Inflation for me, but not for thee

So the reason I have been largely absent from ATiM for the last week is because I started the ritual college visits with my oldest daughter, who will be graduating from high school next year.  It has been quite an eye opening experience.  

QB has frequently commented here about the left-wing academic atmosphere that is pervasive on most college campuses.  What struck me during my visits, however, was the degree to which left-wing ideology has taken over the financial aspect of college admissions.  College tuition inflation has been the topic of much discussion in recent years, but after this trip I have come to believe that the levels of inflation are hugely exaggerated, and largely a function of a marketing strategy which masks the socialist reality of college fees.

This is perfectly exemplified by the information I was given at the University of Richmond, in Virginia, although this was by no means atypical. For the current school year, tuition, room and board comes to just over $52,000.  That is quite a daunting number on it’s face.  However, as the university boasts in its info material, 47% of its students qualify for some kind of needs -based financial aid, and that aid (again, as the university itself brags) averages over $38,000 per recipient.  So that means that nearly 50% of students are actually paying on average a mere $14k for what is purported to be a $52k education.  

This, BTW, includes only needs based financial aid.  When students who receive sports or academic merit scholarships are included, a full 70% of students are receiving some form of tuition break, averaging $32,000 in aid per student.  So, to sum up, the average cost to the vast majority of students, 70%, is just $20k, while for a select 30%, the cost is over 150% higher at $52k.

How is the “needs based” aid doled out?  Here is where the leftist ideology gets quite explicit.  At most universities (certainly all of them I visited this past week) the admissions process is proudly proclaimed to be “needs blind”, meaning that ability to pay is not a consideration in the admissions process.  Once accepted, parents of the students are then required to submit tax returns, and, based on these returns, the university itself will decide how much the applicant can afford, and the tuition bill to the student will reflect this cost. So in fact the existence of a headline tuition price tag is a complete and utter fabrication, designed to mask the actual system that is in place. There is no actual tuition price tag.  Tuition is strictly a function of one’s perceived ability to pay it, or, more accurately, one’s parents perceived ability to pay.  It is a system designed so that a select few, in the case of UoR 30%, are used to subsidize/finance the vast majority.  It is a classically leftist utopian system. 

(One thing I will say in defense of Richmond is that at least it still does offer academic merit scholarships.  At Georgetown, I was explicitly told that no such merit scholarships are offered, and only “needs-based” tuition breaks were available.  Only my daughter’s stern look telling me to shut up prevented me from sarcastically inquiring whether their sports scholarships were also offered only on strictly a “need” basis.)

Of course, it is no surprise, then, that the headline price tag for tuition (which so few actually pay) continues to rise into the stratosphere.  Since ability to pay is no longer necessary to gain access to the product, demand naturally will rise and that demand will derive precisely from those least able to pay.  So those who actually are carrying the cost load will necessarily have to pay more and more in order to support this increasing population of non-paying/low-paying demand.  Tuition inflation, it seems, is largely a myth for most people, and exists primarily just for a small group of high income earners.

BTW, this whole model seems to be based on the premise that wealthy parents are ready and willing to pay almost any cost to send their kids to college.  But suppose a parent simply refuses to?  Does an 18 year old with a wealthy but stubborn father have less “right” to financial aid than someone from a low income household?  It’s hard to imagine why that would be the case.  A father can’t force his 18 year old to vote Republican. He can’t prevent his 18 yr old from getting an abortion.  In fact, I am reliably informed that a father cannot even call and get information about his 18 year old from the very university to which he is paying tens of thousands of dollars a year in tuition without his 18 yr old’s consent.  In other words, an 18 year old is, in virtually all relevant ways, considered to be an independent adult capable of making and responsible for his own decisions.  So on what warped reasoning ought an 18 yr old’s cost for a given product be dependent upon his parents’ ability to pay for it?  

The whole system seems ripe for an Atlas Shrugged II, in which high income people begin to refuse to pay for their children’s tuition, thus forcing them to apply based on their own income.  Since that income will be zero, they certainly ought to qualify for even more aid than anyone else.  And the whole despicable system will collapse of it’s own weight.

56 Responses

  1. Ugh. My kids are going to University of Memphis. In-state tuition. Done and done! I also keep bringing up the possibility of community college/technical school but can’t get my wife to go along with me.

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  2. Gee thanks. I have 3 kids – 12,10 and 8 and, because I live in a high cost area (Northern VA) and have a job that pays for the cost of living here, it looks as if I am ‘rich’ (at least compared to many parts of the country) and will likely be one of the ‘select few’ three times over. It might behoove me to retire in 5 years. In any case, I am duly depressed for the long weekend…:-)

    My 12 year old was an expensive baby – had to have special formula (and name brand formula as he did not like Kirkland brand), threw up everything for quite some time, required special this and that. On the day he was born, we commented that he was Harvard bound. Every time we we graduated to a more expensive baby need, we joked “looks like he is heading to a state school’…’looks like he is heading to community college”…”Guess it’s trade school for him”..

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  3. QB has frequently commented here about the left-wing academic atmosphere that is pervasive on most college campuses.

