The Tuition Debate

Parents Forum
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<p>@Overtheedge‌ </p>

<p>Once you get out of the very elite privates, then the cost is difficult for everyone. These schools don’t give out a ton of need-based aid, as they tend to privilege merit aid. Furthermore, they have very sophisticated models, where they understand that if you give out X amount of scholarship to a family making Y amount of money, then such a student is more likely to come, generating Z amount of dollars for the school. So, for example, let’s say they have 20K to give and let’s suppose they school costs 20K. They could give it to one student who has a 20K need, and get nothing. But their models tell them that if they give 5K to a family making Y amount of money, that student will come, and pay the 15K. So what they do is give 4 families 5K, and those families will pay the 15K, generating 60K in tuition dollars. </p>

<p>If you check, you will see how even some schools in the top 50 liberal arts category are like this. Centre College, which is ranked in the top 50 and is also one of the CTCL, averages a net price of 20K for families making 48-75K. Whitman College, also in the top 50, averaages a net price of 24K for the same income range.</p>

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<p>At most schools (public and private), an annual income of $20K is also going to land you in the full pay category, except for $5500 or so per year in Pell.</p>

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<p>Yeah @AnnieBeats, that does sound very difficult. And I know that when my children were born, it was difficult to even think about saving for college.</p>

<p>I guess my point is, as @OHMomof2 also points out, it is very difficult for everyone to afford college. There’s this notion that if you are of lower income, you get a ton of need-based financial aid thrown your way at most/all colleges, so it’s easier to afford college than someone who makes in that 150K-200K range, but this simply isn’t true.Or that you are somehow penalized if you save for college, so it’s better not to. Again, this isn’t really true. So this generates a lot of anger for people who feel that they are successful financially but then view their success as penalizing their children in terms of college choices and affordability. Families of modest income struggle with affording college, too.</p>

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<p>@skylvr I’m not sure that is really just a notion. It’s actually true. For high achieving low income students, paying for college really isn’t a conversation. If they get into elite schools, all they have to worry about is transportation IF so much (Questbridge). There are also much more scholarship opportunities for those who are low income comparent to those who are middle class. The middle class are being squeezed out of college and I say that as someone who isn’t even middle class.</p>

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<p>@AnnieBeats, you keep switching between ‘if they get into elite schools’ and 'the middle class are being squeezed out of college (in general).</p>

<p>Here’s the financial aid calculator for my state flagship, the University of Alabama. You are welcome to put in an in-state resident, with a solid B average and a 26 ACT. And a family of 4, one in college at an income of 20, 000.</p>

<p><a href=“Net Price Calculator – Financial Aid | The University of Alabama”>http://financialaid.ua.edu/net-price-calculator/&lt;/a&gt;&lt;/p&gt;

<p>The aid package comes back as follows:</p>

<p>23K direct costs to UA, 4K in indirect costs, 6K in federal grants and 8500 in loans, leaving the family to pay about 7K-8K.</p>

<p>How is that affordable? </p>

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<p>I just looked at the Harvard calculator - A family of 4 living in New York with 1 in college, with an income of 180k and 250k in assets is expected to contribute 41,800. If you increase the income by 5k, but keep everything else the same, the expected contribution is 46,975. So even ignoring taxes, it is possible to be worse off financially even after an increase in income. I wonder if this is intentional in the formula.</p>

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<p>Not sure that income and class are the same thing…</p>

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<p>It’s a market. The schools have choices in terms of how they operate. You have choices in terms of how you save and how you spend. </p>

<p>A middle income family can choose to pay $60k if your smart kid gets into Duke; or $40k to send him to Vandy; or $30k to send him to USC; or $15k to send him to the honors college of your home state U. A couple of years living at home and attending a CC is even less.</p>

<p>Poor kids generally have fewer choices when it comes to college. Despite the fact that a really poor really smart kid can go to a really fancy college for free. Not many kids in that category.</p>

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<p>It seems really simple to me. Colleges have raised their prices year over year because of one very simple reason - because they can. At the elites, the near-elites, the highly rated, even the modest state schools, they are able to get their annual increase because people will pay it. When the demand is there, there is no way the market will reduce what they charge. There is (or at least there has been) no motivation for these schools to do so.</p>

<p>Seems to me the more valuable (and fun) debates are around questions like: 1) should the highly ranked schools divert some or more of their available funds to Merit as opposed to FA? 2) Are the “full pays”, in fact, subsidizing the education of those that have no hope of attending these schools without FA? If yes, is that fair? At what level should they be expected to subsidize? 3) Exactly what range of income is it where families are getting squeezed (no or little FA but not enough disposable income to be “full pay”)?</p>

<p>Personally, I would like to see more Merit available at the higher ranked schools. I think recognizing excellence is always a good and fair thing in a true meritocracy. But then you get into more fun debate about achievement based on socio economic background, etc. There’s no question schools (private and public) are pursuing more and more “full pay” students. How they are using the additional revenue will probably help get to the crux of all this.</p>

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<p>@skrlvr I don’t think a middle class family should be forced to lower the quality of education their child receives because of finances. Yes, you can send your child to a state flagship and be confident that they will receive an excellent education. But, outside of California, Virginia, Florida, and North Carolina, that confidence isn’t necessarily there. In the same way that low income students can go to elite schools without breaking the bank, the middle class should be able to do the same. </p>

<p>(This statement will make some people angry) I feel even more strongly about this because there are many low income parents who deliberately stay unemployed so that their child can get good financial aid. I know this is a case by case basis, but why should the middle class family be punished when they are working extremely hard, when there are people out there who are actually trying to same low income? That’s why I think college should be low cost across the board. </p>

