<p>Any thoughts out there on how the credit crunch, layoffs in the ranks of the middle and upper management, slumping stock market and rising inflation migh affect college admissions? I'm thinking the number of families able and willing to pay full freight is diminishing quite signifcantly. How might that impact admissions going forward?</p>
<p>I have also been thinking about this for some time. I am interested in this years freshman class and their ability to get loans for this September. I am fearful that many families will be unable to secure loans after their student has already chosen and been admitted to their school.</p>
<p>I agree, Sax. One avenue of college $$, the home equity line of credit or home equity loan, has been unreliable of late. A number of educational loan companies are getting out of the business. Maybe prices will drop at the high end when there are fewer families who can come up with the cash.</p>
<p>We keep hearing that the cost of college follows supply and demand. I guess we'll see...</p>
<p>I have posted a number of times that the kids in this area where I have lived for the last 8 or so years are now having to take finances more heavily into the consideration. THis year was the time when I was surprised at kids taking the money, state choices, or holding off college because of cost. I say this as a parent who sees mostly kids in private schools as my son went to a very expensive one. I feel lucky and even guilty that my son is going to his first choice though it is not anywhere close to his optimal financial option. </p>
<p>We have changed a lot too. With S1 we wanted to send him to whereever he wanted to go regardless of cost. We would come up with the money somehow. Educational choice has been a big priority for us. 8 years has changed that perspective for us. We have a son in a state school, and even that has been a tough pay, and frankly, it was a reason why we have some options today, that his costs have been relatively low. For us bearing the full brunt of high college costs, along with high private pre college costs has been rough. We have foregone most luxuries that folks in our situation have, and had to face the fact that we were jeopardizing future security and health by placing college and education for our kids at such a high priority. It was a difficult psychological change for me as I really truly wanted, this above all for our family. It took some tough events to see that there are other more realistic views.</p>
<p>I think that financial difficulties may necessitate students applying to more schools than they had planned in order to try to capture the brass ring of more aid. Even though additional application fees is costly in the short term, I suspect that family finances and the reported increasing scarcity of loans will make extra applications a financial necessity for a lot of families.
In the long run, I think a lot of community colleges will end up benefitting from the horrible economy as many good students may have to live at home to make a college education more affordable if they cannot get enough aid.
I think really bad economic times are only just beginning and the worst is yet to come.</p>
<p>cptofthehouse,
Thanks for your post, food for thought for many of us.</p>
<p>We saw a ton of kids going to community college out of our high school this year. Many of these were good students who I have no doubt will transfer down the road. I'd say it's a trickle down thing. These were the type of kids who used to go to 4 yr in state publics. The kids who used to go to more elite schools are now on merit aid at the 4 yr publics. Both val and sal took full rides at publics over the name schools they were admitted to. Anecdotal, but it wouldn't surprise me if it's a trend for the middle to upper middle class.</p>
<p>The expensive private high school my daughter attends sent over half its graduates to instate public U this year. There is a lot of surprise over that. I think there is definitely a new fiscal reality setting in to college funding, similar to the housing market.</p>
<p>Something that surprised me this year was the loan heavy packages some of the kids got from schools that guarantee 100% of need to be met. It would seem to me that the warnings and the way things have been going with the economy would make it unwise for kids to be taking such heavy loans at a young age. It's even an issue for parents these days even with the availability of the PLUS loans to meet EFC. When I look at my 25 year old, and that he can barely afford a car; well, he really cannot afford it, WITHOUT college loans and with a family that can help him fairly generously, I shudder at the thought of kids taking out loans at a time when low paying or non paying internships are become the best way to get into a high paying career. My friend's daughter just graduated from law school with over $150K in loans. She is fortunate enough to be such a high achiever that she has received a lucrative offer, but even then in the city of choice, getting housing, car, clothing, amenties is going to be tight. Her brother with $50K in loans in a much less well paying job is hurting. How on earth can kids pay off these amounts? So far we have been able to avoid burdening our kids with loans, but S3 is going to be borrowing $3500 in terms of a unsubsidized Stafford this year as part of his responsibility in picking a higher cost school. I expect him to be $15-20 K in debt by the time he graduates, and hope we can help him with some of this. But we are borrowing too to make his costs.</p>
<p>It astonishes me also how okay families seem to be with their kids taking on significant educational debt. We must pay full freight for D1 and are going to manage it (assuming DH stays employed at his current level of compensation). At the same time we are trying to save funds for D2 who will be attending college in a few years. These are just very, very serious financial stakes. </p>
