<p>Meeting need by offering loans still equals a very high cost of attendance. </p>
<p>30 years ago, my flagship large state well regarded public university cost me about $300 per semester. There simply is no excuse for why tuition has skyrocketed today. Are the professors that much better? Are the facilities that much better?</p>
<p>Back then my very middle class school teacher parents could afford to pay my tuition with no loans, no scholarships, no worries. But now…it’s just ridiculous.</p>
<p>Tatin, I agree. Also, my husband put himself through graduate school by painting during summers, and working as a waiter during the school year. His parents did not pay for much of the graduate school bill. Back then, this was still possible.</p>
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This terminology drives me bananas. Offering someone a loan is not “meeting their need”, it is offering a loan. If someone is hungry, you give them food, you don’t loan them money to buy food.</p>
<p>For most people, virtually everything we buy involves a price/value/affordability analysis - houses, cars, tvs, clothes, food, whatever. How did we ever get away from this for colleges?</p>
<p>For us the tipping point happened when kid #1 was in high school, and the privates went from $40K to $50K, some will be close to $60K by the time he graduates. Sometime in that span, the amount of loans that would be required tipped the value equation for us, and full-pay privates came off the list. #82 above is very like us in many ways (although S got some decent merit at some schools), except we came to our senses.</p>
<p>Notrichenough, I agree with you. However, a lot of kids and their parents don’t look at it that way. It’s frightening how much some families have undertaken in loans. And many kids are buried under them with no way to begin repaying them. I have a 28 year old who has some peers that are not making enough money to pay back the loans. They’ve yet to find the employment that gives them a living wage, much less with anything left over to repay school loans. These last few years have dried up a lot of parents’ financial reserves and retirement funds, zeroed out the home equity and killed a lot of jobs. I’m sure a large number of folks are simply not repaying those loans. How could they when making ends meet is an issue?</p>
<p>I think we’ll be seeing the closure of some private schools in the next 5-10 years.</p>
<p>I don’t think you can discount region and cost of living in comparing family income. It’s oversimplifying things to say you can move to a lower cost region since doing so will likely result in lower family income as well as salary levels generally have cost of living factored in.</p>
<p><q>I think we’ll be seeing the closure of some private schools in the next 5-10 years.</q></p>
<p>On paper this makes sense, but then why is it harder every year to get into good private colleges? The NY Times has been tracking ED and EA apps, and especially EA is up like crazy once again. One of the schools atop my D’s list has EA apps up almost 50% from last year to this year. It’s an expensive place. Kids with money (and great resumes) seem to keep appearing…</p>
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<p>Your key word is “good.” The wealthy will continue to pay $50K+ for the good private schools, and many of the good private schools will continue to offer the best FA, making them attractive to everyone. It is the lower-tier privates that may struggle.</p>
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I agree with this 100%.</p>
<p>I see families and individuals struggling to pay for the community college all the time, so I guess it’s hard for me to get all worked up.</p>
<p>For my older D., the cost of her LAC was less than half of what it would have cost to send her to the flagship state u., even with coast-to-coast travel. AND, when my wife had cancer and then I had a heart attack, they lowered the cost even more. Merit aid, but it simply replaced need-based aid. Included a year in Italy, a fantastic paid research assistantship for the first two years, which she parlayed into a 5-6 year graduate fellowship at Princeton. Very little skin in the game. </p>
<p>For my younger one, the cost of her uni was above that of the state u., but because of great scheduling and fantastic advising, she is finishing in three years, and will use the fourth to get her M.S. and a CPA (and they helped her get many jobs to boot.) Only need-based aid, no merit. Overall, MUCH cheaper than the state u. would have been. Loans quite manageable. (Given her rate of pay, she could likely pay it off in one year, if she chooses.)</p>
<p>We are very, very grateful. Not a penny out of our retirement funds. Not a penny in loans for us. Not a penny out of home equity. And, yes, our income was about a third greater than the median family income ($52K+), which definitely made us upper middle class. As I said, I see families struggling with community college tuition.</p>
<p>With 2 or 3 kids to put through college, some family’s may be able to write checks for $400,000 to $600,000 out of their pockets/savings, and others really can’t. This is not about making $150K a year for the past 5 years while living in a region (the region where those $150K jobs exist) where 3 br homes cost over $600K. To pay for private college for 3 kids usually takes a trust fund or seriously high income (400K plus) over many years. Add graduate school tuition to that.</p>
<p>The top private universities were created for the elite classes who have only in the past 40 years or so begun to offer FA funding to bring in “diverse” low income kids. Why? To enrich the school’s culture? To bring a new spirit and energy to the mix of old money and entitlement? Or, perhaps, to deflect the growing PR nightmare that these ivy-type schools were, in effect, self-segregated, exclusive, educational private clubs. No wonder the middle class, define it how you will, feels the EFC door shut in their face.</p>
<p>Only those schools with large enough endowments and a wish to increase admissions rank and selectivity with regards to academic stats are interested in attracting upper-middle-class super-achievers. That’s what merit aid is used for. I agree with OP–time may soon come when parents can teach their kids how great an opportunity a great state school or merit aid offer really is.</p>
<p>TatinG & notrichenough mention a huge point:</p>
<p>“Meeting need by offering loans still equals a very high cost of attendance”
Colleges brag about 80%, etc… of students are offered FA for “need” (w/ loans) but it doesn’t change the sticker price. Very obnoxious that they get away with this fuzzy math.</p>
