Economy Forces College Hopefuls to Lower Sights

[jym626]

From the Wall Street Journal:

While many parents and students have long emphasized getting into a top school over financial considerations, families in recent months have seen the value of their homes decline, their investments dramatically shrink and sometimes monthly incomes lost due to layoffs. Other students who in the past would have taken on thousands of dollars in debt, are being stymied as lenders tighten access to loans amid the global credit crunch.
Many college-age kids are setting their sights on less prestigious and lower-cost colleges or adding "financial-safety" schools to their lists as a backup. Some students are considering spending their first two years at a community college, while others are focusing on schools closer to home to save on fuel and housing costs. Students stuck on going to their top-choice colleges are trying to help out by getting after-school jobs and increasingly applying for scholarships.

MeritAid.com, a scholarship Web site, found in a survey this month that 57% of prospective college students say they are "now considering a less prestigious college due to affordability." The survey, of 2,500 high-school seniors, also showed that 16% of students say they are "now putting their college searches on hold because they don't think their families will be able to pay for college."Families are saying, "We can afford to apply now, but who knows what will happen" in the spring when it is time to pay tuition, says Tom Bottorf, co-founder of Get College Funding Inc., a college-counseling firm.

Economy Forces College Hopefuls to Lower Sights - WSJ.com

[jym626]

This will definitely be an interesting year for college admissions. I think the colleges will have to cast a wider net and will perhaps look more favorably on the students not requesting FA. I have to wonder if the "need blind" schools will have challenges meeting the financial needs of their applicants, as surely their endowment investments have been hit hard too, and current students weill likely be asking that their FA be reviewed and reconsidered. I suspect there will be a lot more campus jobs offered to students needing aid!

[jym626]

gee, it looks like I am alone posting in here... I am a bit surprised.
I did see this interesting message today from the president of Vassar about Vassar's financial situation:

Earlier this week I wrote to the on-campus Vassar community about the College’s current financial situation. Today, I am writing to you, our alumnae/i. It will come as no surprise that the current global economic uncertainties are having a direct effect on the College's own financial situation. The endowment – the source of approximately one-third of Vassar's operating support – ended the most recent academic year on June 30 at $845 million, up 0.5% for the year. This return exceeded our benchmarks as well as the returns of many other colleges, but was not the 8.5% average return for which we had originally budgeted at the beginning of 2008. Since then the endowment has seen declines in line with market conditions. We are fortunate to have a significant endowment, which supports our spending in normal times and protects us in times of uncertainty, but we must also act to protect that endowment for the future.

During the recent meeting of the Board of Trustees, we agreed that the College should plan for negative returns on investments this fiscal year, and we are taking steps to control current operating expenses and adjust plans for next year’s operating budget. In light of the current economic uncertainty, we also agreed to develop contingency plans for managing the College in the next few years that do not rely on significant increases in the amount being drawn from the endowment.

There was an equally strong consensus about the need to protect our priorities as we consider our responses to the current economic challenges. These priorities include need-blind admissions and meeting the full financial need of our students for all four years, competitive compensation for our faculty and staff, and continuing to address the needs of our beautiful but aging physical plant. We must try to protect these as we consider our responses to the current economic challenges, and I am working closely with the College’s senior staff and faculty leadership to control expenditures this year and in future budgets.

In keeping with the values that we all associate with Vassar, we will seek to be sensitive to those in our community most affected by the current economic uncertainties, including many of our students whose families may be experiencing significant economic challenges.

I am confident that we have the ability to manage the current challenges facing us in ways that will leave us stronger in the future. Our aim is to make sure that the changes we make now will be consistent with preserving and strengthening the most important core values of the Vassar community, including:

An exciting academic program that is not only strong in the humanities, social sciences and natural sciences, but also in multidisciplinary programs;

A talented and diverse student body;

A faculty and staff dedicated to the educational mission of the College;

A sense of community and common purpose among our faculty, students, staff, administration, Board of Trustees and alumnae/i;

Strong connections between Vassar and its immediate and extended communities; and

Stewardship of the beautiful physical environment that is Vassar’s home.
I know that the current economic condition must also be affecting many of you. I hope that all is well. I also know that I am grateful for the good will and ongoing support Vassar receives from its dedicated alumnae/i body. Thank you for all that you do for your alma mater.

