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That’s far from what I got from my test run of Amherst’s NPC. I wonder if there’s some parameter you plugged in I’m not aware of (maybe a high-cost state of residence?) From what I see, a household income >= 200K would pretty much knock you out even with essentially no asset and other equity. And I believe this is true even with HYP. I’d love to hear stories where families without “special financial circumstances” got significant need-based aid from elite schools with incomes over 200K.</p>
<p>There’s problems with the education system, but the main problem is the family system. I see a lot of bright kids, brighter than my kids, who didn’t “make it” because there was very little family involvement, or very little family left. Think of all the preparation that parents on this site do to set up the right conditions so their children will have the greatest chance of advancing further. On the flip side, I saw a 5 year old girl walking across a fast food restaurant driveway yesterday, and there was enough nothing around her that I blocked the driveway from traffic. She sat on the driveway and then looked into the bushes and her father climbed out disheveled and half drunk. He told her to run into the restaurant. She was so small she couldn’t even push the door open because of the negative air pressure on the door due to the central ventilation.</p>
<p>College can be hair-raising expensive, but I think it’s still “affordable”. A few years of a bit less leads to better outcomes for the next 40 to 50, and whatever generations that come after.</p>
<p>Thank whomever that most of the upper tier colleges had the foresight to boost their endowments in expectation of the price hikes.</p>
<p>Foresight? Their alumni got richer.</p>
<p>Yes, PurpleTitan, alumni prosperity is essential, but like mining, there must be the process and the means to efficiently extract the riches from the good Alumni to obtain an excellent yield. </p>
<p>I see some schools in my state struggling with financial problems, with an endowment of 200K matched to 5000 students, and infrastructure falling apart. In comparison, my undergrad school started seriously canvassing for bucks in the late 80’s, which is why they can give out so much in grants today, like many of the top tier schools.</p>
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That stats I used were a 4 person family, with 1 sibling age 14. Both parents had an equal income size, which summed the listed total (for example 2x $100k for $200k income). Assets were relatively low, and there was no student income. I’m guessing you either had other sources of income besides the parents’ wages you listed or had large assets. Regarding HYP, Harvard’s calc at <a href=“Net Price Calculator”>https://college.harvard.edu/financial-aid/net-price-calculator</a> is quick and easy to use, and allows you to vary one parameter to see how it influences the result. I see no way for the calc to not notable financial aid with a $200k income unless you have very large non-retirement / non-primary home assets (for example, $400k+ in savings account) or other sources of income (including student income). Yale lists the stats for their financial aid applicants at <a href=“http://admissions.yale.edu/financial-aid-prospective-students”>http://admissions.yale.edu/financial-aid-prospective-students</a> . Among students in the $150k-$200k income group, 99% of those who applied for FA received aid, with an average grant of $30,000. This also doesn’t sound like $200k is the cutoff for no aid. Princeton arguably has better aid than either HY, based on typically having larger grants than HY for similar circumstances and a smaller portion of students taking out loans, so if $200k income students are getting aid at HY, I wouldn’t expect them to get not aid at P.</p>
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Tuition is generally unrestricted funding in university budgets, while endowment spending is usually highly restricted. Tuition may not directly pay for financial aid, but it’s not just a coincidence that the tuition increases have matched the financial aid increases, so the average inflation adjusted net cost remains nearly unchanged, as pictured in the article’s graph at <a href=“http://www.nytimes.com/2014/08/06/upshot/amherst-college-and-financial-aid.html?rref=upshot&_r=1”>http://www.nytimes.com/2014/08/06/upshot/amherst-college-and-financial-aid.html?rref=upshot&_r=1</a> . In an earlier thread, I found that the same pattern of net cost increases matching financial aid increases, so average inflation adjusted net cost remains nearly unchanged at other highly selective colleges that offer excellent financial aid, such as Harvard and Stanford.</p>
<p>“Tuition may not directly pay for financial aid, but it’s not just a coincidence that the tuition increases have matched the financial aid increases, so the average inflation adjusted net cost remains nearly unchanged.”</p>
<p>If they are going to increase tuition doesn’t it naturally follow that the FA needed for one with a lower income to attend also increase to compensate? </p>
<p>If someone who is full pay doesn’t want to pay the the price necessary to attend one of these schools, there are many other alternatives from which to choose. If they feel that their tuition payment would be subsidizing the lower income student - there are also plenty of schools which charge an equally high tuition they can send their kids to where lower income students get very little in aid except for Pell. </p>
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That would only explain FA increases at the high end, not net cost decreasing for lower and middle income students. In order to keep inflation adjusted average not cost constant, you need to have all net cost increases for certain groups matched by net cost decreases in other groups. For example, suppose half of the student body has incomes of >$200k and half has incomes of <$200k. If average inflation adjusted net cost increased by $20,000 over the past 10 years in the >$200k group, then average inflation adjusted net cost needs to decrease by $20,000 for the <$200k group, in order for the overall average net cost to remain constant. The lower and middle income families are as a whole are paying less than they did 10 years ago (after compensating for inflation) at such colleges.</p>
<p>Ok. </p>
<p>@Archer1415 : OK and does the school with an endowment of $200M and your school have alums who are equally successful?</p>
<p>@Data10
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<p>Not necessarily. You can express $200,000 in income a number of ways and come up with vastly different EFCs on the Amherst net price calculator. By expressing it as essentially two teacher’s salaries put together, @Data10 obtained the most generous permutation.</p>
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<p>LOL. I hope you’re referring to the $100k as “two teachers’ salaries put together” because that would be far more accurate for the vast majority of teachers. </p>
<p>@romanigypsyeyes
That brings up another variable: cost of living. I’m betting @data10 used New York as his family’s residence.</p>
