See Fox New's program, "Why do colleges cost too much?"

Parent Cafe
1

<p>If you go to Foxnews.com, you will see a lot of info on college education. For those that didn’t see the show, Fox presents various arguments such as:</p>

<li><p>Tuition might be too low for some schools because of the low acceptance rate. Higher tuition could thus be justified at these schools.</p></li>
<li><p>Tuition is too much because professors do too much research, much of which of questionable value, and too little teaching.</p></li>
<li><p>Schools provide too many expensive perks such as large climbing walls, state of art exercise facilities etc.</p></li>
<li><p>This one was interesting: Providing too much student aid and loans by the federal and state government actually makes tuition higher because kids and parents have more potential money to spend.</p></li>
<li><p>The FASFA form is a major culprit for tuition increases. They used an analogy of buying a car. If we had to submit the ultra-intrusive information that a FASFA provides to a car dealer before they quote us a price, the price would be much higher than if this information were not provided.</p></li>
<li><p>Some experts believe that if we take the cost of tuition, room, board and fees at expensive schools and invest that money in a mutual fund, people might be better off working and invest the money from a long-term earning prospective.</p></li>
<li><p>It rarely benefits an individual to go to a private school over an instate public school unless they are going into a very lucrative profession. For example, they interviewed someone who was with an association who represented colleges, and he criticized a student who incurred over 80K in debt to attend a private school and specialize in special education. Their premise is that the cost of lower alternatives for the same major should be seriously considered before someone going to an out of state, more expensive school. </p></li>
</ol>

<p>In fact, upon interviewing some kids who have large debts as a result of their schooling, many would have chosen a less expensive school had they been a bit brighter about the problem!</p>

<p>I should note that many reading this may not agree with these premises or arguments,but I thought that every parent and student should consider these points.</p>

2

<p>I watched the program. I am curious about the FAFSA comment. Schools aren't compelled to abide by the EFC on FAFSA, I understand that. I thought the private borrowing families are willing to undertake is what was driving the rising tuition. Apparently I didn't understand. Could you explain further?</p>

3

<p>On #7:</p>

<p>I'm assuming that whether or not it's the parents who are carrying the loans, money must be borrowed to pay for the most expensive colleges. My S had two student teachers doing their practicum. They were absolutely fabulous. I was very glad that these very bright young women chose to go into education. One had a degree from Princeton and one from Georgetown.<br>
I don't think either felt that the expenses their family incurred to subsidize their studies could have been better spent in some other way.
Neither of my kids will be going into a high paying profession. But I do not regret for one minute paying full fare at two expensive colleges.</p>

4

<p>Marite, Yes, you are right. However, maybe those kids didn't have to take out debt to attend school. I would imagine that the experts presented at Fox News would say that if a parent could afford the tuition then it isn't as much of a problem. If those students did take out a lot of debt, it will be interesting to see how they can pay it back teaching.</p>

<p>Hazmat, my take on the FASFA comments is that whether schools abide by FASFA or not isn't relevant. They just become aware of the finances of the parent and kids in order to determine whether to charge more in tuition overall.</p>

5

<p>Taxguy:</p>

<p>My kids did not, but we did.</p>

6

<p>Marite, when you say "you did," did you mean that you took out debt , which arose from college costs? If so, college costs were MUCH more affordable many years ago than now, which was a point of the program.</p>

7

<p>Supply and demand suggests strongly that tuition at top 50-100 private colleges and universities is very significantly underpriced. Don't you think it odd that Faux News didn't even acknowledge that we supposedly live in a "market-driven" economy?</p>

<p>Colleges, of course, know that, and know that they are underpriced, which is the main reason why tuition goes up faster than inflation. And (per Veblen), the theory of the leisure class suggests that as tuitions rise, there will be MORE applicants, not fewer, as attendance becomes more prestigious. Several schools - notably NYU and Georgetown - have become more prestigious with little change to their academic programs (outside of a few specialties) but major changes to their pricing structures. URichmond is now trying the same "experiment".</p>

<p>As to whether it is "worth it", well there are an awful lot of disappointed full-pay customers out there who would be delighted to fork over the funds for their kiddies. And when you think about it, hey, what else is the money for?</p>

8

<p>Taxguy, I think Marite means that she borrowed to pay for her kids' college (at today's prices). She is simply pointing out that whether or not the kids borrow, the parents usually do. I'd note that while the amount of loan funds available to students through federally supported programs is very strictly limited (example, only $2625 for Stafford loan for the first year), there is no cap on the amount available via the PLUS program, which allows parents to borrow up to the full cost of attendance.</p>

9

<p>Mini, yes, you echo what the Nobel Prize winning economist said. Due to market forces, if a college gets too many applicants, it is charging too little. Thus, the top schools are in effect underpriced. However, the news article noted that if these kids come out with substantial debt then they may have a tough time paying it off. Again, this isn't my thesis but that of some Fox News experts.</p>

