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<p>…how pretentious of your extended family.</p>
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<p>What a novel concept for attending an institute of higher learning: being surrounded by excellent students…</p>
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<p>No, we’re talking about “institutional” merit aid, i.e., the university’s own funds, not federal or state money. The institutional funds probably include some endowed scholarships, some payout on unrestricted endowment, some annual giving by alumni and other financial supporters, and some recycled tuition dollars (i.e., tuition paid by other students, including students with unmet need). It probably also includes some fraction of the money appropriated to the university’s general fund by the state legislature. It would include federal dollars only indirectly–e.g., from tuition paid by low- and moderate-income students supported by federal Pell grants, or tuition paid by student borrowers of federal student loans, or funds the university siphons from federal research grants in the form of"indirect cost recovery," essentially an intra-institutional tax on research grants that goes to support general university overhead (although Alabama has a pretty tiny research budget of only $50 million or so, so ICR is probably a pretty small factor in the university’s overall operating budget). All of this is considered the university’s own money.</p>
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<p>Well, not so much. Alabama’s football program brought in $82 million in revenue in2011-12, according to the NCAA, making it one of the highest-grossing programs. But it also spent by far the most among Division 1 football programs, $36.9 million, in part due to high coaching salaries and in part due to unusually large numbers of non-coach administrative support personnel within the athletic department. Still, that left a surplus (profit) from football of $45.1 million, good for 5th place after Texas, Michigan, Georgia, and Florida. </p>
<p>But the rest of the athletic department eats up most of that surplus. The total athletic department budget at Alabama is somewhere in the vicinity of $100 million. As at most schools, only football and men’s basketball are profitable, but Alabamas football profit is roughly 10 times the size of its basketball profit. All other athletic programs lose money. Alabama’s athletic department does sometimes generate a small surplus, some of which may go to the university’s general fund, but it’s a pittance compared to the sums going through the athletic department, and an even tinier fraction of the university’s overall budget. Alabama reported a total athletic department surplus of $13.9 million in 2011, but I’m not sure all that money went to the university’s general fundhard to tell from their financial statements, which seem to be deliberately opaque about athletic department spending. Many athletic departments accumulate some or all of any surplus they generate for their own future use, e.g., for future facilities. But even if the entire athletic department surplus went to the general fund, the Tuscaloosa campus generates about $330 million in tuition revenue, and gets about $140 million in legislative appropriations toward a total budget of about $750 million. Bottom line, this is a pretty tuition- and appropriations-dependent school. Football more than pays for itself and supports a lot of other athletic programs, but very little beyond that.</p>
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<p>Are you talking about the Crimson Tide Foundation? Thats a foundation (with an ambiguous relationship to the university) created for the express purpose of supporting Alabama Crimson Tide athletic programs. It generates very substantial donations from Alabama sports boosters, showing revenues far in excess of expenditures, and it does apparently fund some portion of the universitys athletic department. How much, if any, of that money finds its way into the universitys general operating budget, however, is unclear. If you have data on that, Id like to see them, but until someone shows me the money trail, Im going to be skeptical that any of the foundations money goes to anything but athletics.</p>
<p>This thread is supposed to be focusing on private colleges wanting to reduce merit aid. IMHO, I think, if the trends that are being reported lately are true and continue, that there will be an increase in merit aid from private colleges in order for therm to keep their enrollment up. It would be nice to see prices stabilize and even go down, but I think that what all but the most sought schools will have to be doing in order to get enough students is to discount. That is what they are doing anyways. I think they will be practicing even more directed enrollment management, being more need aware in terms of admissions and using merit money even more judiciously to entice those student who can pay to come. Instead of lowering the prices over all, fewer students will be full pays, and they will be the ones at the bottom of the applicant pool in terms of academic profile; the ones who will be delighted to come to the school and whose parents can and will be happy to pay full fare. Those who are better qualified will get a discount. Financial aid will be more geneorus to those who are particularly desired and/or have little rather than a lot of need. All of this is happening right now, and I predict it will happen even more.</p>
<p>Another interesting tidbit: almost all of Alabama’s merit aid goes to students without financial need. According to the school’s 2011-2012 common data set, 4,675 students with no financial need received institutional non-need-based aid (other than athletic scholarships) with an average award of $7,798. That adds up to $36.5 million, out of the $40.3 million the school gives away in non-need-based institutional aid. That’s over 90% of the merit money going to students without need.</p>
