<p>Slithley, I just got my Cornell 30th year college reunion info in the mail and I hate to say it but we graduated in the dark ages. That recent increase in college cost isn’t recent at all. I heard it back in the 80s when I was just starting out and interest rates were exorbintant. I heard it in the 90s when my kids were small and the message was better start saving now. I’ve heard it big time since the dot com bubble, the stock market crash and the housing bubble burst. Middle class salaries and job security are what hasn’t kept up. The only other recent thing we cc users have in common is that many of us have college age or close to college kids and we’re faced with the reality of paying that bill recently.</p>
<p>I was surprised at what the VA schools are charging these days. I though they were rock bottom in cost. I remember when they used to be a very good deal even for OOSers. Then W&M and UVA jacked up the OOS surcharge so they are priced about where the privates are, and now looking at their in state costs, they aren’t such wonderous deals that they were not so long ago. A lot of changes happening in this area.</p>
<p>woodswoman, the “recent” increase refers especially to public colleges, and is very much true for the California public university system. We’re really rather provincial out here 
and we could afford to be because there was a world-class university system that was highly affordable. Tuition costs at Columbia etc etc were totally off my radar–and that of many of my friends–because of course our children would go to UCs or Cal States, just like we did back in the day. </p>
<p>Being able to save adequately for college expenses and retirement while also paying for food and shelter is definitely not easy!</p>
<p>SlitheyTove --</p>
<p>I agree.</p>
<p>It is not an issue of people feeling entitled. It is an issue of price distortions.</p>
<p>I see in the very recent threads here people arguing that private schools have money and they are free to give to whoever they want.</p>
<p>If a school indeed has that money that comes form other sources and also not from tax exemptions, them sure they can give to whoever they want.</p>
<p>The problem is that the practice for many schools is to jack up prices to some students so that they can offer discounts to other students. This is purely a price discrimination mechanism.</p>
<p>I posted a link on the other thread that has this quote from the President of Wesleyan University, Michael S. Roth:</p>
<p>“I am grateful for the various suggestions alumni and current students have submitted for how Wesleyan might offer a greater percentage of its revenue for scholarships. There is a fairly straightforward equation: the more we spend on providing access to the university, the less there is to spend on providing the education to which students want access. Yes, there are certain things we can do to increase revenue: we can charge (those who pay) more; we can spend more of our fundraised dollars (rather than putting the money in the endowment); we can increase spending from the endowment. We can also start new programs or enterprises that will subsidize the university’s core programs.”</p>
<p>So, again, my problem with this issue is not about entitlement. It is about calling finaid things that are not finaid, and about we stop pretending that the “gift” of finaid magically appears. The truth is that some students are indeed in the upward-distorted end of the price-discrimination mechanism and end up subisdizing people in the downward-distorted end. </p>
<p>For more about Price Discrimination, just check wikipedia.</p>
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<p>That’s true for both need and merit based aid. In both cases, the schools want to be able to “buy” students that they value more. Merit aid buys a school high academic achievers and some (relatively) wealthier students. Need based aid buys a school high academic achievers and students that they see as having great growth potential. Students who aren’t seen as quite so desireable can either pony up the full undiscounted COA to buy their way in, or can opt for other schools.</p>
<p>If you eliminated all aid and charged everyone the same COA then yes, some middle class families would be able to swing $40k or $30k or whatever a year. That’s the model at Elon–lower overall price, less aid on offer. But many other families who could only manage $20k or less would have the same issues with costs. The big beneficiaries would be the full-pay families, who’d get nice discounts. A huge relief for a family earning $140k a year, not quite so big a deal for a family earning $280k annually.</p>
<p>I don’t have problems seeing people complaining about the aid packages as long as they show both the aid packages and the NPC. The information is useful for future students.</p>
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<p>So true. When I went to UVA law, OOS tuition was $3600 a year. It’s way more than 10 times that amount now. Frightening. When I went to college, a student could pay for college with federal loans and minimum wage jobs. I managed to pay for a live-away, private college that way, with no financial aid (other than unsubsidized federal loans) at all and no parental contribution. That would not be remotely possible today. And if I didn’t have a child who has already been through the process, I would know college costs have increased, but I probably wouldn’t realize the extent of that increase.</p>
