There is nuance, but leverage is still a big deal. Say there’s a family that doesn’t qualify for need-based aid that has a budget of $15k and a student who’s interested in finance. They’re looking at three options:
CUNY Baruch $7500 + commuting fees
Fordham: Full tuition scholarship leaving $23k for room & board
Columbia: $87k full freight
All three schools are fine institutions. CUNY Baruch is the only one that is going to be within budget. Fordham would require loans, but would be within reach with a federal loan and some student work. Columbia would require big huge loans cosigned by the family.
My sense is that people are saying that, hey, taking out some modest loans in order to have a residential college experience is worth having some loans ($30k ish total). But taking out massive loans ($280k ish total) for an Ivy League education when there are other quality options is foolhardy. It’s a different conversation than if the family had $350k in the bank and was ready and willing to spend it on any of the three institutions than if they’re needing to use significant leverage to make the options happen.
So obviously every case is different, but I think a lot of times people take out big college debt and eventually pay it off and things work out OK, but they don’t really know how things would have worked out if they had followed a less expensive path. And that kind of debt specifically can close off opportunities they might have had, but could not pursue because of the imperative to make their student loan payments.
In any event, I was referring to what we were calling luxury spending on college. The way you described the situations you have in mind suggests maybe you are thinking of something different.
It’s always interesting watching the discussions here and then thinking about the many Americans that don’t have the same lifestyle and have to make choices based on many times different priorities.
ROI is probably much more important for a first generation college student and their family. Also probably much more important for someone coming from a lower income family. Many students and their families don’t have the luxury of spending four years, or more, enriching their minds without having a real occupational and financial payback waiting for them.
I’d say the majority of students attending college now are doing so with that goal of getting an education that leads them to a decent career. Sure, that might be a career that doesn’t pay as well as say engineering or Cas, but it’s most likely a career that pays more than Walmart or a warehouse job or a daycare employee, etc. Many American families aren’t as (insert whatever word is appropriate regarding privileged) as those mainly represented here.
I suppose if my parents had been well off and could have afforded to send me to a private college where costs were no object that perhaps ROI would be less about career and financial outcomes and more about the experience and great enrichment. The reality for most families is those things are a true luxury. There needs to be a true ROI for most students, otherwise they are potentially digging a hole of debt or missing years of working that could put them in a better financial position. For many Americans, college needs to have a positive financial payoff.
I personally want to college, community college, to better my lot in life. To receive an education that I could immediately transition into a career with a higher salary and a better quality of life. It worked great. I have since given my children the assistance, mentoring and resources to put them on a path to college. I view their education as extremely important. I also view the ROI as important as they will need to support themselves afterwards.
I guess my point is, ROI can look very different depending upon your families position in life, your starting point and where you might “need” to end up. For the haves, it is possibly more about the overall enrichment. For the rest it’s probably.much more about the career or financial outcome and the overall enrichment experience is merely icing on the cake.
Public also doesn’t necessarily mean inferior to private. Nor does less cost mean inferior education. There are some very heavy hitting publics with all the bells and whistles of their private counterparts. And some very expensive privates with sub optimal facilities. COA is not a proxy for quality of academics.
I’d go so far as to suggest that with regard to conversations of ROI or value for employers or job outcomes, the S in STEM should be taken out. While the jobs for chemistry, physics etc may pay higher when compared with biology, there is no huge rush to these fields as there is for engineering because the ROI isn’t great. They also often require PhD level work to actually find a career in the field and even then there is little guarantee as many still can’t find a job with even postdoctoral work. The benefit for the physical sciences is that students in these fields will develop quantitative skills that certain jobs value. However, there does not seem to be much demand for these fields as witnessed by this article mentioning a physics program being cut.
Two of North Carolina’s public universities got the green light last month to eliminate more than a dozen degree programs ranging from ancient Mediterranean studies to [physics](https://apnews.com/article/I updated this and added a hyperlink to the story we had when the cuts were finalized.).
One can’t compare raw salary figures from different schools due to the cost of living difference. It is likely that many from Santa Clara will end up in California where salaries tend to be higher but are often comparable or may even be lower when adjusted for cost of living than salaries in other parts of the country. For instance, a 100k salary in San Jose would be comparable to a 67k salary in Miami.
