<p>@awcntdb : except that market demand isn’t set by loans. Would you agree that sticker price is set by the Ivies and that no-name privates would not increase sticker prices if the Ivies didn’t? Well, at the Ivies&many equivalents, the growth in parent PLUS loans doesn’t come in to play and direct loan limits have not changed in decades. So you’ll have to come up with other reasons in growth in demand (which I gave before).</p>
<p>I would think the fact that these loans are no longer dischargeable in bankruptcy would have a bigger impact than general Fed policy.</p>
<p>@awcntdb :</p>
<p>What part of “lending standards had been the strictest they’ve been in decades” do you not understand? BTW, I work at a bank, so I actually know this stuff.</p>
<p>Jeezus, @Hunt. Of course ND could fill its school with 100% full-pays if they want to. USC could be all full-pays if they want that. NYU (with the crap fin aid that they give almost everyone) is close to 100% full-pays as it is and they’re gigantic. </p>
<p>BTW, ND has a reputation for being poor with fin aid, so they’re likely majority full-pays now.</p>
<p>@GMTplus7: Also, Minnesota has the Gold National scholarship that allows OOS Americans to pay the in-state rate.</p>
<p>
</p>
<p>While this is true to a point, natural price increases cannot account for 2 to 3 times inflation per year. That is an unnatural price increase rate that has been going on for two decades. Something must be fueling that continued increase.</p>
<p>As for the “need” to increase price regardless of costs, the selective schools must maintain perceived value. The top schools are going to increase prices even if they do not need to to keep perceived value as high as possible. Even if a Harvard could openly charge $40K a year, it will not do so to maintain its value position in the marketplace. We do this all the time, as a company. There are many times we are forced to raise prices on products because if we did not the consumer would view our products as lower quality, even if quality is actually higher.</p>
<p>You also answered your own point. Yes, most super-selective schools could fill their classes with full-pay students, but they do not. Why not? There is a huge swath of students who can get loans rather readily. And, yes, after dropping out the top-10, the easy loans become the main affordability vehicle, after merit aid is taken into account.</p>
<p>
Two reasons, in my opinion. First, they don’t really need the money. And second, they actually believe in the value of social diversity in the class.</p>
<p>I do think there is something to the idea that Harvard can’t let itself fall behind other top colleges in terms of how much it charges for PR reasons–even though it could pretty easily do away with tuition and fees entirely.</p>
<p>It would be interesting to study what class makeup is like at those few colleges that are free for everybody.</p>
<p>I agree with that observation - to some extent college brands are a luxury good.</p>
<br>
<br>
<p>Naval Academy is free and seems to match US demographics, ethnic diversity, fairly closely. See
<a href=“College Navigator - United States Naval Academy”>College Navigator - United States Naval Academy;
<p>
</p>
<p>No, the sticker price is not set by the Ivies. Just the reverse.</p>
<p>Since most Ivies (not all) and the top four or five LACs have large enough endowments they can hold prices firmer than anyone else. But, they don’t. There is a reason and it is you have your construct reversed. Ivies, regardless of what they can charge, will not allow themselves to have a price that lowers their perceived value.</p>
<p>And au contraire - if colleges want to advance their diversity platform, then market demand IS set by loans in order to get lower than full-pay students. </p>
<p>
I think this is probably true. What they’ve done (at least Harvard and a couple of others), is to make their financial aid unusually generous, including giving “need-based” aid to people who have quite a lot of money. This means that Harvard still gets the students it wants–with the added bonus that some of them are paying a lot of money. What’s not to like?</p>
<p>Except that the price of a good doesn’t have to track inflation. It just has to track the growth in spending power of its targeted customer base. It’s as if you didn’t read the stuff I posted earlier in this thread, @awcntdb. I noted before that growth in sticker price tuition has tracked the growth in income of the top 1% to a decent degree. Also that more internationals looking for a good undergrad education in the US (a rarity 20 years ago) has also expanded the pool of consumers at the top end.</p>
<p>@awcntdb I would be more likely to have my kid drop in an app to Harvard or CMU if the price were lower. I wouldn’t say “ew, their value has gone down hill - look how they’re charging a bargain basement 50k while Yale is at a luxury 65k.”. </p>
<p>Harvard could drop its prices and keep its prestige if it wanted to–it would just make a big PR deal out of it. Perhaps get a big donor to give a lot of money to pay for it–this is what the Yale School of Music did, and it has maintained plenty of prestige.</p>
<p>I’ve noticed though that colleges that did offer free tuition, like Cooper Union & Olin, have had to cut back to half tuition. So maybe it’s not a sustainable thing to do for any college that wants to have a significant number of students?</p>
<p>
</p>
<p>We are coming from the same place with different outcomes. My wife’s dad was chairman of a bank until just recently, and we discussed this all the time at board meetings, i.e., how to allocate education loans given the cheap money that was being thrown the bank by Feds. </p>
<p>Strictest is a very relative term if money can be gotten. The scenario plays out too often - a student who has no income at all can get loans to cover college or grad school for a degree that has zero asset value if the student defaults immediately. And I include Parent Plus loans here, when parents over-extend.</p>
<p>
</p>
<p>Sure, but according to Harvard that would be a different market. Change type of consumer is what indicates a change in market. The top schools want to attract the same market, as they are now.</p>
<p>
</p>
<p>Or instead of looking at it as sustainable, another way to look at it is the actual price was artificially high to begin with. </p>
<p>No company, none, absolutely none, can permanently drop its per unit retail costs 50% and still be viable unless the initial price was overly inflated in the first place OR without drastically and noticeably changing the quality of its product. There is no business math on this planet that supports this drop, as a normal price correction. </p>
<p>The question is what in the world was supporting that inflated price, if the students were not outright full-pay? Not too hard to find the answer because easy money spigots are easy to spot; just ask the people who bought houses 10-years ago. Students (and their parents) are no different today.</p>
<p>Net tuition increase (after fin aid and merit aid) actually has tracked closer to inflation even as sticker price has tracked the growth of top 1% income. That does not suggest that easier loans are the main culprit, as net tuition would be rising just as fast as sticker price if easier loans were the main reason.</p>
<p>@PurpleTitan
</p>
<p>GMTson will be fine; he is a very high achiever/very high stats kid. But I share the same guilt as @patertrium in limiting the schools he can even TRY applying to, considering his profile. We said NO when he wanted to consider Georgetown. </p>