Paying full tuition

Parent Cafe
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<p>The fact is I qualify for nothing so I will be paying full freight for my son's college education. The fact is: paying for college is a somewhat socialistic process. To a large extent the "haves" subsidize the "have nots". OK. So that's the way it is. I'm fortunate to be a "have" and I'm not complaining (too much). But, here's my rather unseemly question. Do colleges desire full paying students to the point that it can somehow provide an admissions advantage? My son has terrific grades, SATs etc., etc. But, could my financial situation help him get into a slightly better school? </p>

<p>Yes, it's an unseemly question I am posing. But, I know this probably goes on and I've only got one shot here. Most would say "Oh, this must be stopped!" I'm saying "How do I get in on this."</p>

2

<p>1) The elite schools separate financial aid from admissions (although the adcom can pretty well figure out who needs financial aid). The elite schools would consider financial aid an advantage if it adds to their socioeconomic diversity. Remember with a billion dollar + endowment you think differently.
2) Full payers (like you and me) are not subsidizing the financial aid recipients at the elite schools. Most schools financial statements show they spend up to twice tuition on each student. In a sense all students are receiving financial aid. The shortfall is picked up by endowment income. Likewise, endowments for financially needy pay for the aid assisted student. Therefore, you are not paying for the student on financial aid.</p>

3

<p>I have no scientific evidence, just our own personal experience and my observations from reading CC for over a year:</p>

<p>People who require FA to send their kids to their preferred schools frequently say that folks w/enough money to pay full freight have an advantage.</p>

<p>Folks who can/do pay full freight make no such claims. And in our one case (which doesn't prove anything), it had no impact. His GC said she would be "shocked" if he hadn't gotten into the 4 selectives to which he was offered admission (including an Ivy), and also said the fifth was a reach--and he didn't get in there. We didn't even apply for FA. I did use the CC calculator to estimate our EFC...and the result was such that I didn't even fill out the FAFSA...</p>

<p>So, I think it's self-deception to think you get any kind of advantage (unless it's infinitesimal) by virtue of the fact that you will pay list price.</p>

4

<p>Another full-freight payer here. I don't think it makes a difference in the first round, but I have read that it may make a difference in taking a kid off the waiting list. If a school has used up its financial aid budget, they are more likely to look favorably on a kid who can pay.</p>

5

<p>Being able to pay full freight gives you an advantage at the outset, because if your child has a clear first choice, you can apply ED. The value of that varies, but at some schools it is very clear advantage, easily discernable from published statistics. </p>

<p>While the very top colleges all purport to be "need-blind", this is not the case with colleges just a notch below -- so you also have an advantage if your kid isn't quite Harvard material but still desires a strong school. </p>

<p>There are many excellent colleges that don't promise to meet 100% need -- so another advantage is that once your kid does get in, you can afford to pay. [I just figured out that the reason that NYU is the #1 "dream" school in the Princeton Review is from all the students "dreaming" that they could afford to go there.] It's not really an admission advantage of such, but it's kind of hard to turn down the #1 college on the list after getting admitted because the money isn't there. </p>

<p>Finally, even need-blind colleges aren't always need-blind when it comes to the waitlist. It depends on how strained their financial aid budgets are at that point -- if the word from the financial aid office comes down as "no more left".... then those precious spaces are going to be filled by full-pay students.</p>

<p>So yes, it is an advantage. How big probably depends on where your kid chooses to apply.</p>

6

<p>very few colleges are need-blind. That means, of course, that the rest DO take need into account. </p>

<p>And it starts even from recruitment; if you go to the collegeboard website and explore the areas for colleges, you will see that colleges can buy lists of applicants based on estimates of average family wealth.</p>

7

<p>fpat, if your son has terrific SATs and a great GPA, hewon't need the advantage of being a full pay candidate. The advantage of being a rare commodity, a high achieving male, will trump your ability to pay. In fact, quite a few second tier schools may give you enormous amounts of money for the honor of educating your academic son. Check out the 'Merit Money ' threads.</p>

<p>Also, when checking out the Accepted threads for the individual schools, be sure to compare your son's stats to the male acceptance stats.</p>

<p>AS a full pay parent, I have to believe the kids. They believe that checking the FA box puts them into a tougher position. I tend to agree with them.</p>

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<p>If you have a kid with "terrific grades and SATs," there is no reason that you HAVE TO pay full price. He could easily qualify for very nice merit scholarships someplace. </p>

<p>So, like everything else, it is your choice to pay full price. </p>

<p>Whether it provides an advantage - somehow I doubt it is a huge advantage, as there are plenty of rich kids (or kids whose parents are willing to go for broke) with great grades and SATs (especially in the very top schools), so probably the same schools where it would be an advantage are probably pretty close to the schools that would offer him merit money anyway.</p>

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<p>Some schools are up front in telling applicants that they are not need blind. Being a full pay applicant can be a "hook" at such a place.</p>

