<p><a href="http://www.nytimes.com/2009/01/16/us/16college.html%5B/url%5D">http://www.nytimes.com/2009/01/16/us/16college.html</a> </p>
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<p>In a few years we're going to need the college student bailout.</p>
<p>Private banks loaning so much money to students is going to implode in its own way.</p>
<p>My son's education will be valued at over $200K,
120K in scholarship
50-60K from me
20-30K federal loans for him.</p>
<p>What a way to start out life.</p>
<p>Yes, I could have insisted he go to cheapest instate school for a total of $70K for all 4 years, but truth be told, we would have received little FA there since my EFC was only slightly below the COA.</p>
<p>I was destined to pay 50-60K no matter where he went. He could have had less loans at a state school but wanted to go to private school in NYC. I couldn't say no to that. </p>
<p>I hope he gets a job before I'm ready to retire</p>
<p>This is a timely topic for me. Just yesterday I checked my son's online account to pay a $200 housing deposit for next fall, and I see an unpaid balance of $2245 for his 10 meals per week plan. (I know we have had these discussions before) That is 16 weeks! That is 160 meals!! That is.... (clickety clackety clack...) $14 per meal and half of those meals are breakfast. sheesh! And his housing is now $4500 per semester. I think next year I will encourage him to find a crowded apartment in a bad neighborhood with a filthy kitchen.</p>
<p>^NJres, now ask your son how many meals he eats out of his 10/week deal? actually, i would not bring it up unless you want to be more upset, because i doubt he eats ten meals a week. most college students i know don't.</p>
<p>^My roomies and I always do our best to eat the 10 meals/week because we know it's expensive and it's food already paid for.</p>
<p>Our housing (with meal plan) is about $9k per year. Next year I'll pay about $1,000 less, but I'll have no meal plan.</p>
<p>This is a timely topic for me too, S just got an EA acceptances from Ivy schools, and they only provide need-based financial aid, and we are not qualify for any aids. Yet 200k is really a huge number for us, squeezing out an extra 50k each year after tax and daily expenses is an impossible task. I am thinking to get an home equity loan, and hopefully some day get bailed out too. just kidding.</p>
<p>Post #6: A more realistic budget is $56,000 to $60,000 for each academic year (9 months) in after tax money.</p>
<p>The article states that "students are paying more...but are arguably getting less".</p>
<p>Well, I am going to argue with the "getting less" part.</p>
<p>I am not going to disagree with the claim that there is less money going to instruction, and more money going to administration and support, but just because more money is going to administration and support does not mean that students are getting less.</p>
<p>At the institution where I have taught for over a decade, I have seen the following changes, all which would increase administrative and support expenditures, but would also increase what is being offered to students.</p>
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<li><p>A Study Abroad Program was created--and, of course, this needed a director, support staff etc. But it has also allowed our students to have more study abroad options.</p></li>
<li><p>More advisors: I know that in my particular unit we have tripled the number of advisors. More advising is good for students.</p></li>
<li><p>More honor programs: Several new honors programs were created, which again required directors and some support staff. Increased honors opportunities are good for students.</p></li>
<li><p>Development officers were added: Since public universities are seeing less and less money from the state, they need to act like privates in attracting money. I know that several scholarships were added for majors in my unit, though I am not exactly sure if these added scholarships were directly the result of the efforts of the development officer. Again, if we can fund raise better, this should also benefit students in the long run.</p></li>
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<p>Perhaps this does not justify spending less on instruction. But since they only give percentages, it is hard to know if the actual amount spent on instruction decreased or if the entire pool of money increased, with more of that share going to admin and support (and the same amount as always going to instruction). And I am sure that there are some administrative costs that are not justifiable. But I need more information before I agree with the conclusion that students are getting less.</p>
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Well, I am going to argue with the "getting less" part.
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<p>Thanks for doing that. I appreciate when people respond to press reports with details from what they've observed in their own experience.</p>
<p>"In a few years we're going to need the college student bailout.
Private banks loaning so much money to students is going to implode in its own way." </p>
<p>SueinPhilly Good observation...</p>
<p>Actually we've already had several de-facto bailouts already for example the 'liquidity' funds infusion of a year back, and there are more proposals coming. if you mean a bailout of students and families, much less probable. There is way too much insider lobbying so that's unlikely to happen until an economic implosion makes it imperative. Unfortunately there are quite a few similarities between the student loan situation and the mortgage collapse. So it is coming...</p>
<p>Concerning students paying more and getting less, in large measure that's a trend which can be tracked back to the 80's when US educational policy moved towards loan paradigm rather than providing meaningful amounts of direct financial support or direct student support such as Pells and other like aid. Essentially transferring the cost of higher education onto students and their families has caused a condition of ethical disconnect amongst many administrators in higher education. Basically direct support such as grants tends to produce a ethical environment in which costs are more carefully watched. More or less because these resources are obviously tax generated and its politically very inexpedient for colleges to be wasting money when the resources are provided by such means-both legislative bodies and the general population tend to be very concerned about improper expenses within those parameters. But once the model went to loans administrators became less likely to watch the costs, or even carefully allocate resources, because the consequences were one more step removed from the source. </p>
<p>And the whole situation is made worse by many state schools lacking proper overall funding because then there is a need to make economic alliances with the financial sector. And there obviously both parties have a vested interest in making sure costs escalate and services are reduced (or are provided in glitzy fashions which have more to do with marketing than meeting actual student needs). Once this condition developed higher education became no different than marketing any other consumer product. </p>
<p>Although if it was compared to a consumer product what students and families often get is a chrome plated Yugo at Mercedes Benz prices...</p>
<p>Maybe more American students will chose to attend a university in a foreign country. My son is spending this semester abroad. Instead of the $21,000 tab for tuition, fees, room and board at his LAC, we are spending less than $5000 for the semester. (Granted, he is in a 3rd world country.) He set up the exchange on his own, and his university approved it. He is at the best university in the country, and paying the same costs that a local resident pays.</p>
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My son is spending this semester abroad.
