Make my Ivy League years in the 1980s seem cheap at $15K a year. But schools like Harvard, Yale, and Princeton have remarkably generous financial aide. The story is that one year a trustee at Princeton realize they had $100 million per student in the endowment, surely they could do more to help students pay.
Under by $10K – who can pay nearly $250,000 for four years? I am thinking this is a bubble and the bubble will burst at some time – sadly the student loan amounts won’t burst along with that!
Remember, this is the “rack rate,” what a student will pay if they don’t receive any financial assistance. The schools try to combine acceptance letters with offering financial assistance (deductions from the rack rate) to entice students they really want to come to go to their school rather than another one. It’s a lot like a car dealership trying to sell you a new car. The reality is that if you have the right special talents or athletic ability, or you are the right gender or gender preference, or the right minority group, you are going to get offers of substantially more assistance to entice you to go to the school so that the school either gets the talent it wants and looks “diverse.” The group that basically loses in this whole scheme is your standard white male from a middle class, middle income family. You don’t see a whole lot of them at your prestigious colleges nowadays. You will find most of them at public institutions or community colleges which are cheaper, since their families cannot afford to pay the rack rate and they don’t qualify for financial assistance–a lot don’t even consider applying to more “prestigious” institutions, because they realize they will not be able to afford it. (This is also one reason, although there are many, why there are more women than men going to college now, since the barriers to entry are higher for men.)
The rack rate works by a combination of the higher income students subsidizing the lower income students (although colleges will be quick to tell you that even full tuition does not cover the actual cost), as well as by use of funds from endowments and alumni support. Colleges higher up the pecking order in terms of selectivity and desirability can be more picky about who they offer financial aid to, but then again, they also get a better yield rate in terms of accepted students attending, plus they probably have greater ability in terms of financial resources to offer financial assistance. Further down the chain, institutions have to get more and more creative to entice students to come. At some, you might have a very high rack rate on paper, but virtually everyone is paying substantially less than that due to a combination of scholarships and grants with fancy names (the “General Beauregard Merit Scholarship for Talented Students,” which are actually being offered to half of the acceptees), work-study, etc. A lot of those are teasers, they apply the first year or two, but then get withdrawn. At that point it is hoped the student is invested enough at the school he or she will stay or qualify for other means of financial aid.
Some at the very top, say some of the Ivies, Stanford, etc., realize that this process might totally price out the middle class from attending, and their students will only be the wealthy or the economically disadvantaged, and no one in between. There, if their endowment wealth permits it, they may start offering a flat financial assistance package to parents of admitted students making under a threshold, say $120K, so that they don’t entirely lose that component of the student body.
Vanderbilt University guarantees that every entering student can graduate debt-free. Normally, families applying for financial aid are given the base amount they will be expected to pay and then told the maximum amount of student loan money they must take out to finance their student’s education before the university will offer them any financial aid to make up the remaining difference in the form of grants or work/study.
Vanderbilt is one of those universities mentioned above that has chosen to use its endowment to cover the maximum student loan amount up front in additional grant money so that no student need go into debt to obtain a Vanderbilt education.
They are to be commended, #9. However, parents who have saved any substantial sums are expected to pay the full ride. This system essentially pushes the “list price” way up and then forces the more provident families to pay more. I can’t tell you how thrilled we were to send both of our girls to UNC-Chapel Hill where in-state tuition meant we could pay one-fourth of what it would cost to get an equivalent degree at Duke or Vanderbilt.
Like hospital bills, there is no good reason for the “list price” for universities to be so high.
Yes, #10, that is our experience. Any savings not in a retirement account are considered fair game… (i.e. three to six months emergency saving account – fair game). And, for FAFSA, one cannot have contributed to a retirement account in the year of application (so no retirement contributions for 4-5 yrs.). I too am thankful that our daughter did not want to go out of state for undergrad. We are strongly committed to “no debt” and thankful she felt the same way (even overheard her lecturing a friend about it !) . The parallel with hospitals is right on.
I guessed $64k.
50K?
