“The pushback is beginning” on rising tuition

[Vladenschlutte]

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On what do you base your assumption, unless you believe that low “net worth makes a good student”?

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<p>Nope… My assumption was:</p>

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Take a school with 6.67% (nice number) acceptance with another 6.67% that are just as good as the people they accept. If they lose 1/3 of their applicant base they’re going to need to take 10% of applicants, and <a href=“assuming%20their%20losses%20are%20distributed%20evenly%20over%20student%20ability”>b</a>** they move from 13.33% qualified to 8.89% qualified. Now they’ve deemed 12.5% of their admitted students unqualified in order to fill their seats. If they lose 1/2 that 12.5% becomes 50%. And it’s a snowballing effect. It lowers their prestige and the “value” of a HYPSM degree becomes even less.

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<p>Which implies that student ability is evenly distributed over socioeconomic status. While this might not be true, it doesn’t change the idea, simply the result shifts one way or the other. </p>

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On the other hand, it is not out of the realm of imagination for a super-selective school to raise its list price, but increase financial aid in a way that families that would get financial aid now pay the same, but those who would pay today’s list price now pay the same or more, even if some of them would get some financial aid against the higher list price.

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<p>I was assuming the “Harvard” model of 10% of income up to 180K household income and full price after that. Of 'course if you completely change the model to be that somehow they know exactly the tipping point for every potential current student and just charge them that, they’ll get more revenue and increase the caliber of students that attend, but that’s not gonna happen until Harvard starts bringing psychics onto their admissions team. The information isn’t there. People don’t simply pay the most they can “afford” based on what FAFSA says they can afford, they’re going to weigh the value of a HYPSM degree with the value of their much less costly state flagship degree.</p>

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Indeed, an analogous type of thing is going on already. The University of California is rapidly raising in-state fees in response to budget cuts, but its financial aid policies mean that students from the bottom 70% of household income families are not affected. Clearly, the strategy is to get more revenue from the wealthy families who are able and willing to pay (and many grumble but are willing to pay since those who pay list price will still find UC less expensive than many other schools, although a few who get into the super-selective super-generous-financial-aid schools will likely find those schools cheaper).

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<p>They’re willing to pay some amount more than they were paying before. I’m betting for those in 70th-98th percentiles that amount is not 100K when they can go somewhere else almost as “good” for far less. Hence, my conclusion in previous posts.</p>