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<p>Yes, part of endowment spending is restricted, but a couple of points need to be made. For starters, some of the endowment is earmarked for financial aid. When my institution recently received a $100M gift, about 25% of it was targeted for financial aid. A parent recently expressed a desire to make a gift to my department for a specific purpose. After the development office got through with the donor, 50% of the gift was earmarked for financial aid. The point is that either because of the donor’s initial wishes or because of cajoling by the development office, a sizable chunk of what is put into the endowment is for financial aid. </p>
<p>Consider two otherwise-identical schools. The only difference is that the Gates Foundation gave school A $250M for financial aid whereas it gave school B $250M for faculty salaries. If the annual payout from the $250M covers the entire financial aid budget, you could argue that the endowment was the sole source of the financial aid subsidy at school A. If so, can we not say the same about school B? After all, money (especially inframarginal money) is fungible. </p>
<p>Another point to remember is that full-payers at schools such as Amherst are paying about $25,000 below average cost. To argue that they are subsidizing other students is at best pedantic. </p>
<p>And I am waiting for a serious empirical study showing that financial aid increases cause tuition increases. </p>
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<p>No it isn’t.</p>
<p>I think saying the full pays are subsidized by the endowment is presumptuous at best. We have absolutely no idea what percentage of donors gave money to lower tuition, or build a building, or fund research, or add a department, or give scholarships to worthy students to study abroad, etc. The endowment is money that was given to the school and the school now has at its disposal. How is it fair to say today’s students are being subsidized by the endowment any more than we can say today’s students are being subsidized by buildings constructed in the 1950’s? The endowment is there, whether the school has a student body that is 100% full pay or 100% FA students. From year to year somehow the best schools always seem to have the same amount of highly qualified students who just happen to be full pay. If the full pays weren’t subsidizing something, I suspect that number would vary more from year to year.</p>
<p>Maybe it would be more fair to say that the full pays are subsidizing the endowment, while the FA kids aren’t?</p>
<p>Finally, what’s the breakdown of that 80k? Remember when Duke broke their real costs down, a significant portion went to FA?</p>
<p>The big advantage of having an endowment for many years is that the initial amount is seed money for investment gains which, if I am not mistaken, can be used by the institution as it wishes.</p>
<p>The article states that most of the full-pay families are “earning hundreds of thousands per year”. I think a lot come from families making the lower end of that and less than $200K. Amherst may give nice fin aid, but most others do not. And many of the schools in lower half of the top 50 are large state schools and others have severely limited their merit aid. For a kid that has Ivy (or Amherst) level states, merit aid should be there. But for those that are just a bit below that, not so much (and much less than pre-2008. </p>
<p>This board has had this discussion numerous times and many agree that anyone making over $100K should have no problem paying for a private. However, I think it is ridiculous to look simply at the “net” price paid by those eligible for financial aid without looking at the burden on families that, as others have said, are too rich for fin aid and don’t make enough to save for $60K per year in college along with paying off their own student loans and saving for retirement.</p>
<p>I am all for State Unis and one of my kids attends one, but they are not right for all kids. I have to admit I find it frustrating that I was able to attend a private school because of fin aid and all these years later, my kids are limited in where they can go due to money. We saved a lot, but with three kids, two working parents (and associated child care costs), no pensions, and a high cost of living area, saving $700K beyond our retirement funds was completely unrealistic. </p>
<p>Not complaining at all. An elite education is a luxury good and my kids will be fine. But please don’t tell me that college costs are not ridiculously high. </p>
<p>Here are the 2012-13 Amherst numbers from <a href=“https://www.amherst.edu/media/view/545457”>https://www.amherst.edu/media/view/545457</a> (p. 12)</p>
<p>The amount coming from the endowment and annual giving is more than twice financial aid</p>
<p>Financial aid = $43,898,021</p>
<p>Distribution from endowment = $69,527,252
Gifts and grants for operating purposes = $8,187,722
Annual Fund = $10,304,856
Total = $88,019,830</p>
<p>Another way to look at the data is to ask what average cost would be with financial aid excluded. </p>
<p>Total expenses = $149,701,740
Financial aid = $43,898,021
Total expenses net of financial aid = $105,803,719</p>
<p>Divide the net by 1800 students and you get $58,780, which is basically what full-payers pay. So now I can tell my kids’ schools that I was not really being subsidized after all. </p>
<p>@mom2and:</p>
<p>Depends on what you can pay. If you make $200K or more and your kid can get in to a top 50, not only are publics available, but also a decent number of LACs (who are increasingly generous with merit aid).</p>
<p>I was able to go to a good private school on fin aid and my kids will have to be full-pay, but I don’t find it frustrating since you can’t have it both ways. Either fin aid was generous enough to allow us to go to an elite school (in which case the upper-middle class would be squeezed) or else overall tuition is lower, making the top privates unaffordable to the poor (and thus limiting their choices). The only way cost would not be an issue for anyone is if there are heavy government subsidies (requiring more taxes), but if anything, state governments have been cutting back their expenditures on public schools.</p>
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There are many possible reasons why this relationship may exist. For example, as I recall, shortly before colleges starting offering no loan FA with full rides to lower income families and lower costs to middle income families, there was a proposed bill in congress to make colleges spend a certain percentage of their endowment per year. So some colleges may have mitigated concerns over this requirement by spending FA through their endowment, then compensating for the increased FA spending with an increased sticker price. They meet a minimum endowment spending requirement, yet still have the same amount of total money left over for other areas of their budget, if they make up for the financial aid increases with sticker price increases among high income, full pay families. This is consistent with how inflation adjusted net cost has remained constant as sticker price has increased at Amherst and other selective colleges. The endowment may be paying for the FA directly, but increased FA spending for lower/middle income families is compensated by matching increases in net cost for higher income families.</p>