<p>Thanks for your kind words and so far we are managing college costs pretty well. I’m challenging your statements not because of your political beliefs - not sure what they are - but because you paint a false picture of college economics and put forth an implied proposal to cut government support that would hurt a lot of lower income families chances of attending college. You appear to be connecting the rapid rise of COA’s to government aid, without providing much in the way of support for that view.</p>
<p>@ slumlord, actually the historical data my post #137, not just the quote, referenced the study cited. When the Westminster dean said that increasing financial aid was a double edged sword that led to higher tuition, he was talking about institutional, not federal, aid. By budget trimming, they were able to reduce tuition across the board which led to higher enrollments and less need for increases in institutional aid. Institutional aid is often an overlooked part of the tuition increase puzzle. As costs increase, a school often must allocate more of their budget to student aid or risk becoming an institution with little diversity.</p>
<p>Your child was exceptional in that she received federal aid which allowed her to upgrade schools, which is far preferable than the norm of being forced to trade downward. But she was clearly exceptional in other ways too, judging from the offers she had, and I’m guessing the relatively small amount in Pell and SL subsidies will be “paid back”, or at least paid forward, many times over. Sadly, federal aid does not make even taxpayer funded schools really affordable for the majority of bright, motivated kids. They will end up with large loans and many will drop out due to lack of funding which will make paying those loans back a difficult task. </p>
<p>Graduation rates for Pell eligible students are not good and have not been increasing, which is my pet peeve, and it’s time to find new ways to address that as well! Tying performance to aid, as the ACG/SMART program did, was a start but is being discontinued after next year. SMART was pretty limited in scope and the credit hour limitations built into eligibilty for these programs didn’t make sense. I believe the year round Pell program, which will be responsible for a big cost increase, could be an effective way to do that if the courses it funded by the second Pell grant were tied to actual graduation requirements, instead of just a minimum number of credit hours. It could be done far more cost-effectively if Pell eligible students were not restricted to taking those summer classes at their home institution. Living on campus for an extra six weeks, and paying per-credit rates at a 4 year school, is far more expensive that taking a required intro or gen ed course at a CC close to home where even a 1/2 time Pell ($1337 max.) would likely cover at least 3 courses! I’m sure that would add another layer of verification (course articulation), but I imagine that most students are already checking that out with their home schools before enrolling in summer classes and it would have to be done at some point anyway. </p>
<p>It seems that most people support education funding, even on CC, but would be happier if the funds would actually result in more graduates and brighter futures for the students who benefit. Any thoughts or experiences on this aspect?</p>
<p>I take it as a truism that subsidy increases cost, although education subsidy, to the extent that loans are involved, is a more complicated story.</p>
<p>Our state flagship graduates around 25% of starting freshmen. That is a <em>lot</em> of wasted money.</p>
<p>Federal financial aid is primarily a subsidy to the individual student and not a direct subsidy to the college. The argument is being increasingly made that increases in aid will lead to increases in cost. In my state I see little evidence to back up that “truism”. Yes, Pell grants over the last six or seven years have increased a whopping 35% or so, and naturally people make the connection with increasing COA, which in the case of the publics is around 50% over the same period of time. But the actual per students figures tell a different story. The average public COA has increased around $7,000 and the average private around $11,000. The average Pell Grant has increased around $700. It’s pretty hard to claim that a $700 per student rise in Pell grants to a select group of lower income students has caused the COA to rise that much. It’s also pretty hard to argue that Pell Grants are really providing adequate student support at most colleges.</p>
<p>It would be a lot easier to argue that the easy availability of college loans has led to price increases though. The average student debt in my state has increased approximately $10,000 over the last 6 or 7 years, pretty much in line with COA increases. Now do these easy loans fuel price rises or are loans simply the last resort to paying for cost increases? What’s the limit for loans, where families say, “enough you’re not going there?” Will COA continue to rise so fast at that point? Even at lower priced publics were aid has not kept up with cost, are high loans now a neccessity? Is there a direct relationship between loans and COA. We could also ask, are loans really aid? There’s actually a lot in common between what happened in the real estate industry and what is happening in higher ed. Easy credit at low rates drives up the bubble. In higher ed the bubble hasn’t really burst, it’s developed a slow but increasing leak, and people are starting to question the expense and the value of the product.</p>
<p>No econ major here, but I pride myself on having a bit of common sense. In a market economy, supply demand ratios affect price. Demand is increased by subsidy, insofar as it results in a larger consumer base, and or consumers with more money to spend.</p>
<p>Supply and demand seem to do a perfectly adequate job of explaining the increase in costs, so I don’t know that there is much reason to venture further. And remember, Supply is not just the number of seats available – there’s also a supply and demand curve for faculty, who have many more opportunities today (particularly in science and engineering, though also in quite a number of other departments) for grant funding than they did forty years ago. Today’s college professor at a research university teaches far less than did his counterpart forty years ago. There are also substantially more seats being taken by graduate students than forty years ago.</p>
<p>If you can explain to me using the supply/demand model why COA for privates in my state has gone up almost $12,000 in 7 years, I’ll be glad to hear it.</p>
<p>Speedo,I would like to know how to research how much the COA of privates has gone up in my state over the same period. By COA,do you mean sticker price,or the actual COA after the college, the state,and the federal govt assist the student with the aid package?
