<p>What will happen long term? Will colleges be forced to lower tuition? What happens if large percentages of students have their EFCs fall due to shrinking assets in stocks?</p>
<p>Colleges really need to have an enrollment of X based on their dorms and other facilities. What happens if 10 or 20% of students that were planning on college this year just can't afford it, can't get enough loans, families are gapped too much? </p>
<p>A lot of school have been trying to follow in the IVY footsteps and eliminate or cap loans. How are those schools affected, not those with the gi-normous IVY endowment, but say 500 mil - 1.5bil? Does the new rec center get project get shelved? Do they eliminate the caps and just go back to what they had before. Do kids get gapped out of their dream schools after their second or third year?</p>
<p>One of our state schools just wiped out their traditional dorms ($3300/year) and replaced them with brand new suite style dorms for freshman ($8000/year). Might not look like such a good idea where instate tuition and fees just over $5000 and kids are looking at an INCREASE in dorm costs that is almost as much as base tuition. </p>
<p>The mortgage crisis has had a lot of people complaining about people who spent above their means. Are we going to similar fallout at the college level?</p>
<p>I see that it will be smaller number of very high caliber students from middle class (no need based FA) applying to elite schools that do not offer Merit scholarships. That might increase competition at state schools. It probably was going on anyway, it just going to speed by by current financial crisis. Selective programs and scholarships at state schools will get much more selective.</p>
<p>I think we shall be seeing more “merit” awards. Better to give 20 kids each a $5-10K award and get the rest of the money from them, than having to spend that money on getting just a few kids who can’t pay much at all. This has been done to an extent already, but it’ll be even more prevalent, in my opinion. Those who are willing and able to pay and for whom the college is a “step up” will still pay full freight. As for the very top school, doubt they will be hurt at all.</p>
<p>cpt, I really meant also in a broad sense, across third and fourth tiers, smaller state Us, little LACs. Take for instance a kid where the parents are paying full freight now at a tier 3 LAC. Kid has a 1050 on old SAT and a 3.0 HS GPA. They are not going to get merit aid anywhere. A lot of these types of LAC will give a consistent FA award all 4 years, and as tuition goes up, the student is expected to make it up or borrow more. What happens when the kids with the $35K EFCs go to $15K after the freshman year in large numbers because all of the sudden mom or dad is unemployed and the investments were half in Lehman Bros.. They aren’t going to be able to borrow another $20K a year to get through it.</p>
<p>What if colleges can’t get enough students? At what point and how long is it sustainable for a campus that just built a new $35 million rec center see it’s freshman enrollment drop from 800 to 550? It seems to be a catch 22, schools need lot’s of students to spread these costs around. If the numbers shrink for financial reasons, the college can’t run the risk of increasing tuition or losing even more students. Might some schools lower tuition and forego the new student union building or suite style dorms for a few years? I know a lot depends on the school’s endowment, and I don’t know what schools typically invest in, but they could be suffering the same fate as John Q. Public. There is already the thread about short term money problems.</p>
<p>cpt, who knows who will be willing AND ABLE to pay 5 years from now? Just wondering out loud, but as one who will have at least 2 years with 2 in college starting next year, they are things I think about more and more each day.</p>
<p>I think that students at private schools that meet 70% or less in financial need, will see some empty seats from returning students. I think that they will accept more transfer students from CCs to fill seats. </p>
<p>I think that the 3.3 kid with a 1100 is going to see merit money at 3rd tier private schools. Will the 3.0 kid with a 1030 see merit money? Perhaps they will. Perhaps there will be more merit money for community service leaders, those who are going to play in the marching band, etc. </p>
<p>Frankly the days of awarding 5k in merit aid to fill the vast number of seats I think is in the past, but JMO. We are an upper middle class family, and at some schools 3 years ago, 12k was not enough for a school offering no financial aid to be affordable for us.</p>
<p>I think some of those kids with a 1000 SAT and 2.5 average are going to find themselves getting “scholarships” for community service or something. Mom and Dad can brag that he got a scholarship at XYZ College, which would be a step or so above what he could have gotten without the dearth of full pay students. The college would be happy to get the kids for just a few grand under sticker price. Ability to pay is going to become more and more important for those kids who are not true standouts. And the stellar students are going to have to be even more stellar to get sizeable financial aid or merit awards. </p>
<p>We started this journey wanting to pay for whatever school was the best choice for each of our kids. Now twenty five years later, the economy and jobs are so uncertain that we can no longer guarantee this and it is not wise for us to deplete our resources to pay $50K+ a year for college. My second son really helped us going to a state school and getting a merit award. The third one did not go to his best deal, nor to a state school, but negotiated a merit package to make the cost more palatable. And he is taking out loans, and working to pay about a third of the cost. The others will have to do the same if they want to go to private colleges. Still we are in good shape in that we can afford the state schools. We have family members who cannot. Some of the state choices are $20K+ a year which is still a big chunk of change. Commuting does not lessen the cost that much because it means another car has to join the stable and you get the costs associated with that. We have one cousin who got a very inferior education at his local community college. He was an A/B student there, worked part time and flunked out of his state u within the first term of his transfer because he was not up to standard there. Happens a lot. He really needs to pretty much start over if he wants a 4 year degree, and there are no state options where he lives other than the big state U or community colleges. He will not get a college education unless he moves away somewhere, and that is just not likely. One of those 1000 SAT B-, no honors courses in high school kids, but a good kid nonetheless and had he been born and raised in a family that was proactive in education he would have easily been able to have done better and gotten through some college. He is not a whit less smart than my kids. Just not the background.</p>
