students. https://www.insidehighered.com/news/2013/01/29/many-students-opt-colleges-spend-more-nonacademic-functions-study-finds
However, different students value different things.
Those students able to get into highly competitive colleges value academic spending. Paying full tuition for college may make sense over time for the very smart and very rich, if they are smart enough to do well.
Tuition and fees are also heavily discounted at private institutions. https://www.insidehighered.com/news/2015/08/25/tuition-discounting-grows-private-colleges-and-universities
If you look at the business model, as long as universities are turning away applicants who they’ve classified as qualified, isn’t it natural they’ll keep increasing fees, especially since they don’t bear the risk? I feel the bigger problem is the availability of ready money in the form of loans for private school tuitions that the taxpayer will ultimately be on the hook for. Why is a high schooler more entitled to getting a loan to go to NYU than getting a loan to pay for a Beamer?
The federal direct loan amounts are only a small portion of what expensive private school tuition costs.
Yeah, at least for a loan for a Beamer, you have to prove credit-worthiness, and the bank can hold title to the Beamer as collateral.
“Why is a high schooler more entitled to getting a loan to go to NYU than getting a loan to pay for a Beamer?”
No high schooler is getting a loan that covers even 20% of the cost of NYU. The parents are getting that loan.
You may “feel” that way, but it really doesn’t square with the facts. The maximum amount in federal loans an undergraduate may take out is $31,000–up to $5,500 in the first year, up to $6,500 in the second year, and up to $7,500 per year in subsequent years, up to a cumulative maximum of $31,000.
The 4-year COA at an elite private university is currently around $250K. It’s hard to see how the availability of $31K in loans is responsible for it costing $250K to attend a private college, unless you only mean that without the loans these colleges would be compelled to keep the cost down to about $220K. Though even that much is doubtful. About half the students at the truly elite price-setting institutions are full-pays, many of whom take out no loans, and most of these schools have such generous FA that very few of their students take out anywhere near the full $31K in federal loans. Some, in fact, have no-loan FA policies, but they seem to have little difficulty in making those high prices stick.
Most college students aren’t able to get unsecured college loans from lenders other than the federal government, and when they do, the loans are often smaller, and the taxpayers are certainly NOT “on the hook” for those loans.
Parents sometimes take out loans to help their kids through college, but the parents, not the students, are responsible for these loans which include unsecured federal Parent PLUS loans, or in many cases secured loans, e.g., HELOCs on their homes. That’s a separate question.
Usually when you hear about a student with massive student loan debt, it’s a graduate student. Law and medical students often take on very large amounts of debt (and the federal borrowing limits are much higher for graduate education, up to $20,500 annually or a cumulative total, including both grad and undergrad, of $138,500), with their undergraduate years accounting for only a small fraction of the total. But the high costs of law school and medical school, and the student debt associated with it, are not responsible for driving up the cost of undergraduate education. If anything, the high costs of these graduate-level programs should tend to put some downward pressure on undergraduate tuition and undergraduate borrowing, as the more prudent law- or medical-school-bound undergrads seek to minimize their undergraduate costs and debt so as to make graduate work more affordable.
“NPCs seem worthless to me. Granted, I haven’t run many, but when you are pretty dependent on merit aid…their use seems minimal at best” - At least NPC were able to give you the initial level set that your family will NOT be eligible for need-based FA.
When we started our first college search about 10 years ago, that was not possible. There were a few schools that would run approximations if you sent them input, but it was cumbersome.
This is why I feel their use is limited (pretty much worthless) for some families…once you run one and find you aren’t eligible for aid, you can rest assured that it will be the case with most others…unless merit aid is somehow taken into account. I probably won’t take the time to run an NPC for every college we research, unless someone convinces me otherwise.
I’ll tell you my story and you can decide if it is worth $20k. Both schools that my daughters picked had NPCs with the merit money also included. For one, I ran it with her ACT score and gpa, and the merit amount came to the second amount the school offered. When we met with the coach, she had a lower figure, so when we got home I ran it again. Still the higher amount. Hmm. When the official offer came, it was for the lower amount. Called the school and it turns out they’d been using a lower ACT score and hadn’t updated her file when DD retook the test.
There was nothing in the school brochures that said what the merit award should be, just that it was based on gpa, scores and class rank (if available). If I hadn’t run the NPC, I wouldn’t have known to question it. When I asked FA officer about it, he said that merit is awarded by admissions and so the FA officer wouldn’t have questioned it either. Total I would have left on the table? $20k. The NPC was also the first place I learned the amount of the Florida resident grant too. The school would have caught that, but when I was comparing awards during the application stage I wouldn’t have had the correct numbers.
I think running the NPCs is worth the 10 minutes or so that it takes.
Yes, but that’s only undergraduate loans. That’s not counting the Parent PLUS loans that were, until very recently, quite easy to get. I don’t think that’s really a “separate question” if we are discussing taxpayer-funded loans, because Parent PLUS loans are exactly that.
There are some interesting articles in the wild about the endowments at private colleges. Basically, a few authors have contended that large elite universities are basically functioning as hedge funds, investing their considerable endowments while charging ever-higher tuition prices (mostly to upper-middle-class and higher families). At least one author proposed that the government require universities to spend a certain percentage of their endowment (somewhere between 5 and 8 percent) per year on activities directly related to student education - so no nap pods and rock climbing walls, but faculty salaries or adding additional sections or financial aid.
In principle, I would agree with this. But, in actuality, I can only think of one elite college that isn’t already spending, at a minimum, 5% of their endowment incomes - Swarthmore IIRC, at 4%.
College faculty are no different than any other members of the middle-class; they’ve seen their positions erode over the space of the past twenty years. Colleges struggle to make the professoriate attractive enough to lure the best minds away from jobs that offer higher starting salaries for far less time spent in school. The pressure to spend money on more compensation is already enormous.
And, hearing this, the ever-growing ranks of adjunct faculty at the nation’s colleges snort derisively.
I don’t blame them. But, isn’t the growing trend toward use of part-time or adjunct faculty just another symptom of the same thing I was talking about?