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<p>The middle class is always welcome to quit their $150K a year job and work at McDonalds to reap these benefits the poor people are getting. I wonder why they don’t…?</p>

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<p>Very few choices unless they are very high stats, savvy enough to know where to apply, and their low income isn’t a result of an absent non-custodial parent. </p>

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<p>Not many at all.</p>

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<p>PS: I agree, it should be. But what is “low”, to you?</p>

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What exactly constitutes “lower” quality of education?</p>

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<p>@AnnieBeats‌ </p>

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<p>It is possible for a middle class family to afford an elite school without breaking the bank. Let’s get back to the family of 4 with one kid in college with 175K in income. What do you think is reasonable in terms of paying for college for this family? Let’s say, as I did before, about 13K. That’s less than 10% of gross income. But Harvard asks your family to pay 31K.</p>

<p>OK, you say that it’s hard to save over a long period of time. But let’s say it’s the summer before ninth grade, and you are beginning to realize that your kid will be in high school, and after that college. But you haven’t saved a penny! And you think your kid has a shot at Harvard/ You could actually begin to save 13K for the entire high school career of that child–4 years. So you would have saved up enough to pay 26K while that kid is in college, 13K each year from savings, and 13K from current income. The rest–5K per year–you could take out in loan.</p>

<p>It takes some planning, but it is possible, without breaking the bank.</p>

<p>It takes some planning. And realize that someone who makes 175K is in the top 5% of wage earners for almost the entire country. </p>

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<p>I also want to make one last point. There are also a lot of fanilies who are working hard and are still low income. You can be working hard and still be low income.</p>

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<p>Absolutely. I don’t believe that one can legislate “low tuition” bcos one cannot legislate economics. </p>

<p>Why should Bill Gates’ kids have “low” (subsidized) tuition? Why should Obama’s daughters? Or, what about the scion of a wealth oil sheik? Either family can easily pay $100k/yr and more.</p>

<p>Harvard should raise its tuition. And then give even more aid to those receiving Pell grants. (Actually, H should reject Pell grants bcos they don’t need the money; instead, H should just fund the Pell eligible students out of its largesse.)</p>

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<p>Where have you found a large “cliff” in financial aid in California public schools? (The Blue and Gold Opportunity promise income threshold does not show a financial aid “cliff” at that level in the net price calculators.)</p>

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<p>@AnnieBeats‌ :</p>

<p>Ahem. Along with CA, VA, NC, & FL, there’s MI, TX (mostly for engineering and business), IL (for engineering, CS, and accounting), IN (for engineering and business), GA (for engineering), NM (for engineering), WI (in several fields) & MN (through WI). Roughly half the country lives in a state where they can pay in-state fees for a school that’s very good in a decent swath of studies. And that’s not counting state schools that are great in one subject (like Iowa for writing, Mizzou for journalism, UDub for CS, PSU for meteorology, Pitt & Rutgers for philosophy).</p>

<p>Even if you’re in NY, Cornell is a little cheaper (and transferring to Cornell after a year or 2 at a SUNY or CC is a more affordable option).</p>

<p>Plus, if your kid can get in to an Ivy, they have a pretty good shot at big scholarships from the likes of Emory/Vandy/Wake/USC or LACs like W&L, Macalester, Richmond, Trinity (for IL residents), Depauw, Rhodes, Beloit, Wooster, & Denison. If they’re female, even better, as they’d have a good shot at scholarships at schools like Scripps, Bryn Mawr, & Agnes Scott.</p>

<p>Also, for engineering, you could get a full-tuition scholarship from a LAC that has a 3-2 program with Columbia or WashU (though it’s a tough and risky road).</p>

<p>For that matter, while the experience isn’t the same, Cornell and many state schools (including top ones like UMich, UVa, W&M, and UNC as well as the UCs) take a lot of transfers. In fact, it’s easier to transfer in to UNC than to get in straight out of HS if you’re OOS.</p>

<p>Columbia GS also takes in a lot of transfers (though that’s for non-trads who had a break in their academic career).</p>

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<p>Let’s say the $175,000 is all labor income (the most heavily taxed type of income), so that about $31,000 of federal income tax and about $10,000 in payroll tax must be paid. That leaves $134,000 after these federal taxes. Let’s say the state income and payroll taxes are around $12,000, leaving $122,000 after federal and state income and payroll taxes.</p>

<p>Now, let’s assume that a median income family headed by parents around age 50 (common age to have high school or college age kids) takes home about $55,000 after federal and state income and payroll taxes against a gross income of $65,000. Let’s also assume that this family spends everything and saves nothing.</p>

<p>So if the high income family making $175,000 lives like a median income family headed by parents around age 50, then it will have $67,000 left over after spending $55,000. Wouldn’t you think that $67,000 per year of otherwise-unused money is plenty of money to make savings goals for both retirement and kids’ college?</p>

<p>I.e. it is not hard to save money if you have a high income but live like a middle income person/household.</p>

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<p>Duke, UChicago, Rice, JHU, and WashU also give some kids big merit scholarships. So do a bunch of engineering institutes like Stevens, WPI, & RPI, while Olin and Cooper Union are half-tuition.</p>

<p>Also, with their automatic OOS scholarships now, New College of Florida may be affordable for the OOS upper-middle class. NM Mining and Tech always had affordable OOS tuition. Both have impressive alumni results, and for those kids looking for a small school, they aren’t terribly difficult to get in to and would cover most fields of interest between them.</p>