<p>And OP - well said, I agree with you completely.</p>
<p>SlitheyTove,</p>
<p>I can agree that there may be some reasonable justifications to implement current finaid practices. What I can never agree is with statements such as the title of this thread “Wait…hold on…aid is a gift not a right” and also with statements that say that middle class families have a sense of entitlement. </p>
<p>I also do not like that the middle class is paying a disproportionate amount of the costs relative to to their income. Sometime ago a poster posted a graph with the %income paid in the Y-axis and the income in the X-axis. The graph starts with zero and stays at zero for a while, then it increases fast, picking right in between 100-150K of income, and then declining fast.</p>
<p>What’s curious to me is how often people are outraged by the FA policies (or “price discrimination”) of pricey private schools … almost disregarding that they’re private institutions and can do whatever they want with their income, their endowment, their facilities and their admissions policies. If the FA policies are worthy of a rant, surely that is not an institution to which you would want to take your business. In fact any business that applies a sliding-scale to any service could be accused of the same thing. Don’t like it? Vote with your feet. But really, would you be so up in arms if we were talking about a doctors office? A summer camp? Music lessons? Lots of things have sliding scale pricing structures. How they are executed is entirely the business of the service provider.</p>
<p>But of course, where we all take our education money is an individual choice. </p>
<p>I feel a great deal more support for those for whom a public college education is not affordable.</p>
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<p>Well, both of those statements can’t be true! If you think that aid for the middle class is a right and not a gift, then doesn’t that mean that you feel a sense of entitlement? ;)</p>
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<p>This sounds like a graph for a specific school, or a specific group of schools, because the vast majority of colleges do not meet financial need. That means that most students are gapped, so they must pay more out of pocket. So the percentage they’re paying is going to be higher, and can’t be zero, unless we’re talking about a tippy-top school which guarantees that low-income students pay nothing. </p>
<p>Some poor students might somehow manage to come up with money for college, but many others will postpone or not attend college. Middle-class families are more likely to manage to borrow or dig deep into their pockets, so more of their kids will manage to attend college. The dropoff for higher income families is because of the fixed rack rate for COA. Nothing you can do about that.</p>
<p>The big issue isn’t so much the shape of the graph–it’s the height of the peak. Reducing costs for public options by increasing state support would be the strategy I’d pick.</p>
<p>At least, 'rentof2, now you are talking about pricing scales, and not “finaid gifts”. It is a start.</p>
<p>BTW, I do not like differential prices in Doctor Offices either. Summer Camps and Music Lessons? I can live with that.</p>
<p>Ps: Let us not forget that private schools do benefit quite a lot from public money.</p>
<p>SlitheyTove,</p>
<p>“Well, both of those statements can’t be true! If you think that aid for the middle class is a right and not a gift, then doesn’t that mean that you feel a sense of entitlement?”</p>
<p>Not really. I am not asking for the “gift” nor the “right” of finaid. What I am in favor is for less price discrimination. </p>
<p>I am totally in support of more public investment in higher education. I do believe that education is a public good, and thus everyone may contribute. Notice that this type of funding allow for smaller distortions because everyone contributes with a smaller percentage of their income. This solution probably will be less favored by the super wealthy, who would prefer to pay $60K per kid per year.</p>
<p>BTW, the graph works for those schools whose policy resemble meeting FAFSA-computed need. I understand that different schools have different policies. Some meet more than FAFSA, some meet much less.</p>
<p>But the differential prices are how those private businesses want to conduct their business. If you think any benefit such a private business gets from public money creates an obligation for that business to charge rich, middle, and poor alike… well, that’s an interesting argument. Guess that would apply to all eventually who benefit from roads and police protection, tax breaks, and so on.</p>
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<p>The colleges who have such policies want them (and put a lot of effort into them) because they want the diverse student body the financial aid can create. Those schools believe that is a benefit, not just to the less affluent students, but also to the “full pays” who experience college with a wider range of people – different backgrounds, different resources.</p>
<p>This is very important – nearly cherished – value for some of these schools, and as private institutions it is their right to attempt to achieve it.</p>