10

<p>Well, debt is their choice, isn't it? People make stupid financial decisions all the time - or smart ones (you can argue it both ways).</p>

<p>And if the colleges charged more (and they are, and they will), there is more money to give away as "financial aid". Princeton did this neat little trick (not to pick on them in particular): they raised tuition roughly 20% over a five-year period, and then gave 15% of it back as "need-based aid" to "eliminate loan expectations". 70% of those receiving this new aid were students with family incomes above $100k. It looked like the size of their average grant went up; it looked like they were getting more "economically diverse", as a larger percentage of students received "needbased aid". But it was mostly smoke and mirrors, and they ended up with more money in the kitty.</p>

<p>Good press, though. And if I were a college prez, I'd do exactly the same thing (except I'd raise tuition faster so as to increase the applicant pool.)</p>

11

<p>Taxguy:</p>

<p>Calmom is right. But my point is that I am glad that some young people who had the chance to attend some very expensive and excellent colleges choose to go into professions that are not high-paying. One of my kids' teachers in k-8 was working toward a Ph.D. at the Harvard Graduate School of Education. He now has a Ph.D. and is still teaching 6th grade.</p>

12

<p>my sisters were into the arts stuff growing up my oldest into photography and middle into painting and fashion my oldest went to art institute of boston at lesley u for photography my middle at marymount college of fordham in westchester which is closing for fashion merch both 4 around 30k middle sister on 10k merit scholarship other was cost of aib w/ there jobs(associate photo editor at seventeen and part time visual stylist/dalk walker i know but it fills gaps till she goes full time and she likes it and she just got her own one eyed 5 y/o pug) y im mentioning this is b/c if we werent more then definetely financially capable of taking on the 30k price tag(even more it will b for me they will be fine we make enough money) my sisters probably would have trouble paying off there loans probably not my oldest(40k/yr job plus benefits..) but my middle b/c its a pt job plus a random one...</p>

13

<p>I believe that the story has the follwoing link:</p>

<p><a href="http://www.foxnews.com/story/0,2933,210452,00.html%5B/url%5D"&gt;http://www.foxnews.com/story/0,2933,210452,00.html&lt;/a&gt;&lt;/p>

<p>Some interesting figures:</p>

<p>Since 1999, how many undergraduates finished in four years?</p>

<p>• The U.S. Department of Education's National Center for Education Statistics (NCES) claims that only about 40 percent of students graduate from college in four years. </p>

<p>What is the amount of direct financial aid that the federal government gives to students?</p>

<p>• Public Schools: Average total tuition and fees at four-year public colleges and universities in 2005-06 are $5,491, $365 (7.1 percent) higher than they were in 2004-05. Average total charges, including tuition, fees, room and board, are $12,127 — approximately 65 percent of your average family's income. </p>

<p>• Private Schools: Average total tuition and fees at four-year private colleges and universities in 2005-06 are $21,235, $1,190 (5.9 percent) higher than they were in 2004-05. Average total charges, including tuition, fees, room and board are $29,026 — approximately 27 percent of your household income.</p>

<p>• From 1998 to 2005, the total federal aid, which includes grants, loans, work-study, and education tax benefits, given to finance post-secondary education expenses are as follows (in millions):</p>

<p>– 1998-99: $48,791
– 1999-2000: $53,087
– 2000-01: $56,054
– 2001-02: $62,612
– 2002-03: $72,554
– 2003-04: $83,311
– 2004-05: $90,068</p>

<p>I am wondering how many people will be surprised by the change in spending since 2000, especially since it does not carry the same theme as the overhauling of the student loans.</p>

14

<p>Xiggi notes,"Average total tuition and fees at four-year private colleges and universities in 2005-06 are $21,235"</p>

<p>Response: Egad! I must have looked at the wrong private schools for my daughter. Most of these had tuition and fees abot the $21,235 mark. Even many state schools charged more than this for out of state students.</p>

<p>I wonder if they were filtering in community colleges into the averages and other subsidized schools too such as BYU.</p>

15

<p>Taxguy, take it to the ... source:</p>

<p><a href="http://www.collegeboard.com/prod_downloads/press/cost05/trends_college_pricing_05.pdf%5B/url%5D"&gt;http://www.collegeboard.com/prod_downloads/press/cost05/trends_college_pricing_05.pdf&lt;/a&gt;&lt;/p>

16

<p>Its not so much the FAFSA but the availability of guaranteed student loans, unsecured, without qualification for need, and below market. The loans may actually artificially increase the COA.</p>

<p>GWB's Academic Competitive Grant, is perhaps another subsidy to the serfs in exchange for future taxes for our current deficit spending. Of the billions that will be spent on this program, how many more engineers and other professional critical need occupations, will we get? I don't think the law of large numbers work well in getting more students.</p>

<p>A few of ds BSME classmates were recruited and hired in the financial field in NYC. I am led to believe that engineering is the path and not economics or business if you want to get into the world of making money.</p>

17

<p>
[quote]
My S had two student teachers doing their practicum. They were absolutely fabulous. I was very glad that these very bright young women chose to go into education. One had a degree from Princeton and one from Georgetown.
I don't think either felt that the expenses their family incurred to subsidize their studies could have been better spent in some other way.