<p>Well that B- 1000 SAT student, with parents not willing to pay, or who cannot pay much, will be in a CC. We have the same situation in our area with CCs. Unless you are willing to spend hours riding a bus (no direct bus line to the CC), you will need a car and expensive auto insurance. CC in our area, is not a bargain, but will cost less than a state 4 year school. The same B- student who has parents with the means, will be able to go to a decent 4 year private school. It was that way in past years as well. I know a student at a very good private school. He was that B- student. He did not get merit or financial aid. He had some Ds and Fs in his 2 years of college. He will complete his degree. It might take him 6 years, but he will get there. His parents are able and willing to pay for this. He might get through faster than the A student who had to go to a CC, only to find that some credits won’t transfer, especially toward a major.</p>
<p>Students AND college administrators will not have the access to the funds that student loans afforded them in the past. Colleges will have to learn to get by with less while at the same time providing more value, or risk losing their customer base.</p>
<p>It kind of depends on how this turns out. Keep in mind that the numbers of folks (HS grads) will be dropping in a couple of years). So there will be downward pressure in terms of students. On the other hand, a bad economy tends to push people back to school to wait it out. But in the end if the economy gets really bad, it hurts everything, the endowments will not be able to support reduced tuition.</p>
<p>Our CC enrollment is up by double-digits, which I think will continue. More kids are going to need to try to get a year or two done at a reasonable price, before transferring for that more expensive degree. I just paid an $11.5K tuition payment for Fall at PSU, (only one more semester to pay for, Yay!), which is the net cost for many students after financial aid at many privates…and I don’t know how most families come up with $85K+ for a college education, times however many kids people have. I was fortunate in that I saved from my kids’ births, was shameless in suggesting college fund to relatives when they were small instead of toys or other gifts, and then bought into PA’s guaranteed tuition plan as soon as it was available instead of leaving money in the stock market…and I’m still struggling to put 3 kids through state schools. </p>
<p>One of my kids was talking to a friend at top 10 school, who said his financial aid for the Fall semester hasn’t come through yet, evidently due to the banking crisis. This friend was taking the LSAT, but said he didn’t think he’d actually be able to go to law school due to its cost and lack of funding. He said that the school is working with him to try to get funding for his Fall semester, but he doubts they’ll keep him for the Spring semester so he can graduate. </p>
<p>I recently was talking to lawyers from FL and LA, who told me that they were staying in those states due to the lower tuition programs for their kids. Compared to PA, their tuition is clearly much more reasonable…</p>
<p>This will carry forward into our kids’ futures…a group that has no debt, who can find jobs and save for cars/houses faster, or afford to borrow to go to grad school…a group with a lot of college debt, burdened for 10-20 years with education loan payments…a group that sinks under the debt, or can’t go to college at all. When marrying, our kids will have to look at each others’ debt load. This generation is certainly unlikely to see much wealth transfer from their parents (at least my kids aren’t able to expect much from me…)</p>
<p>Times will be tough for this year’s graduates, who may have taken out monster loans as part of the thinking of the past with the idea of getting that great job in the future. Wonder how many will opt for grad school…which is a great place to hang out in a recession.</p>
<p>NPR did a story this morning about the skyrocketing interest rates on bonds. They interviewed someone at Endicott College. They need new dorms, they are on the drawing board, but the interest rate on the bonds they were going to issue to pay for the dorms has gone up by something like 5% in a couple of weeks.</p>
<p>Among the parents I know who also have kids applying to colleges, I can tell you that the state schools are looking better and better all the time. At a time of job uncertainty, do you really want to commit your child to a $50,000 a year school?</p>
<p>atlanticdreamer,
That is exactly what I meant in my previous post. My D. graduated at the top of her class and never considered elite college. She is a sophmore and very happy at her state school. Her Merit scholarships cover her whole tuition and part of her R & B. However, on the other side of the coin, I realized that kids like this who will apply to state schools in increased numbers will make these state schools more selective. It has been happenning anyway, the current crisis just going to speed up the process.</p>
<p>^^^^
With regards to MiamiDap’s post above. I, too, see the state schools getting more applicants, but in our state of Florida, our state schools are already so huge. University of Florida, University of Central Florida (50,000 students this year), and Florida State are some of the biggest in the country. Florida State and University of Florida are already cutting enrollment this year, and I believe, for the next four years. So it’s nutty already in our state. I have a D with unbelievable stats who’s applied to UF, and I cannot tell her she’s a slam dunk because of the huge numbers of students already applying. Regretably, the closest state school to us, UCF where my son attends, doesn’t work for her. They don’t have her program. Scary, scary.</p>