Also,do you include in that figure work study? It is my understanding that work study is related to the income of the student,or at least the low EFC people are told how much work study they are entitled to pursue --at least the original offer to D stated an amount that she qualified for. BTW my state is Ohio… Thanks…
Work study was a big component of D’s making college affordable. I always stressed to her how much money she would have to make before taxes and Social Security to pay off her debt and the interest on her debt should she decide to borrow money rather than work.The experience did not lead to an isolated social life either. The big bonus to her work study was that the experience eventually led to her confidence and networking her way to fully fund grad school.</p>
<p>COA is the sticker price. Here are the results for Ohio private 4 year tuition and on campus costs. Perhaps not totally accurate but probably pretty close.
[Home</a> | CollegeInsight](<a href=“College Insight”>College Insight)</p>
<p>You can probably access other sites for this info or piece it together yourself, but it looks like Ohio is about the same - around 11K increase over the last 7 years.</p>
<p>As for work study, for lower income students it’s relatively small amount of the total private finaid package. But that doesn’t affect COA, and your bill will not be affected by work study. The student has the opportunity to work and make that money after the bill is paid. For most low income students work study pays for books, entertainment, travel etc during the year, if the student is able to find a work study job and actually works the hours - at larger state schools especially that can be a big problem. </p>
<p>A typical package for a low income student at most privates will include need based grant or merit awards, pell grant, seog money from the college, 750 in academic achievement, at least 5500 in Staffords and 2K or so in work study. At the very top schools, EFC is met and loans are dropped from the package, but at most privates, EFC is not met, and even with the rest of the package there is a gap, and even at many of the better privates that gap can be 5 to 10K a year. That money is usually made up from summer work, private loans etc. But often the package just isn’t doable - admit/deny. As the costs go up every year, most privates will not meet the increased gap with grants but with additional stafford loans and more gapping. The achievement award goes away after the first or second year leaving the student with an increasing gap often requiring more private loans. Hope that is helpful</p>
<p>Well,thanks for the resource. Very useful.
We used a little book,“College aid for Dummies” and attended college nights when D was a high school senior. They all said, “Don’t worry about the sticker price,it’s the cost of attendance that you need to evaluate”. Of course,they were talking about the gap between scholarships and grants and the final cost that you would have to pull from your pocket or loans. It actually turned out that the highest sticker private was a better deal than the state schools. We are not alone,because when I ask other admitted students why they picked the school,many of them said the same thing. Of course,our experience cannot be used as a statistic for everyone,so just apply to a variety of schools and see who wants to make you a deal.
We did notice that the grants and loan amounts were more for upperclass than for freshmen.Perhaps they expect a freshman to bring in local scholarships the first year? Her student employment is what saved the day–about 1500.00 spending money and a free room
That is the equivalent of about 9 grand in pre-tax income with no worries of making a reporting error on FAFSA. The sticker went from 36.5 to 41.3 in 4 years,but the highest COA as defined above was junior year because of parental income variation.YMMV</p>