[/quote]
</p>

<p>It's great that they valued the education they got so highly, but it's possible that they could have gotten an equally good education at U of Virginia, William & Mary, Berkeley, Michigan, UNC, Wisconsin, or a number of other excellent state schools--or any number of Canadian schools (And, as mini is fond of pointing out, the funds freed up by switching to one of those excellent schools could have financed all sort of extra educational experiences, including travel abroad, etc.)</p>

<p>They have no way to be sure they might not have gotten an equally good or better education at any number of other schools, because--after all--they only attended the one they attended.</p>

<p>The Mathematical Association of America annually honors outstanding teachers. It is interesting to note that</p>

<p>a) many of them are professors at public universities (or relatively low cost private institutions)</p>

<p>b) many of these outstanding teachers (including some who currently teach at expensive private colleges) themselves attended public or lower cost private colleges for their own undergraduate education.</p>

<p><a href="http://www.maa.org/awards/Haimo_Recipients.html%5B/url%5D"&gt;http://www.maa.org/awards/Haimo_Recipients.html&lt;/a&gt;&lt;/p>

<p>The bottom line: at least in math, there are outstanding teachers everywhere, and those outstanding teachers got their education in a wide variety of institutions, including a number of relatively inexpensive colleges.</p>

<p>For outstanding research mathematicians, the picture is rather different. Most (though not all) American winners of the Fields prize teach at expensive private universities and most also got their undergraduate education at expensive private colleges or universities.</p>

<p>Then too, there are intangible aspects of the value of one's education that do not show up in awards for teaching or research. </p>

<p>I had the great good fortune to attend an excellent but expensive private LAC, thanks to generous financial aid. Some of my siblings and their spouses attended U of Va and William and Mary, also at very reasonable cost, thanks to in-state tuition.</p>

<p>All of us treasure the education we were fortunate to receive.</p>

18

<p>Wisteria:</p>

<p>The point of my post is not to suggest that a great education cannot be obtained at some wonderful state schools--though not all. I used the example of Princeton specifically because it provides need-based aid. So if the parents aren't extremely wealthy, they will have to borrow to fund their child's education unless the student gets financial aid from the college. </p>

<p>If they looked at education solely in terms of return on financial investment, then a Princeton education was not worth it. But, I for one, am glad that a Princeton-educated woman chose to become a teacher and did her practicum in my son's class. I assume that she had other career possibilities. I have read too many articles suggesting that ed schools attract weaker students. If k-12 teachers are to get more respect, they need to include more people like this young woman into their ranksm as well as graduates of UVA and W& M, etc... The majority of teachers, however, are not from UVA or W&M or Princeton.</p>

19

<p>
[quote]

If they looked at education solely in terms of return on financial investment, then a Princeton education was not worth it. But, I for one, am glad that a Princeton-educated woman chose to become a teacher and did her practicum in my son's class. I assume that she had other career possibilities.

[/quote]
</p>

<p>I'm also glad that well educated students choose to become teachers, despite the relatively low financial rewards associated with such careers.</p>

<p>I think there is a very strong case to be made for society to reward such choices by forgiving some portion of student loans for those students who take relatively low-paying jobs in teaching or other forms of needed public service.</p>

<p>(Back in the 70s, it used to be the case that teachers got 10% of their principal on Federal student loans forgiven for each year they spent teaching in a public school, with double that rate for serving in troubled inner city schools.)</p>

20

<p>I saw the program. It was tough to reconcile the decision of the young lady going 80k into debt to obtain a degree in special education at the Unniversity of Scranton. I'm sure that's a fine school, but I don't think she would have been any worse off going to Penn State and obtaining the same degree and incurring far less debt. As I understand it special ed. teachers are in demand regardless of the institution they attended. 80k is a huge burden with a starting salary of 30k. She greatly regretted her decision and inferred she had been led into it by financial aid people who were less than forthright with her. But, as I'm sure someone will point out, at the age 20 or 21 let the buyer beware. Most teachers must pursue a masters degree over time. How will she fund that? As the OP said, rock walls, indoor kayaking pools, on campus health salons, all contribute to the escalating costs of education but what was really startling was the fact that over the past 30 years administrative staffs at many colleges have DOUBLED yet the amount of students enrolled remained relatively unchanged. Professors teach less and less opting for research the subject of which is often insignificant. The program also profiled the young man who started the company "Geek Squad". Now a multimillionaire, this young man left the Unniversity of Minnesota disgusted at what was going on. Huge lecture halls, TA's doing most of the teaching, very little Prof-student involvement, etc. One family whose daughter was attending SUNY Albany was taken aback by some of the associated fees. For instance it was mandated they pay a $500 "health services fee" even though thier daughter was covered under thier health insurance. This program was an eye opener.</p>