FAFSA for "Upper Middle Class"?

Paying for College
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Colleges use 5% or less of their endowments to pay for financial aid. No part of tuition revenue goes into the endowment - tuition revenue is used to fund ongoing costs. If they cut out financial aid it would actually REDUCE revenues --that is is why the merit-granting colleges use enrollment management strategies to calculate their aid. An unfilled spot costs the college more than a someone who is paying 50% tuition. </p>

<p>It works the same as the airlines: if there were no discount tickets it doesn’t mean that air fare for everyone would get cheaper. It means there would be less planes flying. The airlines use high priced “business class” to entice people to pay for tickets, and they use the low cost economy fare to fill the plane. As to colleges: if they cut out all need-based financial aid - the top eschelon – HYP-- would just become bastions for the richest and most privileged, and they would probably charge MORE because they would no longer be competing with lesser-ranked schools for students. They would just market themselves as more special and exclusive to appeal to an even richer clientele – you’d probably see an influx of very wealthy foreign students, and you’d probably see improved amenities like more nicely appointed residence halls. So tuition at Harvard would be $80K a year, and for $50K a parent could opt for a school like Duke … and for $20K or so a year you could send your kid to a lower ranked private. </p>

<p>There is absolutely no shortage whatsoever of parents willing and able to pay full tuition at the top schools. The only question really would be where the drop-off point would be in terms of tuitions – you’d end up with price being much more closely tied to perceived value. </p>

<p>The problem from the college administrators standpoint is that they would lose a major source for their brightest and most capable students.</p>

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<p>“Colleges use 5% or less of their endowments to pay for financial aid. No part of tuition revenue goes into the endowment - tuition revenue is used to fund ongoing costs. If they cut out financial aid it would actually REDUCE revenues --that is is why the merit-granting colleges use enrollment management strategies to calculate their aid. An unfilled spot costs the college more than a someone who is paying 50% tuition.”</p>

<p>It’s just accounting.</p>

<p>“It works the same as the airlines: if there were no discount tickets it doesn’t mean that air fare for everyone would get cheaper. It means there would be less planes flying. The airlines use high priced “business class” to entice people to pay for tickets, and they use the low cost economy fare to fill the plane.”</p>

<p>Airlines seats have ultimate perishibility. Business class and coach passengers have different travel priorities and abilities or desires to pay. So you have an inefficient market which the airlines can exploit - especially as airlines are in control of the prices and control who sees what.</p>

<p>“As to colleges: if they cut out all need-based financial aid - the top eschelon – HYP-- would just become bastions for the richest and most privileged, and they would probably charge MORE because they would no longer be competing with lesser-ranked schools for students. They would just market themselves as more special and exclusive to appeal to an even richer clientele – you’d probably see an influx of very wealthy foreign students, and you’d probably see improved amenities like more nicely appointed residence halls. So tuition at Harvard would be $80K a year, and for $50K a parent could opt for a school like Duke … and for $20K or so a year you could send your kid to a lower ranked private.”"</p>

<p>That’s kind of monopolistic behavior. Perhaps we should treat private colleges as utilities.</p>

<p>“There is absolutely no shortage whatsoever of parents willing and able to pay full tuition at the top schools. The only question really would be where the drop-off point would be in terms of tuitions – you’d end up with price being much more closely tied to perceived value.”</p>

<p>This is why we need deflationary depressions.</p>

<p>“The problem from the college administrators standpoint is that they would lose a major source for their brightest and most capable students.”</p>

<p>I don’t think that they really care about that.</p>

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That will only impact the college tuitions if the wealthiest are the hardest hit.</p>

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<p>I think I’m beginning to experience a personal deflationary depression reading this thread : )
N’Eastern mom, thanks for your comment.
I just learned at a PTSA meeting last night that our G/T program has lost its Librarian/Media Specialists due to budget cuts. The building administrator wanted to “keep cuts away from the classroom.” Somehow the connection between literacy, research skills, a well-funded media center, and performance in the classroom on an IB curriculum is lost on those who determine our budgets in the public school system. I suppose that is a symptom of not properly educating these folks to begin with. This is the world we continue to create every time we allow our fear of scarcity to override our humanity and our basic responsibility as citizens to adequately fund education for EVERY student. Little wonder our urban centers rot while we look for cheaper shoes (no disrespect in that comment, btw, I like good shoes too :)</p>

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<p>Kmccrindle – you bring up an interesting point – we all want school budget cuts to be more for admin – yet defining educational people is difficult.</p>

<p>My main complaint, with my Ds school, which is suberb, is that they use an assistant superindent to do much of the reporting required. I agree paperwork demands are huge and annoying, but they dont need to be done by assistant superintendent.</p>

