WSJ: College Loans Hit Upper Middle Class Hardest

<p>I seriously doubt top schools will have to become creative about filling seats.</p>

<p>No, romani, I’m talking about the SUPPLY-exceeds-DEMAND schools, the ones whose tuition/COA has risen in lockstep with the Top 20’s, the wannabes. And now, for them, it’s like the emperor’s new clothes where parents who used to write checks indiscriminately to these colleges are finally realizing that they’re not worth the money. And freshman spots are going unfilled. This is happening & is the first step in the righting of the system.</p>

<p>Top 20’s are not going to change their modus operandi financially for the foreseeable future.</p>

<p>Can you give me a example of these types of schools? I haven’t personally heard of any and would be interested in learning more.</p>

<p>If that single parent child went to a top school with lots of aid, then likely the NCP doesn’t earn much either. Nearly all of the top schools that give the best aid include NCP info as well. </p>

<p>Blindly comparing incomes doesn’t really work. </p>

<p>A family that earns $60k with one wage earner can have more discretionary income than a family with the same income from 2 wage earners. Having an at-home spouse can save a family a lot of money. </p>

<p>A family that qualifies for free/reduced breakfast/lunches and other bennies can have more discretionary money than the family that just misses the threshold and must either provide meals or give lunch money everyday. </p>

<p>A family with wage-earners that have jobs that are rather “costly” because of professional clothing and grooming demands, etc, have less discretionary income than a family with the same income that can come to work wearing anything.</p>

<p>A single parent with 1-2 kids who earns $60k can have more discretionary income that a 2 parent household with 1-2 kids with the same income. Having that 2nd adult in the household is costly to the family. (I know, FAFSA does account for that, but people seem to automatically assume that the single parent always has it financially more difficult than a 2 parents household with the same income.).</p>

<p>NO, Kelsmom, our EFC wasn’t even close to that, WAY below that. Do the math based on the income range that was stated upthread.</p>

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<p>I most certainly can do the math, which is why your post about your real-life situation made no sense to me. I guess I did misunderstand (remember, I said maybe I misunderstood …). Still makes no sense to me, but whatever.</p>

<p>Romani lives in my state, which has cut all grant funding for students, as well as funding to the state colleges themselves. Unfortunately, our state has NO money, so it is understandable in terms of the bigger picture. We need to concentrate on getting our K-12 system fixed (because it sure is broken for a lot of kids). I have seen the state budget, and I do believe we really do not have money for higher ed funding. We have to fund our safety net programs for kids, fund K-12 properly, shore up our mental health system, etc. It is a sad reality.</p>

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<p>[Tuition</a> & Fee Info for Lafayette College](<a href=“Best Colleges - Rankings, Statistics & Data - CollegeStats.org”>Best Colleges - Rankings, Statistics & Data - CollegeStats.org)</p>

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Everyone is lost on your math here. You ran the numbers, and got a figure of $47K/year at meets-need schools, but your EFC was WAY less than that? Wouldn’t your COA have been your EFC, by definition of a “meets-need” school? Or was your EFC still WAY too high to be reasonable?</p>

<p>Anna, is Lafayette having a problem filling seats? That’s what I was referring to.</p>

<p>Admittance at Lafayette is 40%. If they were having filling seats, wouldn’t it be higher?</p>

<p>[Lafayette</a> College - Forbes](<a href=“http://www.forbes.com/colleges/lafayette-college/]Lafayette”>Lafayette College)</p>

<p>Aren’t there quite a bit more schools than twenty that meet full need?</p>

<p>My daughter graduated from Lafayette in June. We are a low 6-figure family with an EFC of about $23K. Lafayette FA actually did a thousand or so better than the Federal formula for us. Our deal was that we’d pay for her undergrad and she’d pay from that point on. She was fortunate to get into a PhD program at Notre Dame that pays her enough to support herself for the next 5 years without our support. </p>

<p>Her younger sister starts college at F&M this week. So far the FA there also looks doable. I recognize each case is unique, but this is one somewhat above average middle class family that’s able to manage college costs without eating dog food and exchanging the 2003 Mazda6 for a pair of roller skates.</p>

<p>^^ [Colleges</a> That Claim to Meet Full Financial Need - US News and World Report](<a href=“http://www.usnews.com/education/best-colleges/paying-for-college/articles/2012/02/16/colleges-that-claim-to-meet-full-financial-need]Colleges”>http://www.usnews.com/education/best-colleges/paying-for-college/articles/2012/02/16/colleges-that-claim-to-meet-full-financial-need) </p>

<p>62 according to that. </p>

<p>And that’s not counting places like U of M which meets need for instate students.</p>

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<p>My state is near bk, but yet we provide free college educations (at UC) to the poor and low incomers! (Cause and effect? Nah.)</p>

<p>^ Well ours has no funding for students of any income bracket so…</p>

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<p>Except your need differs from college to college on that list.</p>