<p>3 Yrs ago at college info session one college bragged about COA was about 15+% less then other privates in NE. Guess what-- they changed that policy & tuition is now $52K! (it’s locked in for HS Class of 2009 but after that - tuition skyrocket.) </p>
<p>I like the post: “noone deserves a $200K education…” I agree. The only justification is that it is keeping college doors open & their faculty employed. This is good for our economy. (Just like who should have a $100K wedding? Well they’re spending their money, paying musicians, caters, florists, etc. It helps the world go round.)</p>
<p>Noone deserves a 200k education?</p>
<p>If a family feels it is worth it,for whatever reason,it really is nobody’s business…usually those that complain about prices can 't afford them to begin with…as I mentioned in an earlier post,I’d love to have a Mercedes convertible,but can’t afford it…I don 't bemoan those that have one, I get what I can afford…get the best education you can afford,but don’t cheap out as a parent</p>
<p>Regarding 150K income; if you live in NJ, $150K = $75K after taxes, give or take a few bucks.</p>
<p>That’s more than we made (gross) when my older one was in college, and we were a third above the median income, which definitely made us upper middle glass. </p>
<p>Look - no college expects parents to pay for it out of current income. It is supposed to come from past income (savings), or future income (in loans, discounted for inflation). If upper middle class folks didn’t do good planning, they are no worse off than they were in 1980, when they wouldn’t have considered having their kids apply to the fancy private schools. As a percentage of upper quintile assets, until two years ago, prestige private colleges are the cheapest they’ve been in more than three decades.</p>
<p>The schools that are the most prestigious, desirable, selective are becoming more so. What is happening is that those that are not in those upper echelons are getting hit hard. People are still willing to break into their savings to send their kids to Harvard but are balking at spending the same amount at Harden College (imaginary name). It’s Harvard or the state U or a school that offers merit money. Also these schools that are the most selective tend to be the ones that are the most generous with financial aid, so those who need are likely to get the best packages at these schools. It is a lot easier to make the cut for financial need at Harvard than at many schools, and the aid package will very likely be much more generous. Loans are not part of the package. So you can pay a lot more for a school without the reputation of the Ivies and the like. </p>
<p>A lot of parents are saying that if their child gets into a top rated school, they’ll pay, but otherwise the kids’ choices are among the schools that offer a lot of merit money or have a low sticker price.</p>
<p>I live in a well to do suburb of NYC, and one family we know who does place a high premium on education has had to place limitations on their kids’ choices. They can’t afford to pay full freight for a private college. The dad, a doctor, told me that if either of them were accepted by HPY, they probably would somehow come up with the money. But the 3-4 very good schools that accepted his son were, not, in his opinion worth the $240K that it would cost to go to any of them. He’s going to an OOS public that offered him a generous scholarship. His sister is commuting to an expensive NYC school on a merit scholarship that takes the edge off the high cost and is able to do so since her brother is costing the family very little. Still, she living on campus is not an option for them. The family is not willing to make the financial sacrifice to send their kids to their ideal choices because they feel those choices are not worth the price.</p>
<p>$75K is still a lot of money. There are many NJ families living on that and less. What is the median income for your county? Even in our wealthiest suburbs which are considered among the wealthiest in the country, the median income is about there.</p>
<p>As Mini says, this is not something that is expected to come out of current income. When I was a kid, my parents would give us savings bonds for birthdays, Christmas, special occasions, all to go in the college fund. Half of any gift money, earnings went into the fund. In addition, the put away about 10% of their income for us. So when it came to college, they were able to pay for a part of it, we were able to pay part of it and we worked and took loans out for part of it. My son who is at a private LAC that is up there in cost is getting it met the same way. We had some money saved for his college, we are paying for some of it out of current income and we are borrowing as well. In addition he had money saved for college, he is working part time, vacations and summers, and borrowing. He did get a merit award which helps, a small outside scholarship that just covers the transportation to and from there, and he won a research grant and award this year which also makes a difference. That’s the way we are meeting the cost. Still this school was close to the outer limits of what we could pay.</p>
<p>GREAT post madbean</p>
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<p>So…My question is do you anticipate this level ever will be reached? Do you think enough parents will eventually “revolt”? Will some of these pricey schools ever see applications down, enrollment down, and consequently, endowments down? This will be the only way, from an economic standpoint, prices will fall; it’s purely supply/demand. Currently, schools feel they can charge whatever they want because enough consumers are willing to pay. For those who can’t, full-paying students + endowments can subsidize their tuition. Will there come a time when enough full-paying or near full-paying students decide it simply isn’t worth it?</p>
<p>No. It will never be reached. The colleges have some of those savvy people in marketing/finance around. They will simply raise the price a little at a time. And since the assets of the top 20% of the population are again growing more rapidly than private college costs, private colleges will become ever cheaper, even as bankrupt states raise state university tuition at a much faster rate. Many, many more people find private colleges affordable than ever before.</p>
<p>The folks who will suffer are the folks who always suffer - lower and middle income ($55k) families. A few will make it through to the fancy privates; many will struggle to afford community colleges as the cost of the residential state flagships becomes unaffordable.</p>
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<p>This is one of the reasons I love mini <3</p>