public universities bad bargain for middle class

Paying for College
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<p>Kdog…your D stats are a fine example of how kids with good-but-not-top-stats tend to have fewer options for great aid and avoiding debt. That’s why many end up just commuting to their local state school…and maybe start at a CC first… The privates that give the best aid often won’t accept an ACT 27 without some hook or URM status. </p>

<p>For many “good students,” going away to school is a luxury…which parents have to either pay for…or borrow for. It’s a personal choice.</p>

<p>“s. As far as other OOS state public schools, I’m sure he could have gotten higher aid but with tuition double of the instate I don’t think it would have made that much difference”</p>

<p>Not true. If your son needed an OOS public safety school, there are some flagships that would have given very large merit (to cover the entire tuition). At my kids’ flagship, your son would have gotten at LEAST free tuition…including OOS tuition…and some other flagships as well. And, if he’s a NMF…even bigger merit. And, of course any Pell or other fed aid as well.</p>

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But that’s a moot point as he is attending a top private that offered more than that. ;)</p>

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<p>^^^</p>

<p>True…but I was talking about a financial safety school…in case he wasn’t accepted to a school with generous aid…not all high stats kids get accepted, so they need back ups.</p>

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<p>Getting into a no-loan top school requires some luck too. Students with higher EFC’s could still get some need based grants. On the other hand, many state colleges give out merit scholarship. If a student’s stats/EC’s allow him/her to get into a no-loan elite school, he/she will have no problem getting a generous merit scholarship from the state school. There may not be such a big difference, financially, for families with modest EFC’s. Yes, you may want to pay a premium for the elite school if the ranking difference of the two schools is significant and critical for the intended major.</p>

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<p>I live in New York and it is a myth that $200,000 is not “that much money” here. No, it won’t go as far as it would in Atlanta or Topeka, but that doesn’t mean that it’s not “that much money.” A family of four or five can live quite comfortably even in Long Island on $200,000 a year.</p>

<p>I live a comfortable lifestyle in Manhattan on less than a quarter of that.</p>

<p>As for schools that have no loan packages - we are talking about a very tiny subset of private institutions here, private institutions that are trying to level the playing field for lower-income families. At the vast, vast majority of institutions, upper-middle-class families have the upper hand when it comes to affording school.</p>

<p>njfootballmom: The overwhelming majority of Temporary Assistance for Needy Families recipients (which is what I am assuming you are referring to when you say “welfare,” if by “welfare” you mean cash payments to poor families) do work.</p>

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<p>^^Everyone can live comfortably on their own salary because you basically live within your means. So its all relative. Someone making 50k/yr is also paying a quarter of the real estate taxes, electric, fuel oil, mortgage etc. Unfortunately, just because you make 200k compared to someone who makes 50k, doesn’t mean that you have 150k/yr just sitting in the bank. Doesn’t work that way.</p>

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<p>I agree with Juillet. It’s quite possible to live decently on 200K in metropolitan NY/NJ/CT if you plan and budget carefully. It’s possible to afford an expensive college education for your kid if you’ve been saving money and maintaining your borrowing capacity. The tri-state area abounds with status consumption and keeping-up-with-the-Joneses mentality. People just have to resist all that, not get resentful, and keep their eye on their own financial goals.</p>

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<p>NJSue,</p>

<p>Juliet said she lives comfortably in Manhattan on less than a quarter of $200K. I wonder if her definition of comfortably includes being able to afford (without going into debt) health care, 401K, decent apartment and saving for rainy day (after all it is advisable to have one year of salary in a bank). Those are minimum requirements. I am not even talking about occasional outing (what is the point to live in Manhattan if you are going to stay home all the time) or vacation. I highly doubt it is possible on less than 50K in Manhattan.</p>

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<p>I agree NJSue. People can live comfortably on 200k 'if they plan and budget carefully." But contrary to what people are saying on this thread,even with cafeful planning and budgeting, 200k doesn’t make one a millionaire with tons of assets, summer house in the Hamptons, a mercedes and BMW in the driveway and vacations to Europe every Christmas. </p>

<p>Keep in mind that although there are those making 200k they are also footing the full price tag of any school their child goes to. Unlike the others making less who receive some compensation. So at the end everyone is equal. Once again its all relative. I have no problem with that. The reason I started this whole thing was just to say if everyone is equal and two kids both go to the same elite private school. Then the kid who got the eduation for free because they come from a family who makes less than 60k, should also have a student loan as part of their package, just like the kid coming from the family making 200k. All things should be equal. Everyone wants equality, right? Everyone wants to feel that rich or poor, a kid should be able to get an elite education, if they have the grades. So then no one should come out without some debt. At the end of the day, regardless of your families financial background, both kids will graduate with the same elite/prestigious school diploma. They now have the same earning power. Therefore they should both be able to pay off their debts.<br>
I’m not sure why that is so unfair or so hard to conceptualize.</p>

