@stMachine : Call it what you want. That does not make it any less true.
And if a certain proposal to make public higher education “free” we will all be subsidizing those schools even more.
@TomSrOfBoston you’re quite right about that, nothing is ever “free”
Higher earners get gouged twice: once by the taxman and then by the schools.
But it is what it is…
No one is forcing you to pay for an elite education. If Harvard wants to charge 60k/yr and they have thousands of applicants who not only can afford to pay it but beg to be admitted, then they have no reason to change it. It costs Harvard more money to run the school per student than the full cost of attendance, so in effect, you are still being subsidized by Harvard
Harvard earns enough from its 37B endowment to enable all students to attend for free.
Higher education is not like any other product or service. Apples and oranges.
I had the same thought. OP, you sound like an intelligent person, so I’m betting that you fund your qualified retirement accounts to the max each year, before kicking in more money to your hefty non-retirement savings. What were you planning on spending that non-retirement savings on? Hopefully, paying for college for your kid(s) was part of the plan. You should consider yourself extremely lucky that you have the means to send your kid(s) to any college that they get admitted to and want to attend, without finances being a concern (unless you live an extravagant life now or plan to live one in retirement). Most families don’t have the options that you do.
Last I looked it was approaching $40 billion. Remember that Harvard is a registered charity and donations are tax deductible!
I corrected by typo in post #25. That should have read 37B, not 27B.
@GMTplus7 : I think I will choose to trust Harvard’s accountants/actuaries/investment advisers over you in the decision of how much to draw from the endowment each year to support the school. Yes, I expect Harvard COULD offer a free ride to everyone. For how long? That endowment contributes to capital improvements, etc., etc., etc. Those complaining here seem to miss the fact that EVERY student is being subsidized. Some are being subsidized less than others. You are not subsidizing those students the school chooses to give more aid to. The school is.
Why should there be a student ticket price or a senior discount or a child’s ticket at the movie when all are taking up one seat? Everyone should pay the same. Let’s get rid of those tax deductions for multiple kids while we’re at it.
I do actually agree that schools shouldn’t give need based financial aid. Why should student A get a better deal than student B? Student A may have no control over the family money, may have uncooperative parents who won’t help pay for college, can’t afford to pay for college but can’t get any aid. If the school wants to attract certain students, make it a merit award. If the government wants to do encourage students to go to college, make it a tax deduction or credit. Make public school tuition deductible but not private if it is ‘good for society’ to have people go to college. Dump the money into public universities or community colleges and lower the cost for everyone. I would rather the government give the Pell money directly to schools to make them much lower price for everyone than to give grants to the ‘poor’ and then have them pay. I say this and my kids qualify for need based aid, but I don’t think it is fair. A few schools have drastically reduced tuition in the past few years but also reduced merit and other aid, with the idea that everyone should pay basically the same amount, the posted tuition. Not sure how well that’s working.
It’s unfair, but so are taxes and especially the credits that go with tuition. If a single person has 3 students in college but makes $91k per year, NO tax credit (AOTC anyway). If a married person makes that same $91k (or even $150k), has a spouse and one child in college, gets an AOTC. The tuition for the 3 kids in college probably is more, but too bad. No credit. Not fair to treat two taxpaying families differently.
Why do we put up with this system? Because I’m not King. When I’m king, I’ll change things.
Because ticket yield pricing, if priced right, can result in greater overall revenue.
College FA, OTOH, is not about maximizing revenue. FA is just a revenue sink.
College tuition prices can be about maximizing revenue. FA is given to attract certain students. If the school attracts the students it wants, it can charge others whatever the market will take. Same with the movie ticket. If it can get enough full priced tickets, the owners can discount other. If the school can get enough full pay students, it can give FA to others.
You’re confusing FA with merit aid.
Actually, all discounts can be used as revenue enhancement tools, since they allow the college to practice price discrimination among the students who attend. Non-elite private schools probably cannot fill their classes with students able and willing to pay list price, so they apply discounts to attract students who would otherwise choose other colleges (merit scholarships) or students who would not go to college at all (need-based financial aid). This allows them to collect a high list price from just-ok students from wealthy families while the school can enroll the students it really wants at the top of its range to improve its academic reputation for future marketing purposes.
Elite schools that can fill their classes many times over with students paying list price presumably use financial aid as a marketing tool/expense, so that they can enroll elite students who come from non-top-3% income/wealth families (about half of their students, although even the financial aid recipients are mostly from higher income/wealth families, just not at the top 3% or so). It is important to them to enroll enough elite students from whatever level of family income background in order to keep up their academically elite reputation, even if they also enroll sub-elite list price students of the “hook” variety. They may also realize that a class composed entirely of those from top 3% income/wealth families would not be seen as socially desirable by many students, and may attract more political problems.
Of course, state universities’ financial aid and scholarship policies may be affected by their politically defined mission relative to state residents. But their lower in-state list prices function as an automatic subsidy for all state resident students to begin with, even without other financial aid or scholarships.
Presumably, you agree more with the state of Pennsylvania on this matter (minimal need-based financial aid for in-state students at the state schools, as evidenced by high in-state net prices for students from low income families and higher levels of post-graduation student loan debt) than the state of California (good need-based financial aid for in-state students at the state schools, resulting in lower levels of post-graduation student loan debt).
If you don’t like the way certain colleges operate, you can always choose to take your business elsewhere.
I’m not confusing merit and financial need, I’m saying make it all merit. Attract the students you want by paying for those talents be they rich or poor. Make scholarships for the different counties in the state, for the chemistry department, for art and theater and history. Make a merit scholarship for increasing the gpa from a 1.5 to a 3.0 if you want to attract students from urban schools who have turned their lives around. I like having economic diversity at schools, but it is getting to the point at many schools that you have rich and poor, but very little in the middle unless those student get merit aid because they can’t afford it by don’t get need based aid.
As I said, my kids do qualify for need based aid this year, but I would rather they were rewarded for their work and not my bank account or paycheck. They aren’t any more deserving than any other kid at the school, the numbers just worked for us this year, and the schools wanted them, so twisted and yanked and created and made all the aid work. Why not just call it merit aid and be done with it? Even better, why not reduce the price for everyone and treat everyone as a valued student?
Just my opinion. It will never happen
Maybe because a college education is not like every other product and service?
I feel your pain and frustration. My family is in a very similar boat and many universities have been eliminated because of it. It is very difficult for my DDs to understand when they are in the top 1% of stats and all of the “good” universities are off the table due to cost. Yes, we do have the money to pay for them but it is not in our value system to deplete our savings and risk our retirement (no pensions, has to be savings) and that is why we have the money to begin with.
What makes this so difficult is the number of my DD’s classmates who with lower stats are applying to those “good” schools and talking about all that free money. Their families drive new, expensive cars, annual exotic vacations, upscale homes and furniture. Some have not married their long term significant other and make just enough to show they are supporting themselves (about $40,000) but live in a million $ home. I’m sure they will marry as soon as the kids graduate. At least the CSS profile takes into consideration some of the large holes left by the FAFSA.
What keeps me grounded though is reading CC and the number of kids who are good students trying to better their circumstances. It is heartbreaking to read some of their stories and see the number of hurdles they have to clear to get into any school. Thankfully there is merit aid for my kids and both merit and need based for them. I wish the system could be made fairer as with taxes and health insurance (which is more than my mortgage) to benefit both my children as well the students truly in need, and the families that have learned to game the system, there would be less of a system to game. But for the time being, we do the best we can for our kids.
Thank you for letting me vent and I know I am fortunate to be in this situation.