<p>I've been predicting that about 20 law schools will fold in the next ten years. How many four-year schools are in similar trouble?</p>
<p>Colleges</a> Cut Prices by Providing More Financial Aid - WSJ.com</p>
<p>SOG - You need to cut and paste the points you’d like us to read. Access to the article appears to require a paid subscription.</p>
<p>Even with 45% discount, most of the private colleges cost more than twice the tuition of in-state. </p>
<p>With the current economic conditions, where many college graduates are finding difficulty in landing jobs that pay reasonably well, and which provide them the means to gain marketable skills, it is difficult to economically justify the high tuition cost of many private colleges.</p>
<p>Fair use excerpt:</p>
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<p>I’ve always been suspicious of schools that quietly give everyone or nearly everyone a “merit scholarship.” We’ve seen some posted here on CC…lowish-level privates giving substantial “merit” awards for 20 ACTs and such. These offers just seem like tricks to make the recipient think that they’re really turning down “free money” if they don’t enroll.</p>
<p>I’m reminded of a pricey summer program that a friend’s child attended. My friend felt that they “had” to send their child because she had been awarded a $1k merit scholarship for a program that cost several thousand dollars. My friend actually thought it would be a huge missed opportunity to decline that program because of the “free money”. When they went to drop their child off they chatted with other parents, including parents who had sent older children to the program during previous summers. My friend learned that the cost had been recently inflated and that these $1k awards had been given to everyone. So, the price had been increased and awards had been handed out like candy to flatter applicants.</p>
<p>What are some of the colleges giving these merit awards and are they need based?</p>
<p>@shacherry - Here is a thread I started that may provide a subset of colleges in answer to your question.</p>
<p><a href=“http://talk.collegeconfidential.com/parents-forum/1490937-discount-amount-those-who-did-not-apply-ineligible-fa.html[/url]”>http://talk.collegeconfidential.com/parents-forum/1490937-discount-amount-those-who-did-not-apply-ineligible-fa.html</a></p>
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<p>Not really. Uof M and Illinois are running at $30,000 a year for in-state, Michigan State is at $25,000, Wisconsin is at $25,000…and I could keep going.</p>
<p>The private colleges my #2 and #3 applied to managed to come back with packages that made him very similar to our Big 10 schools around $25,000 to $30,000 out of pocket and what we would pay instate…I know there are state flagships that are cheaper in other parts of the country but cheap in-state flagships is not a national given which makes the privates more attractive but only if they are competitively priced and of equivalent caliber.</p>
<p>He said instate which at UW is about $10,000 (Ill about $13,000) so in that case he’s right.</p>
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<p>It requires free registration, not a paid subscription.</p>
<p>The author seems to be conflating need-based and non need-based grants and scholarships as “discounting”. </p>
<p>My impression on CC has been that the term “discounting” is more frequently used to refer to non need-based aid only, particularly by certain posters who seem to have an anti-private and/or anti-merit bent.</p>
<p>Economically, both financial aid and merit aid are forms of price discrimination and really aren’t fundamentally different from the way airlines and hotels sell their capacity. The difference is that, for colleges, need-based discounting (i.e., charging less to those with less ability to pay) is thought by most people to create positive social externalities, while many believe that merit-based discounting does not create such externalities.</p>
<p>“Folding” will be determined by the strength of participation by alumni donors to the endowment. </p>
<p>It’s hard to believe that the little NESCAC schools with less than 2000-ish students have endowments in the 1.5 to 3 billion dollar range, and rising.</p>
<p>But then again, it’s not hard to believe, since these schools are the ones attended by the “always trending for future needs” types.</p>
<p>When upper middle-income families show “need” to pay $50k.yr in tuition for one kid it stretches the definition of need. Do they really need such a school to begin with or is it really a choice that just needs a push (discount)?</p>
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When I think of all of the small private colleges in the greater Cleveland, Ohio, area, I wonder about this, too. Or here’s a Buffalo article on the very nice Canisius College, from Sunday’s paper: “Like many schools, its revenue depends largely on tuition, but more than ever, students and parents are pushing back against rising college costs and shopping for better deals. // And while Canisius has dangled generous aid to lure students, the college cannot afford to keep discounting tuition as it has in recent years. // All of this has left Canisius facing a recurring budget deficit that may require some difficult changes at the Catholic college founded by the Jesuits more than 140 years ago.”</p>
<p>[Canisius</a> shares U.S. colleges’ fiscal challenges - The Buffalo News](<a href=“http://www.buffalonews.com/20130504/Canisius_shares_U_S_colleges_x2019_fiscal_challenges.html]Canisius”>http://www.buffalonews.com/20130504/Canisius_shares_U_S_colleges_x2019_fiscal_challenges.html)</p>
<p>barrons said:
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<p>Why single out “upper middle-income families”? Why single out any income bracket at all? </p>
<p>For various reasons,some families are receiving discounted tuition. For some it is to provide incentive to attend to create ethnic and socioeconomic diversity within the student body. For others it is to incentivize a substantial cash pay for enrollment, albeit not full price, to avoid no enrollment. Either way, it is an incentive. Why is it “more right” for only one group?</p>
<p>M</p>
<p>Because I wanted to make my point and its my post. Feel free to do your own.</p>
<p>Cash incentives historically have not held up continually over long periods of time. Generally the market cycle will eventually move to what marketers call “value” pricing. I suspect that at some point colleges will no longer be able to fund cash incentives out of profit and will simply have to price what the market can sustain. It’s a zero sum game when the “purchaser” comes and goes in 4 years and constantly needs to be replenished…afterall you don’t “buy” multiple bachelor’s degrees.</p>
<p>“When upper middle-income families show “need” to pay $50k.yr in tuition for one kid it stretches the definition of need.”</p>
<p>$50K (really $60K) per year is a huge chunk of money for many upper middle class people, many of whom have several kids, and other expenses. No, no one need to go to these schools, but upper middle class people don’t need to less than anyone else. Or maybe I misunderstood you?</p>
<p>barrons, I’m not sure then that I understand your point. Why does anyone deserve a discount?</p>
<p>I’m more in alignment with momofthreeboys. Right now the market is skewed. Every private institution is basically priced the same. Discounts from the full price determine the “real” price of an institution. If they priced themselves at that level, then they wouldn’t have to offer merit aid, but they don’t. Everyone thinks they are worth what Stanford charges, but market forces are saying otherwise.</p>
<p>M</p>