<p>I keep asking myself how many families out there are willing to go to this level of sacrifice for their kids' education. I guess the loan route is very common. I really seriously question parents who encourage kids too much down that road. My BIL is 80k in student debt and just laid off for the second time in three years.</p>
<p>I also wonder about test scores and SES. The big rap against the SAT is that high scores tend to be high SES. If lots of those high-scoring high-SES kids are starting to be unable to pay full freight and they are unwilling to go into massive debt . . . what might be the impact in admissions overall all? I suppose minimal where the endowments are gigantic. But for those highly selective schools who jealously attend to their USNWR ranking and who do not have enormous endowments . . . what will be the impact?</p>
<p>I am curious about what is going to happen in the next few years as the number of college aged kids decline. This year was tough as there were so many kids applying, but looking at the tables the trend will be going downward. I don't think the most desirable schools will be impacted much but some of the schools that are asking for those big $$s are going to have a problem, in my opinion. Especially if the economy slumps and lending gets very tight. As it is, home equity loan possibilities are declining given what has happened in that industry, and it seems to me that credit is getting tighter.</p>
<p>They will educate the hordes of kids from around the world taking advantage of the weak US dollar.</p>
<p>^ okay, BCEagle91 - you are most likely dead on with that assessment. But the question then becomes: Will states like Connecticut and Massachussetts and the federal government itself continue to grant these institutions tax free growth on their endowments. I believe there is already a move afoot in MA to put an end to that. If the "elite" schools in this country become schools primarily for the FA and International sets . . . what will the national sentiment toward them become?</p>
<p>Many people in the financial business lost their job in NYC this year. I know a few of them with kids going to college this fall. I have been afraid to ask. At the same time, I am doing all I can not to let people go even if they are subpar performers because I know how tough it is to get a job now. I am sure people are thinking very hard about making that 4 yr commitment. </p>
<p>I don't think it is going to hurt schools with very large endowment. It's going to be those small LACs that would get hurt. There will probably be less merit scholarships to attract top students for those schools. I think it's time for our government to give tax deduction for educational expense.</p>
<p>BCEagle91 is right, those empty spots will be taken up by international students because American education is now becoming a lot more affordable.</p>
<p>I think that there is still a small but healthy debate on taxing endowments. I don't have a particular opinion on it one way or another (haven't studied it) but here's my perspective on the benefits to allowing foreign students to MA schools. MA is experiencing a loss of residents due to the high costs of living in the area. Housing prices are a big problem. And costs due to the political system are a problem. So lots of professionals look at lower cost areas like the NC Triangle area or even NH (which has slightly lower housing costs, and overall better quality of life). I think that heating costs will drive many out of MA this winter.</p>
<p>Balancing that is a lot of kids coming to the great universities here that decide to stay here after graduation. And that provides a nice influx of educated and energetic young adults. This could be true for foreign students too. I'd guess that most of the foreign students would be fairly affluent and they could benefit the area while they're in school and after they graduate if they decided to remain.</p>
<p>The problem is where they displace local students in public colleges and universities. But those can be controlled in the state legislatures.</p>
<p>So what we are likely to see is increased globalization of our universities. Sort of like China suddenly grabbing lots of oil; it will be international students who can most afford a US college education. Hmmm. . .</p>
<p>I think it's fair to conclude that the economy has already affected the University of Connecticut.</p>
<p>Here is an article about colleges enjoying the low dollar value and the international student:</p>
<p>Foreign</a> students flock to the US - The Boston Globe</p>
<p>What is particularly upsetting, is that the students with US citizenship may now borrow even more money (looks like 37,000) for an undergraduate in Stafford Loans!</p>
<p>Another point, we have been to many info admission meetings over several years (2 kids going through the admissions process), and for the first time one counselor let us know that they will consider extra travel costs in their FA offer since we live further away than their typical student. They are a more regional school.</p>
<p>Okay . . . now I'm depressed. Something is just so wrong with this situation.</p>
<p>As we see what is happening with the mortgage situation, we are not learning it seems as we are now saddling our young people with amounts of debt that they would not be taking out of college. At $10-20K levels, you can say, all right, that is a new car payment and you have to do without one till college loans are paid. Now at $40 K we are getting into some serious debt, and numbers that are beyond what a kid can make in a year at a job. That was sort of the rationale in my day for MBAs, lawyers, doctors taking out the loans. Based on expected compensation out of school, banks were willing to lend large amounts. But for most kids, a ug degree is not going to make that much more in terms of the first few jobs. With internships now becoming the rage in the higher paid fields, it is another blow for kids whose families are not well heeled and cannot help support them and their loans after college.</p>