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<p>"That will only impact the college tuitions if the wealthiest are the hardest hit. "</p>

<p>They have been the hardest hit.</p>

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no it’s not. those with big endowments can subsidize the tuition of poor students - some can take care of all poor students.
If College A admits student B who comes from a family of limited means - they don’t raise the tuition for your child to pay for that. </p>

<p>Face it - kids from families with the income and assets to pay for a college education have MORE choices in higher education, regardless of academic qualifications.
It’s better to be rich and average than poor and brilliant.</p>

<p>If Harvard decided tomorrow to eliminate financial aid, I doubt tuition would decrease.</p>

<p>BCEagle - while it’s true that the more you have the more you have to lose but losing half of one’s portfolio still puts you ahead of those who didn’t have a portfolio to lose.</p>

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<p>“no it’s not. those with big endowments can subsidize the tuition of poor students - some can take care of all poor students.
If College A admits student B who comes from a family of limited means - they don’t raise the tuition for your child to pay for that.”</p>

<p>Sure it is. They could just lower the overall price.</p>

<p>My son’s uni system basically said that they’re raising tuition to provide additional financial aid. That’s about as honest as it gets.</p>

<p>“Face it - kids from families with the income and assets to pay for a college education have MORE choices in higher education, regardless of academic qualifications.
It’s better to be rich and average than poor and brilliant.”</p>

<p>They have more choices for cars too but they don’t have to subsidize those with less expensive cars.</p>

<p>“If Harvard decided tomorrow to eliminate financial aid, I doubt tuition would decrease.”</p>

<p>That’s because they have pricing power. Would doesn’t mean could.</p>

<p>“BCEagle - while it’s true that the more you have the more you have to lose but losing half of one’s portfolio still puts you ahead of those who didn’t have a portfolio to lose.”</p>

<p>It certainly can if the liability side of your balance sheet is high.</p>

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<p>As in all free markets, there is a lot of inefficiencies. The top colleges want the best of the best regardless of ability to pay, but even then, they leave out a large portion of the student population. Any kid who does not have parents or guardians who will support the process is not likely to go to these schools at any family income level. I’ve known a number of folks who just plain out won’t fill out the financial aid forms, often in divorce situations. You can’t get aid if you don’t fill out the forms. Then there are those who have the ability to pay, according to the colleges, but the parents won’t or can’t pay, and that is the end of that. This is not a small portion of the population. Most of these kids don’t even bother to apply to the expensive schools when they know they are in this predicament. </p>

<p>There is absolutely no question, in my mind, that the more assets and income a family has, the more choices they have. Yes, there are exceptions to this statement, but for the most part, that is the case. Families like ours have the luxury to consider which schools are worth making financial sacrifices for and planning and saving for. What this does is put the the onus on the parents who have to make this decision, not the kid.</p>

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<p>Yes, the UC system did this for the upcoming academic year. (Sorry, there is a press release, but I cannot readily put my fingers on it). They raised tuition by about 9%, of which one-third will be used specifically to fund the new program allowing the under-$60K students to go free.</p>

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very very few colleges and very very few kids. the “best of the best” are hardly ever considered to be from the “average” public school without resources to “enrichment” opportunities and advanced classes - regardless of their potential or inner drive or intelligence.</p>

<p>BCEagle - if your son’s college raises tuition to subsidize FA then you have the CHOICE for him to go else where. take your son and your money to another school. </p>

<p>Kids who are needy don’t have that choice.
Look at the posts - how many from kids who get into top schools only to be denied financial aid. Kids can’t go to private college - or even most state colleges on your tax dollars alone. Federal grants and loans only subsidize a small part of tuition, room and board.
If you decided tomorrow not to support your adult child then he could go on here and tell his sob story to the world and get sympathy. Even as an independent student he would not get enough financial help to continue his education.</p>

<p>Offer up solutions - get rid of financial aid? make all kids “independent”?</p>

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<p>I’ve always felt that way, Justamom. The money is not there to do this. That’s the problem. Maybe if the colleges stripped the amusement park frills that US colleges are unique in having, then the costs can be greatly lowered. In most countries, the universities offer the courses and things directly needed to have the courses. They don’t have the ECs, teams, facilities, entertainment that our schools provide. This is where a lot of the costs occur. My brother’s European in-laws are intrigued with the US portrait of college where kids are sent away to college for 4 years. That it is a minority of kids who have that luxury is something they did not know.</p>

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<p>Oh, the packages for independent students are hardly generous either.</p>

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<p>“BCEagle - if your son’s college raises tuition to subsidize FA then you have the CHOICE for him to go else where. take your son and your money to another school.”</p>