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<p>Does he speak the local language? I used to look at possibilities like that when I was an undergraduate, similarly noting the huge differences in cost of living between the United States and the country I was interested in. I ended up living there for three years after I finished my undergraduate degree here in the States.</p>
<p>Bastions of inefficiency. Some schools, including some Ivy League schools, have very short semesters or trimesters: late september to early december, then late January to early March. They only require students to take 3 classes. Professors may sometimes only teach two classes a semester. Schools fill up students time with workshops and community service seminars and internships, which aren't bad ideas on paper, but really only act as filler for their time which they use on their resumes to market themselves as community organizers. Nothing against social work, but some of this stuff can be inane. On the other hand, there are still colleges out there who require students to take 5 classes, who dont have "breaks" and vacations every 4 weeks and who go to work on Labor Day and don't let up until two days before Christmas. Where kids are doing 5 hours of homework a night. </p>
<p>The other problem is some colleges try to be all things to all people. You can't do that efficiently. Better to pick your mission and stick to it. </p>
<p>Finally, we have lots of wonderful colleges that are overlooked by students because of this insidious obsession with prestige and rankings. So some smaller colleges are under enormous pressure financially while some of the elites have endowments the size of Canada's GDP. So we have "an inefficient system" of college admissions.</p>
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In a few years we're going to need the college student bailout.
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<p>Sooner than than that Sue, sooner than that. </p>
<p>For years colleges have sold the same fantasy money/gravy train promise as did the mortgage brokers. To enrich themselves they advised those that trusted them: Borrow, borrow, borrow. As a consequence many of their "clients" are now facing life-long debt that by law can never be expunged. </p>
<p>I think they ALL should be sued. And I hope one day, I will get a chance to sit on one of those jury's.</p>
<p>My husband is always saying that college loan business is about ready to explode...it's a shame that schools charge so much a good education is out of reach for so many...the sad part about it is that though it is out of reach, everyone is going and not paying attention to price tags! I couldn't afford college tuition so I found a full time job that paid for my college at night so that I didn't have to take out loans....those days are gone. I do understand how folks get caught up in all the excitement of saying they go to a certain university, but we must snap back to reality at some point.</p>
<p>Tokenadult, yes he is fluent in Spanish. But one of his courses is being taught in English. He just chose the courses in his field that interested him. Possibly there are more classes being taught in English than the one that he's taking. Foreign universities could turn their courses that are taught in English into a profit center!</p>
<p>"For years colleges have sold the same fantasy money/gravy train promise as did the mortgage brokers. To enrich themselves they advised those that trusted them: Borrow, borrow, borrow. As a consequence many of their "clients" are now facing life-long debt that by law can never be expunged." </p>
<p>Toblin Quite true and quite unfortunate. </p>
<p>And it's one of the factors which has been instrumental in the origin of the students paying for more and getting less paradigm which began this discussion. When colleges could exist, or were perceived as institutions of service, there were reasonable compromises which were made as far as facilities, and surroundings. In short, trophy buildings were not needed because both academe and students viewed their time there as a form of sacrifice. Faculty knew that tweed jacket gentility paid a little less than commerce, but was rewarded in status for being the transmitters of cultural heritage. Students went to college knowing it may be in sparse dorms, but the years there were intended for later benefit. </p>
<p>However once the flow of consequence free money (for academe) began to flow the concept of college as a form of service to society simply could not be maintained. Ethically how could it with the knowledge that what once was available by proving one had the ability, now required that same ability be bought by borrowed money? And that this money had then been deviously engineered to be the font from which academe had to draw to sustain itself? And once these conditions occurred academe became like any other falsehood, bastions were soon erected as rationales. </p>
<p>Essentially the promise which had begun with the GI bill and the educational grant programs of the sixties had a tragically short lifespan. It died from turning what was once considered above such considerations as systemic financial gain, into something so close to the debt culture as to be morally indistinguishable from a pawn shop or rent to own. </p>
<p>Perhaps that's why, as AspiringinSalem noted, more students will be considering attending college in other countries, if they can reach those places. And it's haplessly ironic that other countries, be it places like Germany, Ireland, Canada, or even in the 2nd and 3rd world they still can conceptually consider higher education as a form of social service-whilst here in the US still one of the most affluent countries on earth...we can no longer do so...</p>
<p>States are going to be cutting aid to publics due to the budget crunch, so the % tuition covers will likely continue to rise. Privates are generally a beter option now if they have a decent endowment and you are accepted.</p>
<p>Part of this disconnect is that college resembles health care in which there is a third-party payer. Unfortunately, with college that third party is a loan that must be repaid by the student. For most students, that gap loan isn't quite real - signing up to pay $6K isn't much different than $16K or even $26K, since all the pain is in the future.</p>
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Privates are generally a beter option now if they have a decent endowment
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<p>It seems that most privates didn't have an investment strategy to protect their endowments from the current down market.</p>