I completely agree with you that some families are not in a financial position to pay a lot more for optimizing the quality of the four-year experience, and that is fine.
I’d only add a couple nuances.
One is that I think sometimes people just looking at overall ROI statistics do not quite understand exactly what paths some of these full pay families are thinking about. Like, they are fine paying a lot for their kid’s humanities or social science degree, isn’t that wasteful? But they may be thinking that kid is probably going to go into law or business or so on, in which case maybe not so much. Meaning in cases like that, the general ROI statistics don’t really apply to them.
The other is I think sometimes people do not realize they may have options to at least get closer to their optimal four-year experience while still maintaining affordability. This community is actually really good about that, if you give them a budget, your qualifications, and your preferences for college, they will potentially come up with some plausible options you would otherwise never have thought to explore.
But in the end I don’t mean to suggest there is anything wrong with following a simple in-state public college path, including a path that starts at community college, that will get you the education and degree you want at a very low cost. I just think sometimes there might be competitive options for educational and career paths that are not always obvious.
Indeed and I do think this is part of the conversation not being discussed. There are colleges that are closing down - both public and private - where perhaps their closure could be at least partly attributed to their perceived ROI. In fact, I believe there are studies which show that publics or at least state flagships tend to produce better ROI’s than private universities as a whole.
So in the studies I have seen, non-profit colleges come out way ahead of for-profit colleges when looking at them as a class. Then among non-profit colleges, one critical issue is whether or not you actually graduate. This is not necessarily the fault of the college, but at colleges where a lot of students end up not graduating, if you include those non-graduating students in the statistical analysis, it tends to crush their ROI statistics.
OK, then assuming you are talking about a non-profit college and you actually graduate, at that point average cost of attendance is going to tend to dominate average ROI within at least wide ranges of colleges. And that of course favors most publics as they tend to have a lower average cost of attendance.
Of course the problem with all this is YMMV. Like if your personal cost of attendance would be way lower or way higher than the average at some specific college, then those statistics don’t really mean anything to you.
All good points in your post. The only thing I’d add is that for low income families, the I in ROI can be exceedingly low. Princeton can simultaneously be one of the most affordable paths to an education and one of the worst deals going.
Yes good points as some privates would cost less for some students than their state flagship would.
I do think cost is increasingly becoming a factor for many families. College costs have been exorbitant for years but they are now stratospheric. I also think it’s becoming increasingly difficult to justify these costs given recent job outcomes. In the not too distant past, having a college degree would basically guarantee a decent paying job so there was little need to worry about what to study but now there are full-time baristas with college degrees. Many used to claim that the key to success was having a college degree without acknowledging a basic truth - if everyone has a college degree then that becomes the minimum standard of entry for the job market or basically the new high school degree equivalent. This seems to be the crux of the issue and why you see students gravitate towards fields that are pre-professional as those have a foothold into certain careers that other degree types do not or why you see such interest in certain institutions as students hope the name brand of a degree may help distinguish them from the hordes of others with similar qualifications.
Education is a worthy goal of its own but it’s also far more expensive than it was in the past and its value seems to also be diminishing, especially as there are lower cost alternative ways to pursue education. I think many colleges will be getting a rude wake up call as their costs are becoming increasingly hard to justify. I expect this will be true for many privates, as many seem to have the same sticker price that elite colleges do. At these prices, the distinguishing factors such as name brand and/or field of study will only increase in importance.
I think what a lot of families have trouble dealing with around the issue of return on investment is uncertainty—uncertainty about the exact career a major will lead to, how long it will take a student to find a place in the world, etc.
Engineering degrees, it is thought, remove that uncertainty. You have an input—cost of college—and an output—a particular job with an income that’s relatively easy to predict.
If you’re an English or Philosophy or History major, that certainty goes away. You might end up a high-school teacher. You might be a lawyer, or get a job at McKinsey. You might produce online content, or write TV shows. You might work in HR at a midsize company in a smallish midwestern city.
Humanities degrees can lead to financially spectacular outcomes. Depends on the person. But you just can’t say “I’m going to be an English” if you’re an English major, the same way you can say “I’m going to be an Engineer” if you’re an Engineering major.