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<p>Lots of times colleges will throw a bone to get a high-stats kids to enroll: maybe $10,000 a year or a bit more. I agree with the previous poster who said that being a male will help in some cases, especially if the school presently enrolls more females than males. You won't get merit from the Ivies, though, of course.</p>

11

<p>My therapist told me that " You control what you can control..." , "Don't worry what you can't control."</p>

<p>The ONLY thing that was in our control was having the abllity to pay for the school of his choice. We also are aware that no matter how much parenting and money, Who a person becomes is not up to us but to the person.</p>

<p>We consider us fortunate that all has, so far, worked well. The burden of money for education is one less burden that we and child, do not have to worry about. </p>

<p>[ 100% EFC, but with nice merit package from CMU. Graduates in 51 days. Then to grad school with paid tuition, living stipend, and scholarship.]</p>

12

<p>WSOX,</p>

<p>PLEASE don't fall for the PR colleges put out about EVERYONE getting a subsidy. That claim makes about as much sense as GM saying it sells every vehicle at a loss (because, if you take total revenue, subtract total expenses, you have a negative number..)</p>

<p>Colleges have used the subsidy argument for years as a fundraising tool. After all, it works so well. But, to truly understand the truth, one would need access to information that is hard to come by, the cost of undergraduate instruction. </p>

<p>At any rate, at most schools (well endowed LACs MAY be the exception. I don't know.), undergrads are profitable. At research U's, grad students as a whole are where the cost is, but even among them, in general, science grad students are profitable but humanities and social science are not (but if one factors in the true value of teaching assistanceships, even that may not be true).</p>

<p>Even among undergrads, lab oriented subjects (the sciences, generally) are far more expensive than a humanities course.</p>

<p>So yes, the full payers ARE subsidizing the fin aid recipients. Of course, this is as meaningful as saying that someone who buys clothing at full price is subsidizing someone who buys the same thing later in the season at a deep clearance discount.</p>

<p>To address the OP's question: Ability to pay has some perverse influences on merit awards. Realize that merit awards are often not about merit, but about revenue management. See the excellent Atlantic Monthly article from last fall for more details. Suffice to say that, at a particular school, if your kid is a strong applicant, They may determine that you are more likely to attend, paying most of the tuition, if they offer you a merit award. How do they know your income? Many ways. Some schools require that you submit Fin aid docs to be considered for merit awards. They can also easily and inexpensively buy the data from commercial sources (credit bureaus etc. Remember what you sign...) Or just use geographic income profiles.</p>

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<p>newmassdad...I don't get my information from college PR machines but from their audited financial statements. The best way to prove the point is to look at any elite LACs financials generally available on their web site. I like LACs as they are more 'pure plays' in the teaching business as the financials of major universities are materially obfuscated by side businesses such as research grants. For Swarthmore, the cost of educating a student is shown for the last 5 years in their statistically summary and last year it was $80,000. Same ballpark numbers for Williams and Amherst. The facts support my argument. I don't doubt that many schools are not as rich as the elite LACs and control costs much better. The tradeoff in educational quality is the beauty in the eye of the beholder. Finally, major research universities could use some improved financial reporting on the cost of educating an undergraduate like Swarthmore provides. However, my gut feeling is that undergraduate education is a loser on a fully allocated basis as many research universities (eg Pton, Chicago) have student teacher ratios of 4 to 1 versus Swarthmores 8 to 1.</p>

<p>Writing a $40,000 plus check is intimidating but don't kid yourself and think you are not benefitting from many donors!</p>

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<p>Newmassdad...The point you make about the 'full payers' subsidizing those on financial aids is flat out wrong and for a very simple reason...they don't have to! Most schools have endowments for financial aid that are restricted (meaning that they can't raid it for other purposes). Simply put, why would they raid the general fund for monies already endowed. Pure selfish interest (supporting the school's bureaucracy) prohibits them taping the general fund for financial aid. Parental paranoia alone supports your theory.</p>

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<p>WSOX,</p>

<p>You might want to re-read my post again. I have no quarrel with LACs, and stated so. Even so, it is interesting to look at the REAL story even at an elite LAC. </p>

<p>Take Swarthmore, for example. You can find their financial report here:</p>

<p><a href="http://www.swarthmore.edu/Admin/investment_office/2002_2003_Swarthmore_College_Financial_Report.pdf%5B/url%5D"&gt;http://www.swarthmore.edu/Admin/investment_office/2002_2003_Swarthmore_College_Financial_Report.pdf&lt;/a&gt;&lt;/p>

<p>Take a look on page seven, and you will see that they report "net student tuition and fees" of $37 million. Note, however, that this is AFTER deducting almost $15 million in student aid. The decision to award aid is an institutional one, done for reasons of social policy etc. A different approach to accounting might drop financial aid to an expense line. </p>

<p>So, their true gross receipts are closer to $52 million. Now, go further down, and note that the sum of all costs related to students (instruction, academic support and student services) totals $54 million. From my POV, student charges pretty well equals the cost of providing for that student. </p>