Make my Ivy League years in the 1980s seem cheap at $15K a year. But schools like Harvard, Yale, and Princeton have remarkably generous financial aide. The story is that one year a trustee at Princeton realize they had $100 million per student in the endowment, surely they could do more to help students pay.
I hate to say this, but my Freshman year tuition was under $200 at a major SEC University in the 1970’s.
My tuition at the University of western Ontario in 1971 was $585 (Canadian). How we protested when it went up by $100 the following year.
I should know this living in Nashville, TN, but my guess is roughly $125,000.
Under by $10K – who can pay nearly $250,000 for four years? I am thinking this is a bubble and the bubble will burst at some time – sadly the student loan amounts won’t burst along with that!
Remember, this is the “rack rate,” what a student will pay if they don’t receive any financial assistance. The schools try to combine acceptance letters with offering financial assistance (deductions from the rack rate) to entice students they really want to come to go to their school rather than another one. It’s a lot like a car dealership trying to sell you a new car. The reality is that if you have the right special talents or athletic ability, or you are the right gender or gender preference, or the right minority group, you are going to get offers of substantially more assistance to entice you to go to the school so that the school either gets the talent it wants and looks “diverse.” The group that basically loses in this whole scheme is your standard white male from a middle class, middle income family. You don’t see a whole lot of them at your prestigious colleges nowadays. You will find most of them at public institutions or community colleges which are cheaper, since their families cannot afford to pay the rack rate and they don’t qualify for financial assistance–a lot don’t even consider applying to more “prestigious” institutions, because they realize they will not be able to afford it. (This is also one reason, although there are many, why there are more women than men going to college now, since the barriers to entry are higher for men.)
The rack rate works by a combination of the higher income students subsidizing the lower income students (although colleges will be quick to tell you that even full tuition does not cover the actual cost), as well as by use of funds from endowments and alumni support. Colleges higher up the pecking order in terms of selectivity and desirability can be more picky about who they offer financial aid to, but then again, they also get a better yield rate in terms of accepted students attending, plus they probably have greater ability in terms of financial resources to offer financial assistance. Further down the chain, institutions have to get more and more creative to entice students to come. At some, you might have a very high rack rate on paper, but virtually everyone is paying substantially less than that due to a combination of scholarships and grants with fancy names (the “General Beauregard Merit Scholarship for Talented Students,” which are actually being offered to half of the acceptees), work-study, etc. A lot of those are teasers, they apply the first year or two, but then get withdrawn. At that point it is hoped the student is invested enough at the school he or she will stay or qualify for other means of financial aid.
Some at the very top, say some of the Ivies, Stanford, etc., realize that this process might totally price out the middle class from attending, and their students will only be the wealthy or the economically disadvantaged, and no one in between. There, if their endowment wealth permits it, they may start offering a flat financial assistance package to parents of admitted students making under a threshold, say $120K, so that they don’t entirely lose that component of the student body.
Vanderbilt University guarantees that every entering student can graduate debt-free. Normally, families applying for financial aid are given the base amount they will be expected to pay and then told the maximum amount of student loan money they must take out to finance their student’s education before the university will offer them any financial aid to make up the remaining difference in the form of grants or work/study.
Vanderbilt is one of those universities mentioned above that has chosen to use its endowment to cover the maximum student loan amount up front in additional grant money so that no student need go into debt to obtain a Vanderbilt education.
They are to be commended, #9. However, parents who have saved any substantial sums are expected to pay the full ride. This system essentially pushes the “list price” way up and then forces the more provident families to pay more. I can’t tell you how thrilled we were to send both of our girls to UNC-Chapel Hill where in-state tuition meant we could pay one-fourth of what it would cost to get an equivalent degree at Duke or Vanderbilt.
Like hospital bills, there is no good reason for the “list price” for universities to be so high.
Yes, #10, that is our experience. Any savings not in a retirement account are considered fair game… (i.e. three to six months emergency saving account – fair game). And, for FAFSA, one cannot have contributed to a retirement account in the year of application (so no retirement contributions for 4-5 yrs.). I too am thankful that our daughter did not want to go out of state for undergrad. We are strongly committed to “no debt” and thankful she felt the same way (even overheard her lecturing a friend about it !) . The parallel with hospitals is right on.