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<p>Dungareedoll wrote:</p>

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<p>Really? Which electric and fuel utilities offer this fabulous discount for people making 50k/yr?</p>

<p>Certainly, people on modest incomes aren’t usually living in 7,000 square foot mansions. But they may well be living in under-insulated modest homes that cost as much to heat and cool as a much larger luxury home.</p>

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<p>Homes that need new roofs, new wiring & new plumbing at some point because they were bought as “fixer uppers” only income never increased to the point that, that was easily doable but now it is only a matter of which crisis to tackle first.</p>

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<p>Dungareedoll,</p>

<p>Given my background (first generation immigrant who went to school in this country and now considered upper middle class) I was thinking a lot about what is the best way to ensure that everyone who qualifies has the same access to higher education regardless of their income. Even though I was a recipient of Pell grant back then, I don’t believe that Pell grant program in its current form should have existed. I was receiving aid for no other reason, but being poor - I think it is wrong. On the other hand, without that aid I had no idea how I would have been able to afford my education (coming from no loan culture I had no idea I could borrow). By the way, I still worked around 20-30 a week to be able to pay for gap between the grant and the cost of attendance, so when I hear that kids had to take loans to pay for food or housing because they can’t work and need to study, I shrug. Throughout my entire college career I only had one B (the rest were As) and it was only during my first quarter. So, it is very possible to maintain a gpa, go to school full time and work at the same time. I also worked full time during summers.</p>

<p>After thinking about current system, my solution is to stop providing income-based free aid and to provide every student with non-dischargeable deferred low interest loan with reasonable (perhaps based on income after graduation) repayment plan. This way, everyone can afford to go to college (because the repayment is affordable after graduation), but at the same everyone has a “skin in a game” and pays for their own education. Keep in mind, I am not talking about merit based or private scholarships. I am talking about federal and state based aid. I think this system is more fair. Education is the key to higher earning power, students should be responsible for paying for it.</p>

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<p>The UC system is considering something like this, with a low-interest deferred loan with payment tied to post-graduation income. On the one hand, I love this. I made my way through the last two years of undergrad at a UC on my own, through a combination of grants, loans, and work-study. It’s not possible for students to do that now and emerge with a reasonable debt load. This kind of plan would help a lot of low-income students.</p>

<p>On the other hand, it’s not simple to administer. The plan administrators have no idea how much will be repaid (UC’s plan would cut off repayment after IIRC 10 years in the workforce), because we don’t know what the employment picture will look like. What happens when people move to other states, stay home with young children, are unemployed? How do you pay for subsidizing the loans and administering the program?</p>

<p>Opening up the system to “all” students, so that everyone has skin in the game, is going to lead to abuses of the system. Students from well-off families have those families as a safety net. Even now it’s common for families who could afford to pay the full COA to have their child take a Stafford loan for skin in the game, and then pay off the loans in full upon successful graduation. Others will just repay the loan to give their child a fresh start. And if everyone, regardless of need, has the ability to take out very low-priced loans for college, then people will take the loans regardless so that the money can be invested elsewhere.</p>

<p>Dungareedoll, no one’s said on this thread that people are living large on household income of $200k a year. I’ve said that I don’t think it’s massively unfair that a kid from such a household graduates from a school like Stanford with some debt, while his friend from a household earning $60k a year graduates with no debt. I’m more concerned about when the $200k/yr kid graduates with some debt from, say, Boston U, and her $60k/yr classmate graduates with massive debt. Of course, that overly debt-burdened BU kid should’ve gone somewhere cheaper. Ditto for the Stanford well-off kid if the debt is too great. </p>

<p>Schools that offer all grants/no debt to poorer students are bidding for those kids. They don’t want another school to scoop up the next Sonia Sotomayor because some bright young woman has a choice between Princeton with $20k in loans or OtherSchool totally for free. Richard Nixon had to turn down Harvard on full scholarship because he couldn’t afford cross-country train fare. He carried a chip on his shoulder for the rest of his life about Harvard elites…and just look what that did to the country. :smiley: ;)</p>

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<p>juillet, you have obviously never been to Camden, NJ…I don’t think there is much working going on there…there are a bunch of guys having babies with different girls…the work ethic is not too strong from what I have heard.</p>

<p>If they work for their $ that is fine, my problem is the ones who have their hands out for every program that comes along. No reason on earth that those who are not watching small children cannot be doing something to earn their assistance.</p>

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<p>When our kids were babies we hosted an Australian au pair who told us about the funding system used in Australia public universities. If you were able to pay up front you got a discount on tuition (10 or 20%). If you didn’t have the money you could attend essentially for free, but after graduation the government would assess your income taxes at a higher rate for a period of time.</p>

<p>It seems like a pretty good system, although I just took a look at Wikipedia and it seems the government has since been tinkering with it in recent years, so maybe it also had flaws.</p>

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<p>The UC system is considering something like this, with a low-interest deferred loan with payment tied to post-graduation income. On the one hand, I love this. I made my way through the last two years of undergrad at a UC on my own, through a combination of grants, loans, and work-study. It’s not possible for students to do that now and emerge with a reasonable debt load. This kind of plan would help a lot of low-income students.</p>

