All I can say is lots of folks spend like 1%ers so I hope they have parents in that bracket.
I going to see if I can find the article, but I had read that the most popular private colleges could double their current tuition rates and that they would still have enough applicants to fill a class.
“At least your child doesn’t want to go to Tisch at NYU. If they did, you would be set back $80,000 per year. Like literally, $80,000 per year. So for those of you who were wondering, robbery is legal.”
NYU’s sticker price isn’t remotely robbery. This is the product – an education at a school in NYC, which is a compelling draw for many people. Pay the sticker fee, or don’t. It’s no more “robbery” than going to the Maserati dealership or Neiman-Marcus and being unable to afford what’s on the selling floor. That doesn’t make it robbery - it just makes it not-for-you.
Separate issue, but why do these interactive maps/tables look at income without considering assets/savings? It would be hard to do, for sure, but looking at just income misses a lot of information. Makes me think of the 3 little pigs. Those who are able to scrimp and save for a rainy day are less constrained by living from earned income alone.
The number of US households has more than doubled since 1970. Therefore the raw number of US households in the top 1% has also more than doubled, while the number of available seats in the “top schools” has not doubled. Taken together with increased financial aid on the bottom end, there are probably fewer seats for full pay students. Increased demand with flat or declining supply. What bubble? This is econ 101.
@romanigypsyeyes, those are metro areas, and any metro area of a decent size will have a wide distribution.
@bp0001, however, the number of births per year in 1952 (so those in the 1970 HS class) is about the same as the number of births in 1997. So there are still about as many US-born kids now as in 1970 (if you don’t count internationals and immigrants). Granted, demand by those groups may be keeping the price high at elites.
the 20-24 age group in the US census has increased approximately 26%. Add in the increase in internationals and demand has far outpaced supply for full-pay spots.
@bp0001, from what time to what time? If you are saying from 1970 to now, the places at Ivies/equivalents have increased by as much or more. In fact, I believe more than 26%.
@jym626, I was also thinking that. A 5%er can afford a pricey school if they were disciplined enough to save early and significantly.
http://nces.ed.gov/programs/digest/d07/tables/dt07_178.asp
Between 1970 and 2005, the number of bachelor’s degrees awarded has roughly doubled. BAs awarded to females increased by about 250%. Male degrees increased by about 40%.
Caroline Hoxby researched the question of college selectivity. https://www.aeaweb.org/articles.php?doi=10.1257/jep.23.4.95
Full paper at link, for those interested.
[@jym626, I was also thinking that. A 5%er can afford a pricey school if they were disciplined enough to save early and significantly.]
Very unlikely.
5% is $210k annual. At that level you still qualify for financial aid at HYPS type schools!!!
Those schools give financial aid at that level because they know 5 percenters are not likely to be full payors. At that level, they ask you to pay 15% or so of your income. So $30k ballpark. So a 5 percenter is a half pay, not a full pay.
Maybe a super-saver could full pay for one kid. Definitely not two or three.
A 5%er who lives with 30%er spending habits probably can full pay a kid to NYU. But a 5%er who spends like a spendy 1%er may not even be able to pay for the local public university with the kid commuting from home.
FYI - Amherst is incredibly generous with aid and does not include any loans in the aid package. Something like 60 percent of the students there get financial assistance, and the packages average something like $48k per year. The fact that you didn’t qualify for aid at one school a few years ago does not mean that you don’t qualify at another school today.
In sum, never assume that you don’t qualify without running the Net Price Calculator.
A lot of folks who can afford to pay $70K/year for a pricy college still aren’t willing to do so because they don’t see the value there. My family values education, but we don’t see enough “value” in most $65-70,000 a year schools to justify paying that. I guess based on the link previously posted we’re 1%ers, but our D is at a state flagship on a full tuition scholarship, and getting a fine education. I suppose there are particular students, and particular majors, and particular programs, where that huge price tag might be warranted, but that wasn’t our situation. OTOH, I know multiple families who are full pay at $65K+ schools and they are perfectly willing to pay the price for their child’s dream school. As long as those families exist, the bubble won’t be bursting. And it’s nice to have the choice - most don’t.
“I going to see if I can find the article, but I had read that the most popular private colleges could double their current tuition rates and that they would still have enough applicants to fill a class.”
They could easily charge more. These tippy top schools have huge applications, low acceptance rates, high yields on the offers they make, and 50% or so of the enrollment are full pays.
The number of families (nationally and internationally) in the 0.5 percent is big enough to fill the limited number of seats that these schools need to fill at full sticker.
The entire Ivy League enrolls about 15,000 freshman each year. Half of them roughly (7,500) are full pay. There are 600,000 households in the top 0.5 per cent.
The bubble is not going to burst at these tippy top schools. They charge $70k for one reason – because they can.
Similarly, a lot of folks who can afford to pay $200K Mercedes but they are not willing to do so because they don’t see the the value of driving an expensive car.
In 1976, Yale had 8,756 applications for 1,300 seats in the entering class. It admitted 2,313, or 26.8% of applicants.
In 2014, Yale had 30,932 applications for 1,360 seats in the entering class. It admitted 1,950, or 6.3% of applicants.
Over that period, seats in the entering class grew by 4,6%, while applications grew by 353%. With that much demand chasing that scarce a commodity, is it any wonder prices rise? It’s not a “bubble” unless demand is unsustainable. So far I see no signs of that.
In many cases, the outrageous sticker prices were mainly paid by international students, especially from China. Since most Chinese families only have one child, it was easier for them to afford high prices. However, with the crashing of the Chinese stock market (which was built upon bad accounting and large amounts of debt by purchasers of stock), those families may not be as able or as willing to pay those sticker prices.
https://www.■■■■■■■■■■■■/the-ivy-coach-blog/category/international-students/
This blog Explains why there is a not a bubble for the elite schools in the near future…currently China has the largest population on this planet that have a net worth greater than $500,000.