<p>Ds school isn’t on the list( admittdly, they are not fans of US News)They use PROFILE & are need -aware, but they meet full need & our PROFILE EFC was the same as FAFSA.</p>

<p>The list of colleges meeting full need may be relatively short, but it is only the schools that meet the needs of 100% (on average - not sure what they mean in this case) of their undergraduate students. Many publics don’t make the list, because they don’t meet 100% need for OOS, but do in fact meet it from in-state students. Then you also have schools like JHU which met 99.7% of need. I would consider that meeting full need, given that calculations can vary a bit anyway. Vanderbilt made the list this year, but fell short in 2011. Washington and Lee was on the list for 2011, but missed it in 2010. There may be significantly more schools that come pretty close to meeting full need.</p>

<p>I predicted many years ago, when my oldest was going to college and we were choking on his costs, that the prices could not go much higher except at the very top schools where folks are willing to cut of their right arm to get to send their kids. Maybe it is starting to happen, but not at the pace I had thought it would. College costs have galloped even higher than projected even as savings and interest/returns in savings have plummented. And yet schools that cost close to $60K a year are still accepting at less than 50%. </p>

<p>However, I am hearing through the grapevine that “summer melt” figures are pretty danged high. I do not envy the admissions people these days. People are applying to many, many more schools and a lot of the data that admissions uses is dated, given the number of apps that the average student who applies to competitive colleges, submits. I understand there has been a lot of "horse trading’ with the waitlist these days, and some unusual deal that colleges are offering, like “you are accepted but you come in the spring” or “you must go abroad this term to be accepted”, or guaranteed transfer admissions with a B average at your accepted college. Given how the economy and job situation has been, it’s been remarkable to me that these colleges are STILL INCREASING PRICES and still enjoying some selective accept rates. So if my prediction is true, and there are signs that it is happening, it is a very slow process, shored up by the availability of student loans on terms that no lender would give money to anyone for any other reason. </p>

<p>As for living like you make $60K when you make $90K, even if you stuff that extra after taxes and other costs associated to making the higher amount, under your mattress and get zip in interest and returns, you will be doing very well in a few years, not only in college costs but for a lot of other things in life. Americans are simply not saving. I saw the Time or Newsweek stat on what we are saving as individuals/families in this country, and even if it is way off, it cannot be off enough.</p>

<p>As for families who are making low 6 figures, if you had lived like those families who are getting a lot of financial aid due to low income/low assets, but had just stuffed the excess under your mattress, you wouldn’t need the financial aid. Plus you’d have the flexibility of spending the money on what you want. That is what you are being “charged” for in the financial aid process–you could have been saving that money whereas the low income family never had it to save.</p>

<p>The big failure, of the financial aid system, of course, is the snap shot nature of it that assumes that every family has been making money in a certain way, so that those who just got a great windfall of a job paying $90K are treated in terms of past earnings assumptions, the same way that someone who has been making that amount or working slowly up to it over the years. But still, that does cover most people. </p>

<p>The process is not going to be fair, no matter what. How anyone can make it fair, is beyond me. The top schools with the top prices tend to be private and they can spend their money anyway they want. I don’t hear parents crying that they can’t afford to send their darling genius stuck in the local school system that is not close to meeting his needs, to Phillips Academy in Andover or Exeter or Choate Rosemary Hall. Why is it that at age 18 the University of Vermont is not good enough for your kid, when you had him in the public podunk schools for 12 years? No reason why he can’t go to the state schools and earn a paid spot for graduate school. It tends to be a more level playing field then as even the more affluent parents can’t or won’t pay for post UG education.</p>

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<p>I appreciate your anecdotal data on the summer melt. I haven’t seen
any of this myself but I haven’t been following closely this summer.</p>

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<p>Northeastern University. I was pretty surprised when I found out that
a relative was going to be studying in another country - I expected
her to be in Boston this fall. I spoke to another person with a
student at Northeastern and she knew about the study abroad the first
semester thing too - she didn’t know what the selection process was
for those students.</p>

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<p>I recall watching the mortgage bubble unfold and this was in 2002 and
2003. We couldn’t believe what was happening back then but it took two
more years for prices to peak and two additional years before things
fell off a cliff. I have seen other markets like this. They go further
than anyone thinks possible based on fundamental reasons and then they
fall off a cliff.</p>

<p>There is a higher than usual summer melt at a few school. How hard it will hit the final numbers remain to be seen, as transfers and waitlisted reserves will be called, as they are being done even now.</p>

<p>NYU, Cornell, Penn State are all doing this with alternate admissions plans, as well as UMD CP, that I know about. None of this is brand new. Apparently some of this has been happening for a long while, but it is now becoming more common. Also selective colleges are buying ancillary schools and sending kids there (NYU is one example) with some stipulations that have to be met for them to transfer into the main school.</p>

<p>That’s kind of like subprime loans being a small part of the market and then getting wider adoption to extend the housing bubble and banking profits.</p>