<p>=============</p>

<p>The UC, Cal State and the CC systems should consider this instead of handing out so many Cal Grants. There are too many kids who go on to college simply because they can do so on gov’t aid (especially if they’re commuting) when they really aren’t ready for college or really going to finish. Knowing that they’d be getting loans instead of free money might make many pause.</p>

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<p>SlitheyTove, </p>

<p>I understand your reasoning. I just feel that if the loan is non-dischargeable, then the taxpayers (funding the cost of loaning) will eventually be repaid. Students, who will know that they will be on the hook for paying back the debt, will be more responsible with their choices of too. One thing I wanted to point out that the program should be administered by federal government, and not by each individual institution. This way it is harder to default (the repayment can be arranged through tax withholding).</p>

<p>I just don’t feel that current system is the right system (forget about fairness). To me it is a moral issue - when you take money from somebody (10% of tax-payer base in our case) to give it to somebody else (Pell grant recipient), in my world it is called stealing and I don’t care that the cause is a noble one. The road to hell is indeed paved by good intentions.</p>

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<p>lerkin, I see the grant system as a pay-it-forward kind of thing, not stealing. I got a great education (undergrad and grad) at excellent public institutions, supported in part by taxpayer-funded grants (Cal Grants, not Pell). Now I earn a comfortable :slight_smile: living, and I pay a significant amount of state and federal taxes. The system invested in me, and that investment paid off. Since I’m now on the other end, I figure that it’s fair that the system invest in the next generation, using my tax dollars.</p>

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<p>SlitheyTove,</p>

<p>I would agree with you if you and I were the norm and not the exception. </p>

<p>Because Pell Grants and state grants are not tied to GPA at college or progress towards obtaining a degree, there are very many cases when the money are wasted. I probably will support free aid for those who make satisfactory progress towards obtaining a degree. However, I will set the bar high. I don’t think getting a C, especially in student’s major, is satisfactory progress. It maybe a passing grade, but I don’t think we should be funding C students to attend college. From what I remember, even my below 3.5 but above 3.0 friends had very hard time to get recruiters interested at job fairs. And I was graduating in booming economy. If employers are not interested in C students, why should the taxpayers be interested in funding those students?</p>

<p>I also think that the purpose of the grant is to graduate, so those who drop out should repay the grants back. </p>

<p>I think rights and responsibilities go hand-in-hand. If we want to insist that College is a right, then that right should come with responsibilities. In my opinion, earning Bs and As and completing the degree is not too much to ask from a student getting free aid. This is the kind of investment in the future I will support.</p>

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<p>I think most of us do think that the grant system is a “pay it forward” system which is supposed to benefit society as a whole in the long run. That said, I do think it’s important to have a system that better “flushes out” students that really are just continuing high school on college grants and just wasting time and money. GPA, test scores, etc should be used to determine grant eligibility.</p>

<p>There are kids who’ve posted on CC that have “done the math” (actually have heard from pals) that they’ll get full Pell, Cal Grants, and other aid…and if they commute to their local CSU or CC, they’ll get cash back to do what they want with. The COAs include quite an allowance for R&B even when the kid lives at home for free. </p>

<p>Frankly, I’m against tax-payer grants that go beyond tuition, fees, and books for instate publics. As far as I’m concerned, anything else should be covered with loans and work-study as an incentive for students to live at home and commute. Perhaps there can be some waiver for those who live in rural areas without commuting options. </p>

<p>It’s not right that the family whose income just exceeds free aid must have their kids commute, while the family whose income comes just under the line for aid, can have their kids “go away” on tax-payer dollars. </p>

<p>Look what happens with the Blue and Gold promise for UCs. A family that makes $78k per year gets free tuition, while the family who earns $81k doesn’t. You can’t tell me that the $81k family can afford to pay $13k in tuition while the family that makes $78k can’t pay a dime. In truth, the $78k family can use some family funds, student loans, and work study and their child can go away. </p>

<p>And, I would like to see the Fed student loan amounts change because it doesn’t encourage kids to go to a CC first if money is an issue. Right now, the limits are:</p>

<p>frosh 5500
soph 6500
jr 7500
sr 7500</p>

<p>Total about 27,000.</p>

<p>But what if the student needs more than 7500 per year for jr and sr years…which is common for a child who starts at a CC. Instead…students should be allowed to borrow LESS for frosh/soph years (maybe $1000 per year) and go to a CC, and then they could borrow $12,500 for each of their junior and senior years. And, maybe allow for those kids to borrow $15k per year for junior and senior years. I think this is better anyway since a kid who drops out after frosh or soph years won’t have borrowed much.</p>

<p>Right now, the system is flawed because the student who starts at a CC and then tranfers is often gapped too much. Allowing them to borrow more at that point (because they borrowed less/nothing during the first 2 years) would be better.</p>