<p>NotYourBusiness, if you’re in favor of less price discrimination, how about charging every family the same percentage of their income in order to attend a school? That would be one version of “fair”, because the graph would be flat, but good luck getting that implemented. Another version of “fair” would be that everyone pays the same fixed COA, but then the graph would most certainly not be flat. Choose your poison. :)</p>
<p>'rentof2,</p>
<p>Of course there is not (yet) current legislation that forces schools to charge universal pricing to everyone. There is, however, regulations in certain areas that apply to private business even if they receive no public money. For instance, check the Robinson Pattman Act. </p>
<p>From Wikipedia: “The Robinson–Patman Act of 1936 (or Anti-Price Discrimination Act, Pub. L. No. 74-692, 49 Stat. 1526 (codified at 15 U.S.C. § 13)) is a United States federal law that prohibits anticompetitive practices by producers, specifically price discrimination. It grew out of practices in which chain stores were allowed to purchase goods at lower prices than other retailers. An amendment to the Clayton Antitrust Act, it prevented unfair price discrimination for the first time, by requiring that the seller offer the same price terms to customers at a given level of trade. The Act provided for criminal penalties, but contained a specific exemption for “cooperative associations”.”</p>
<p>Do I think there is a case to force colleges to stop this price discrimination? No I don’t. In particular, I think that our entire educational system, supported by the way FAFSA works, kind of bought this idea that aid is indeed this “free gift”, and are not really putting much pressure on colleges.</p>
<p>Some pressure, however, is starting to appear. Just Google about current news talking about pressure on private colleges to rein on tuition. This pressure does help to minimize the upward price-discrimination distortion.</p>
<p>Lastly, I am a citizen, and as such I am <em>entitled</em>… Not entitled to the gift of financial aid, but entitled to have my own opinion on when some things are too much. Because there is no current legislation to rein on colleges price discrimination practices, does not mean I do not have the <em>right</em> do disagree with it. We live in a democracy, and thus it is only natural that people have different opinions about things. </p>
<p>One thing I know from economics is this: price discrimination allows firms to extract maximum surplus from consumers. Some benefit from this, some are greatly worse off. Sure, when you are on the downward side, you think it is all nice, but on the long run, consumers are better off with universal prices. Don’t believe me? Then why is that current legislation is curbing price discrimination in health insurance products? So yes, be all for this finaid/price discrimination policy. Let us do this for everything. And talk to me again when you are older and try to buy health insurance.</p>
<p>You gonna like it when health insurers charge everyone a gazillion and give “health-aid” to the young healthy folks. Why would you be complaining? Are you <em>entitled</em> to the gift health aid money that we at BlueShield give to our young healthy customers?</p>
<p>“charging every family the same percentage of their income”
Harvard is doing something similar to that. Although it has a lower-bound 0% floor for low-income folks and an upperbound COA maximum at around 60K.<br>
A better approach would be for the government to collect taxes and fund public education.</p>
<p>On these threads I always end up feeling like the people having an issue with aid would be fine if it all worked like buying a car - rich people buy Mercedes and Jaguars, the middle class buys Toyotas and Fords, the poor buy used clunkers or ride the bus. If college worked the same way, the rich would attend the Harvards, the middle class would attend lower ranked privates and Public Universities, and the poor would attend community colleges which they would get to by taking the bus. </p>
<p>Why don’t those same people complain that they are being punished for their hard work by having to pay for their food rather than get Food Stamps?</p>
<p>Since such a system would satisfy the fairness quotient of the complainants, their objections, in reality, amount to envy of the poor. Once you realize that, it can go a long way towards readjustment of the Attitude. I know, I had to go through that adjustment myself.</p>
<p>^Umm, every state in the union has a state university system, supported by taxpayer dollars. And everyone, rich and poor, can take advantage of it.</p>
<p>The cost of college is way out of reach for many people. Financial aid, in my opinion, is extremely important to help bright young people afford colleges. I may be wrong, but I think this thread was created in response to many posters on CC who get upset that they didn’t get more aid from some of the most expensive colleges in the US. I can see applying to expensive colleges in the hope that you’ll get terrific aid - but to be angry when the colleges use your family’s financial information - and meet that need - that’s where the entitlement comes in. Didn’t those families read the results of their FAFSA submission?</p>