<p>That SWAT spends another $20 million on "auxiliary activities" and "Research and public service" is admirable, but done because they can, and probably because they must, in order to not show too much of a surplus.</p>

<p>Regarding your research U comments, you obviously haven't spent time as part of a research U. If you had, you might understand the problem with relying on student faculty ratios, for instance. You probably don't realize that most of those faculty that lead to the amazingly low 4:1 ratio are not involved in undergraduate instruction, so rightly show no expense to undergrads. If you only realized how many senior humanities faculty, for instance, rarely teach an undergrad course.</p>

<p>I won't engage in a debate of endowment restrictions etc., as that data is hard to come by, and I'd rather deal with data, not fundraising PR or speculation. I can tell you, though, that, as an academic insider, funds are restricted for many reasons, not just FIN aid. </p>

<p>I'm not surprised you find the economics of undergrad education hard to take. Most folks do, as we've been fed PR telling us the fundraising message for a long time. But effective PR is not the same as truth.</p>

<p>Sorry to be the bearer of such tidings.</p>

16

<p>
[quote]
That SWAT spends another $20 million on "auxiliary activities" and "Research and public service" is admirable, but done because they can, and probably because they must, in order to not show too much of a surplus.

[/quote]
</p>

<p>I disagree with this remark.</p>

<p>I think there is a strong case to be made that "research and public service" is an extremely valuable part of a student's educational experience at an LAC. Research at LACs typically involves close partnership between faculty mentors and student research assistants. If you read Dick Light's "Making the Most of College," you'll see that his large-scale student surveys and interviews strongly support undergraduate research with faculty mentors as more valuable than their classroom learning experiences.</p>

<p>As I understand it, one of the big selling points of Swarthmore is that any student who can dream up a worthwhile research project can probably find a faculty member willing to sign off on the proposal and can get generous Swarthmore support for the project, which could provide a budget for needed travel, equipment, data acquisition, and summer stipends.</p>

<p>As for "public service," an increasing number of colleges, including Swarthmore, support the concept of service-learning. Sometimes this is formalized as part of a for-credit class (e.g., when students do internships in community service organizations, read relevant literature, and write papers about their experiences.) Sometimes this is not part of a for-credit class, but many students still say that they've learned very important life lessons through their public service experiences. For example, a sociology or political science or economics student who works in a homeless shelter might later wind up writing a senior thesis on welfare reform or the effects of deinstitutionalizing mentally ill patients or something else along those lines, and she might find her experiences working with homeless clients adds a very important perspective to her project.</p>

<p>As for "auxiliary services," I'm not sure what those are, but I suspect they might include things like running the dining halls and dormitories, which certainly should be included in any balancing of student expenses against total student revenues.</p>

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<p>For a student without hooks, it is easier to get an admit ED or EA if you don't check the financial aid box. As many counselors on this board have informed us, the top schools use their early applications to meet certain priorities, such as recruited athletes, URMs, and legacy students. No too many spots left for top students who are not in those categories and who are requesting financial aid.</p>

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<p>newmassdad...if you don't think I have spent enough time around research universities, then let me counter you have not spent enough time reading financial statements! Yes, Swat gives $14.6 million in financial aid which is dwarfed by the endowment spending - $40.9 million and private gifts totalling $20 million. I don't how you twist those facts into somehow tuition paying students are footing the bill for financial aid (other than axe grinding). Finally, tuition, fees and room and board even after deducting financial aid is $37.3 million and is about half of spending on instruction, academic support, institutional support (igonoring auxilliary activities) which total over $75 million. Seems hard for you to accept that the $40,000 plus we pay in tuition is only a small part of the budget. Somebody has to pay overhead (like heat, power, and the President's salary) even if you choose to ignore it.</p>

<p>I have also spent some time at a research university. Yes, they have faculty on sabatical but so do LACs. My kid goes to one of the 4:1 schools. Her support from the faculty has been amazing. BTW her TAs include PhDs and one MD/PhD. Simply put, I think you should stick to the numbers and not tired old axe grinding. I will agree that major universitities could do a lot better of informative disclosure in their financial statements.</p>

<p>Finally, the page on the Swat web site you referenced is an old one (2003). The 2005 financials have been posted and again reiterate the obvious. Full tuition and fees is nowhere near full cost!</p>

<p>Sorry to be the bearer of the truth!</p>

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<p>wsox - When Carnigie Mellon announced their something like 10% tuition increase this year one reason given was the increase in Financial Aid. So while there may be some schools who spend more than tuition, I bet there are many which use tuition as a subsidy scheme from rich to poor.</p>

20

<p>WSOX,</p>

<p>If it makes you more comfortable believing the college PR machines, I say go for it! Heck, it's no skin off my nose whether or not we agree. It would help, though, if you read a bit more carefully. Take "sabatical" (normally spelled "sabbatical", I might add...). Where did this come from? What does that have to do with student faculty ratios, which was the original issue?</p>

<p>Time to move on. There are better ways to spend a day than such arguments.</p>