<p>This suggests that while Alabama buys a small number of students with high stats (but not enough to move the needle very far even on its 75th percentile stats), the more important role played by merit aid may be to buy OOS full-pays by offering a modest discount off the OOS sticker price. Alabama does offer some big merit scholarships, including some at full tuition, but most merit awards must be rather modest—say in the $3K to $5K range–if the average merit award is only $7,798. OOS tuition is now about $23,000. For each OOS full-pay (or full-pay less merit) Alabama draws with a $3K or $5K award, it would net around $18K to $20K in tuition, roughly double the tuition it would get from an in-state full-pay (around $9K). So to that extent, it may reflect a shrewd business practice: the big full-tuition awards might be seen as a “loss leader,” something to catch the eye of OOS students (and their parents); that brings in a few high-stats kids at a high cost-per-student, but it also puts Alabama on the map with a lot of other OOS families, including a lot of full-pays (or full-pays but for the modest merit award) who bring in enough additional tuition revenue to more than pay for the cost of the merit scholarships.</p>
<p>From this perspective, the most charitable view would be that the $40 million or so that Alabama spends annually on merit scholarships, 90% of it going to students with no need, is not necessarily money that would otherwise be available to the institution to provide need-based aid to state residents, because it’s coming from the incremental revenue coming in from OOS students, including those enticed by modest merit awards.</p>
<p>To be clear, though, my own preference would be that they were similarly resourceful in finding ways to help students with need fund their college education, instead of hanging them out to dry with unsustainable amounts of debt. I can understand (though I don’t necessarily agree with) the argument that says the bottom-performing students shouldn’t be in college at all; fine, then tighten admissions standards and don’t admit them. But the current policy seems to tread perilously close to one of cynically enticing lower-achieving students to attend college by offering them admission to the state flagship, then using them as a cash cow (mostly on borrowed money, but partly on federal Pell grants) to generate tuition revenue, some of which may go to help fund merit awards for higher-achieving students who have no financial need.</p>
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<p>Agreed. And this will send many, perhaps most of the less well-capitalized private schools into a death spiral as they have no substantial source of income other than tuition, and if that starts to erode they’re in deep trouble. It will lead to program cuts, deferred maintenance, rising s/f ratios, and a host of other ills that will make them less desirable, forcing them to offer even deeper discounts, setting off even deeper cuts, and so on in an endless vicious circle of decline. </p>
<p>Be careful what you wish for.</p>
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This is the sort of thing I was talking about. You don’t want to be lured in by an honors program only to find that it doesn’t amount to much. If Alabama is doing a good job of providing a true “honors” experience to its honors students, that’s great. It’s my impression that Maryland does a pretty good job of this as well. I still say that the bigger gap there is between the highest and lowest achievement students, the closer you’d better look at this factor–it probably doesn’t matter much at UVa, for example.</p>
<p>There may end up being fewer private schools, and there may be a great reduction in amenities and offerings at some of those private schools that are left. The strongest schools, I don’t think will be affected. It seems to me, even in this economic downturn, applications are up at those schools. What I do see in middle and upper middle class families is an unwiilingness to stretch the dollars, borrow the money for schools that are not WAY up there in name recognition and prestige. THey will be willing to borrow at usurious rates, sell things, work another job for Harvard, for example but for ABC Private U that costs about the same,…unh, nope. State U or a XYZ Private College that offers some merit money are where more kids are going when it comes down to that.</p>
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<p>You could say the same about a past employer(financial firm) which stopped hiring undergrad business majors from schools other than the Wharton/NYU-Stern elite level because they got burned by previous lower-level undergrad b-school grads due to their abysmal demonstration of proficiency in basic math or coherent writing to the point of embarrassment in front of more senior executives and clients. </p>
<p>Or the NYT/Chronicle article here:</p>
<p><a href=“The Default Major: Skating Through B-School - The New York Times”>The Default Major: Skating Through B-School - The New York Times;
<p>bclintonk–I posted a link a few pages back, Alabama has the second highest Net revenue for their athletic programs in the country…</p>
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<p>Well, maybe they’re pretentious too. Their pretentiousness doesn’t make your family’s beliefs not pretentious. But more to the point, your family’s beliefs aren’t a data point that anyone outside your family cares about.</p>
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<p>Last I checked, it’s not pretentiousness if an employer stops hiring from certain schools/departments because their graduates have had a consistent pattern of burning said employer in the past due to demonstrated deficiencies in their educational background which negatively impacted the jobs they were supposed to be performing.</p>
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<p>You see lots of different figures on this. Many cite US Dept. of Education figures which omit some expense items from their calculations.</p>
<p>Most recent publicly available NCAA figures are for 2010-11. They show Alabama’s athletic department with total operating revenues of $124,498,616 and total operating expenses of $105,068,152, for a net surplus of $19,430,464. But that includes as a major revenue item “contributions and donations” of $30,082,101. Those would be contributions and donations specifically to support the athletic department; the Crimson Tide Foundation, a 501(c)(3) organized as “the charitable arm of the University of Alabama Department of Athletics,” promises its donors that 100% of their donations will be used to support the athletic department and its student-athletes, so I don’t see how that money could be siphoned off to support the university’s general operations.</p>