<p>It looks like Federal stimulus money will take care of two-thirds of the fee increase. His school is already cheap, he has some merit money and there are tons of businesses in the area looking for interns and grads. The buildings feel like communist 1950s era (an Atana-ish comment) but the education is top notch.</p>

<p>“Offer up solutions - get rid of financial aid? make all kids “independent”?”</p>

<p>Get rid of subsidized loans. Get rid of financial aid. Direct government funding of university education for those that can get in. The European model. Get rid of the incentives to getting into a bidding war on price in the wrong direction.</p>

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<p>I don’t know exactly what the Eurpoean Model is - but does it not contribute to a society of social classes? At least in America we like to pretend we are a classless society. We do direct government funding to those who can get in. Plenty of kids can get in - they just can’t go.
Those who can pay should pay. They want to pay because they have choices that way.
Why should a family making in the top 5% of all families get financial aid when kids from poorer families are denied attendance because they CAN’T pay.
There is a huge difference between being able to pay and being willing to pay.</p>

<p>Pre-WWII there was no financial aid. We could go back to those days but most people didn’t go to college. College was for the wealthy - not necessarily the most qualified.
After WWII - the GI Bill kicked in and college was open to the masses. I would like for it to still be open to the masses.</p>

<p>BCEagle - are you a Libertairan by chance?</p>

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<p>“I don’t know exactly what the Eurpoean Model is - but does it not contribute to a society of social classes?”</p>

<p>I work with a guy from East Germany that grew up pretty poor and he went to university on the government dime because of merit. I’ve heard that there are class issues but they are clearly not universal.</p>

<p>“At least in America we like to pretend we are a classless society. We do direct government funding to those who can get in. Plenty of kids can get in - they just can’t go.”</p>

<p>They provide technical education for those that don’t make it into university. I don’t think that’s that bad an idea. We make it available at low cost through our community college system but it can be a confusing way to navigate a technical education.</p>

<p>“Those who can pay should pay. They want to pay because they have choices that way.”</p>

<p>Everyone wants a discount or doesn’t want to subsidize the next guy. I run into a lot of wealthy people that have their kids go to their local state schools. One of the contributors to wealth is in assessing the relative value of a product and a subsidized state university education (which they are subsidizing anyways) seems like a better deal than private universities. The prestige thing doesn’t matter at all. Perhaps there are more wealthy or upper middle-class that think this way.</p>

<p>“Why should a family making in the top 5% of all families get financial aid when kids from poorer families are denied attendance because they CAN’T pay.”</p>

<p>Why should a family making in the top 5% subsidize families that get financial aid?</p>

<p>“Pre-WWII there was no financial aid. We could go back to those days but most people didn’t go to college. College was for the wealthy - not necessarily the most qualified.”</p>

<p>My mother got her college degree back then. She had no support (father would only pay for sons to go to college). She managed to get her degree from what is a very expensive private today.</p>

<p>“After WWII - the GI Bill kicked in and college was open to the masses. I would like for it to still be open to the masses.”</p>

<p>I see a lot of waste in college - especially kids that flunk-out after one semester or two or kids that clearly aren’t cut out for college. I think that government supported aid should be reigned in.</p>

<p>“BCEagle - are you a Libertairan by chance?”</p>

<p>No. But don’t assume that I take a particular position just because I argue for it.</p>

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<p>BCEagle - just wanted to say I may not agree with every point you made here, but I respect your opinion, and I like how you express yourself. </p>

<p>that’s the best thing about CC, a civil discourse. I would never get the the POV from as many people IRL as I can here.</p>

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<p>“More” than who? Those who aren’t wealthy or upper middle class? Yet there are those who are wealthy or upper middle class (or who, at least, have a high income) who don’t think that way, apparently, who expect their offspring to go to pricey private colleges, and are looking for financial aid so they can save their money for other things. That is different from those who are looking for financial aid so their kids can attend school at all.</p>

<p>Please note that I have not said there is something wrong with wanting to save money, nor have I said there is something wrong with anyone, upper, middle, or lower class, who hopes his/her spawn can go to a pricey private college. </p>

<p>:: polishes her glass house ::</p>

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Because the children of the lower 95% are far more likely to use their educations to pursue careers the fill the essential services that keep society going, and without which the upper income people couldn’t function – like becoming teachers or research scientists or engineers. </p>

<p>My question is why you want a socialistic approach to college financing, but don’t want the same when it comes to salaries? Why should the smartest people in our society be facing REDUCED compensation if they choose careers in academia or government service?</p>

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<p>Calmom, do you have data supporting it’s the children of the less wealthy choosing public support jobs? In my youth, at the ivy I attended, it was the wealthy who could consider the jobs at non profits and teaching, those of us with big loans and families we wanted to help headed straight for the highest paying jobs.</p>