Sincerely,

Catharine Hill, President
Vassar College

Comments, anyone?????

[livesinnewjersey]

As my S sends off applications, I am all about finding the "financial safteys". This is a big change in our strategy from 2 months ago. S was alittle reluctant to hear it at first (hey we've been saving!...)... but now all bets are off ! Unfortunately NJ's state schools are at the bottom of the list. Wish we lived in VA, FLA, PA, NY,GA,NC.... However, our Govenors are way more interesting than anyone else's except NY!

The upside for the class of 2009 is that the financial reality check came before committing to a Univ.

[starbright]

^ I love your positive spin on it. You are so right.

I do worry about kids caught in the middle. That is, they turn to financial safeties which might be state schools, then state schools slash their budgets (like California or Wash-- I know people teaching at these places and they are already hurting). Or they turn to smaller colleges, but ones that don't survive the inevitable consolidation from the financial fallout.

[katie443]

livesinnewjersey, I am also in NJ. It does seem like our instate schools aren't that much of a financial safety, doesn't it? I mean compared to other state's instate costs.
My dd's financial safety is an out of state public school.

[ellemenope]

I agree that it's good that the bad financial news came quite early on in the admissions cycle so that families could adjust. Even families who have saved for Junior's college are asking themselves what are the chances that Dad will still be employed or what if the market doesn't improve in 2 or 3 years or for retirement. A "short" recession can be handled; but a long one?

I feel for the families who are half-way through an expensive college with a kid.

[atlanticdreamer]

Absolutely right - I feel very lucky that our kid is a senior this year and so we are well aware of this factor while considering colleges. We are also lucky that his taste runs to big state schools rather than LACs. I have told him tho repeatedly that the competition will be tough this year for the in-state flagship school, which is high on his list.

[jym626]

There were kids scrambling at the beginning of this academic year because their student loans fell through at the last minute. I agree with ellemenope--it is the lesser of two evils, I suppose, that this happened before students were too far into the application process, and have the opportunity to balance educational safeties with financial safeties. I am glad we are done with older s's college, and younger s's mantra is "keep the scholarship" . I posted an email (above) from Vassar about its financial situation... and just got an email from Tulane as well about theirs. Have others gotten similar emails about the financial status of thier alma maters or their kids schools?

[twinmom]

Fortunately, Vassar's email to both students and alumni included the following:

These priorities include need-blind admissions and meeting the full financial need of our students for all four years.

[Pharmagal]

LivesinNJ,

I wouldn't write off all NJ state schools. We selected TCNJ last year over some Boston schools (with 50% tuition scholarships). After the admission letters came through, we sat down, and did the math, it turned out that 3 years total expense at TCNJ (with full tuition scholarship) equalled 1 year in a Boston Institution (despite the scholarship). Since DS was accepted in a BS/MD program at TCNJ, it beat out all other admissions hands down.

TCNJ is considered the Public Ivy in NJ. It may not be anywhere as well known as CUNYs or SUNYs but it's been in top ranking public Colleges for a 13th year in a row.


Best Colleges - Education - US News and World Report

barronsbestbuy

TCNJ again tops list of NJ publics in Kiplinger’s Personal Finance 2009 “Best Value” ranking

TCNJ tops U.S. News List of Best Colleges for 17th consecutive year; receives new rank as a top Up-and-Coming School

[thumper1]

DD is a junior in college. I just hope that the bills don't go UP next year...

[Pharmagal]

Also wanted to add that last year, Rutgers was offering DS more money than TCNJ ($39,000 for 4 years) but S wanted to go to TCNJ as he did not like the spread out campus at Rutgers too much.

[northeastmom]

Pharmgal, TCNJ is a wonderful school. Our instate schools are not that great, and not a bargain, however, for the B student. Your son must have had very high stats, so for your son TCNJ became a very good option.