<p>In fact, the NCAA data for 2010-11 show money flowing the other way: another major revenue stream for Alabama’s athletic department that year was a “university subsidy” of $5,235,300, making Alabama’s athletic department the only recipient of a substantial subsidy from its university’s general fund among the top 10 revenue-generating athletic programs. The only other top 10 athletic revenue-generating school to receive any subsidy from its central administration was Michigan, which got a token $20,122. No. 11 Wisconsin, however, did get $4,553,901, more or less in the same ballpark as Alabama. In fact, Alabama’s general fund subsidy was the largest of any of the top 30 athletic revenue-generating schools for which data are available (though some private schools like Notre Dame, Stanford and Duke don’t report the details of their revenues and expenditures).</p>
<p>And that wasn’t a one-time cash infusion. Alabama’s athletic department also received university subsidies of $4,980,000 in 2010; $4,101,515 in 2009; and $4,101,515 in 2008.</p>
<p>I have no doubt that Alabama’s athletic department is “profitable” in the sense that it reliably generates a substantial surplus of revenue over current expenditures (though as a not-for-profit enterprise, it’s not allowed to call that surplus a “profit”). But as best I can tell, that money stays in the athletic department and does not fund non-athletic programs. In fact, there’s a pretty substantial flow of money in the opposite direction, with the central administration continuing to generously subsidize an athletic program that arguably doesn’t need the money because it’s got plenty of other revenue sources of its own.</p>
<p>It seems there are Antitrust considerations in play for why the Ivys don’t award merit aid-- they are avoiding a bidding war for the choicest candidates:
<a href=“http://apps.americanbar.org/antitrust/at-committees/at-exemc/pdf/tradeorcommerce.pdf[/url]”>http://apps.americanbar.org/antitrust/at-committees/at-exemc/pdf/tradeorcommerce.pdf</a></p>
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<p>^^^WOW! so all the loudly proclaimed altruism, the self congratulatory pats on the back for being institutions with great social conscience, for being the good guys because of an authentic belief structure that mandates assisting lower SES… is due to…a LEGAL MANDATE. A mandate which was the direct result of initially greedy grabs for ‘the best of the best’.</p>
<p>A years’ cost 60K…the gerrymandered final fee structure…priceless :D</p>
<p>Funny thing…it was the government implementation of wage restrictions that resulted in our current system of employer sponsored health insurance. ( it was a benefit to entice the best of the best because wages were sset). We’ve seen the end result of THAT fiasco. Now our universities are in the same boat, floating down the same river…to a cliff.</p>
<p>It is already bad enough that many private scholarships require financial need. How is the (upperish) middle class who already aren’t getting Financial aid supposed to afford school?</p>
<p>They’ll sacrifice and or go to state schools. Elite colleges are luxury goods. Where is it written that they must be easily affordable to everyone without breaking a sweat? In my area, many kids to to comm college first 2 years the to state flagship. That’s how they afford it.</p>
<p>PG: So true, elite colleges are a luxury good. The problem I see, is that this luxury good is marketing itself in such a way that a large portion of the ‘suitable’ student body is clearly, intentionally and directly priced out of the market. This particular financial class of student has been deemed in need of breaking a sweat. The upper portion just writes Skippy a check, buys a new 85K car and heads off on a vacation. The lower portion is subsidized to the point of no sweat needed. As private institutions - that is most certainly their right. </p>
<p>Those that ‘won’ in the housing market were the ones ahead of the curve. Those that lost did so because they got sucked into the whirlwind of enthusiasm, and panic. Enthusiasm because EVERYONE was doing it, it was THE RIGHT THING and the value and upside potential was guaranteed. Panic…because of the perceived shortage of product. So,normally sane and smart people bought at prices that made absolutely no common, financial of personal sense. And, our government structure not only supported this mania, it fueled it. IMO… it is just this same demographic that is now chasing the elite, fund it at all costs, college dream.</p>
<p>I see the current situation with college costs in the same light. The PANIC to get your seat before the limited resource is GONE is palatable. The willingness to sacrifice and burden parents and students with loans is now considered noble. At some point a service, commodity or resource has been priced past its actual value. The smart ones see this and just get of the crazy bus. The panicked will chase the bus at any and all risk - with a high probability of winding up hurt and damaged.</p>
<p>^^I have to agree with your last couple posts dietz.</p>
<p>Are you talking about the Crimson Tide Foundation? T</p>
<p>No, I’m not. I’m talking about the Athletic dept. So, everything you wrote about CTF is irrelevant.</p>
<p>*It is already bad enough that many private scholarships require financial need. How is the (upperish) middle class who already aren’t getting Financial aid supposed to afford school?
*</p>
<p>Going away to school is a luxury in most cases. If you want that experience you may have to either pay for it or find academic merit scholarships to help with costs. </p>
<p>I find it funny when people write, “X school expects my family to pay $60k”??? No, they don’t expect YOUR family to pay anything. They have a price and if you want to pay it, then pay it. If you don’t, then “shop” elsewhere. </p>
<p>I don’t freak out and say, “Mercedes Benz expects me to pay $60k for the car I want.”</p>