The vast majority of jobs, from extremely well-paying to barista, don’t require abstruse mathematical knowledge. The vast majority of very good jobs do require excellent language skills, logic, argumentation, the ability to interpret and respond to complex language.
An aside: the scenario sketched above, where a family doesn’t qualify for financial aid at Columbia (or similar) and ends up with $300,000+ debt, is hard for me to get my brain around. Columbia and similar places are no-loan and need met. Yeah, maybe there are some strange circumstances under which you’re a very high-income family that has absolutely no money, and get no need-based aid. But again: hard to imagine.
Typically you’d have to have a relatively high income, not a lot of assets or a lot of pre-existing borrowing against those assets, and non-college expenses consuming nearly all (or maybe more than all) of your income.
To me this just underscores that usually what is happening here is this high income family is choosing some other “luxuries” over an expensive education. Which is fine, that is up to the family, but at a certain point I think it is imprudent not to recognize that even if you have a high income, you cannot necessarily buy EVERY luxury you might want, you have to prioritize.
Although you might find it surprising, I can recall multiple instances of people on the chance me/match me threads who have indicated that they won’t qualify for need-based aid (or sufficient need-based aid) but have very limited budgets. No matter the reason (they only recently started making lots of money, they have significant healthcare bills, they spent money on other luxuries, they have lots of alimony and legal bills to pay, they only recently finished off paying their own educational loans and still need to save for retirement, etc), these people exist.
I don’t consider us high income, but I guess high enough not to get much FA (our kids went mostly to public schools). Until around the time our oldest started college, my husband’s company had a long wage freeze for employees making more than $100,000, and he wasn’t making much more than that. We had nothing left over with 5 kids in a very high COL area to save much of anything. No vacations, no eating out, 20 year old vehicles. His current position involves a larger yearly bonus, not guaranteed. He’s planning on retiring in about 8 years, fingers crossed he makes it through the annual purging of employees. We also had some rough medical years, just bad luck. So there are those of us not getting FA and not living large - at all. My higher stats kids did get grief from others due to college choices, but they understood.
Probably a common type of this circumstance is divorced parents who are still fighting their divorce (giving their kid’s college savings to their lawyers’ kids’ college savings) and uncooperative about paying for their kid’s college or even doing financial aid paperwork.
I think part of what George was pointing out is that at least these days, a household with just over $100,000 in income is going to get a large need aid award from colleges like Columbia absent a lot of assessable assets.
You’d have to run the full NPC to know exactly, but the NCES College Navigator reports average net prices by some income ranges, and in 2022-23, $75,001-$110,000 range, Columbia’s average net price was $15,368. Yale provides a handy chart on their website, and in 2022-23, $100,000-$150,000 range, 97% qualified for aid, median scholarship was $65,800, and median net cost was $14,800.
In fact even in the $200,000-$250,000 range, 83% qualified for aid, the median scholarship was $40,300, and the median net cost was $49,400. That is obviously a lot of money, but the point is to actually get to full pay at these colleges, you either need a significantly higher income even than that, or a lot of assessable assets.
Yes, I have encountered many scenarios online, and a few in real life, where the parents (comprehensively defined in the way these colleges do) realistically do have the financial means to pay, but either one or both parents are unwilling to pay what the college is de facto requiring.
And I am definitely not going to say the parents are always “wrong” in those scenarios, although there have been cases where I would not be supportive of exactly why the parents took that position.
There are many luxury items people are unwilling to pay for. You likely would not say that a person who is not willing to pay for a BMW is in the wrong for choosing to buy a cheaper vehicle. There are some who do not consider any school worth the price tag that these schools now charge. There are also some who will see it worthwhile perhaps to pay that cost for some schools but not for others. It’s akin to buying a car where perhaps some will lay out those funds for a BMW but not those same funds for a Hyundai. One key difference is that in the car industry sticker prices differ, often correlating with perceived value which is sometimes not the case when it comes to college costs. I expect part of the drop in college enrollment since 2011 has been due to the price seeming to be out of step with the perceived value and as tuition costs continue to soar while perceived value continues to decline, the drop in enrollment issue will only continue to grow. It doesn’t matter what someone can pay if someone won’t because the person doesn’t feel the goods are worth the price.
In 2014, we put a hard cap at $200K. There wasn’t any evidence that spending more would guarantee a better outcome for his major, mechanical engineering.