    Why, li’l ol’ me?
    _____________________________________

    The portrait and analysis are absolutely accurate.

    I am in the throes of the same experience with my oldest (who just had a Georgetown interview). He has applied almost exclusively to premium-priced schools, and it is hard not to feel like a fool as a parent for tolerating and even encouraging it. It immediately confronts you as well with thoughts like, well, why exactly did I bother to work extra hard to be able to pay for college?

    It comes as a special insult to someone who started college years late for lack of any financial means to attend, and paid through the nose for law school and indeed just finally paid off those loans several years ago. My situation in laws school was similar to the hypothetical one to which Scott alludes, but it did not work out that way: I was almost 30 years old, married, and had a father who was both penniless and unwilling to submit any tax or other information to prove it. In the infinite wisdom of my law school and university, which had the wealth of kingdoms, I could pay full freight, because I had parents.

    Glenn Reynolds has been writing about the education bubble for some time. I’m not sure how it will work out, but for now I am preparing for the shock of writing a huge check to some lucky school to be named in about two months. When you’ve asked you child work hard for years and aspire to go off to one of those places, it is a hard thing to contemplate saying, “Forget it, too expensive.” And I am still (apparently irrationally) wedded to the idea that it is worth it.

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  4. What do these “marquee” institutions offer that you couldn’t get at, the University of Arizona or a state school in Wyoming?

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    • George, some years ago The Daily Princetonian surveyed its graduates, five years out of school, its applicants, five years out of school, and the college grads generally five years after school and found that Princeton alums and Princeton applicants who went elsewhere were equally successful, and more successful than the general run of grads. Tongue-in-cheek, the paper concluded that to insure success one must merely apply to Princeton.

      The actual facts seem to be that the individual student will achieve in life to his/her level regardless of school ties. And because in any given year 90% of the applicants to Princeton are actually qualified to go there, that pool is as good nine years later as the 11% who were accepted. Ask Mike about MIT.

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      • The actual facts seem to be that the individual student will achieve in life to his/her level regardless of school ties. And because in any given year 90% of the applicants to Princeton are actually qualified to go there, that pool is as good nine years later as the 11% who were accepted. Ask Mike about MIT.

        I would only agree qualifiedly with the first sentence, but almost entirely with the second. These poor kids today are up against a lottery of exceptionally qualified competitors. I think achievement in general, yes, will not ordinarily be thwarted by not being admitted to Princeton (probably went to Dartmouth or Duke anyway), but the path may not be the same. Some would just like the experience of attending the dream school.

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    • What do these “marquee” institutions offer that you couldn’t get at, the University of Arizona or a state school in Wyoming?

      The eternal question. Perhaps little. Perhaps prestige, power networks, access, learning from some world-class teachers and scholars.

      Some people think there is little value to undergrad prestige schools as opposed to grad and professional. On the other hand, look up the admission stats sometime at the top grad and professional schools. They are dominated by a handful of undergrad schools: Harvard, Princeton, Yale, Stanford, Williams, Amherst, and a few others. You can get there from elsewhere. I went from a good but not great small college to admission at all the top law schools and the one top grad program to which I applied. Perhaps that was a good route. But many, many times more are admitted from the top undergrad schools. The rich get richer in greedy, mean America.

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  5. Scott–this is nothing new. I got scholarships (academic and athletic) and worked to pay for college because, while on paper my parents made plenty of money, in actuality they weren’t able to help me out. It has nothing whatsoever to do with a left-wing ideology or socialist reality of college expenses. It just is.

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  6. I’ll just say that the two undergrads from my lab at Penn State who went to grad school ended up at UPenn and UW-Madison, two of the top virology graduate programs in the country. The kid who went to Madison turned down Harvard, which I thought was the right choice for him.

    My experience with grad students at “top” schools (MIT, UChicago) is that at least half are from state schools and less than a quarter from Ivies or Ivy-like schools.

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  7. Mich:

    Scott–this is nothing new.

    Academic and athletic scholarships, along with working to put oneself thru college, is nothing new, certainly. However, I can certainly say with confidence that having 70% of the student body paying on average less than 40% of the advertised tuition rate, or having half the student body paying less than 30%, was not happening back when I was going to school. And I also know from personal experience that the tuition billed was not a function of my parents’ income when I went to school either. So this is all certainly new since I went to school in the ’80s.

    It has nothing whatsoever to do with a left-wing ideology or socialist reality of college expenses. It just is.

    No, it isn’t “just is.” It is the product of conscious choice and development, not something that simply naturally exists. And, sorry, but the notion that a finance system which epitomizes left-wing ideology has developed strictly by coincidence in an industry infamous for its leftward inclinations is a leap of judgement I’m not willing to take.

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  8. I guess my interest is in saddling oneself with debt for a “prestige’s” credential And / or bankrupting of the parents to help out the kids.

    In all honesty, I learned more in the Marines than I did in college. To me, college was a necessary evil that I had to do to increase my wages down the road. Have any of your kids expressed interest in the military prior to college? I’d say the value of that maturing experience would be incalculable for them versus diving right into school.

    Just my two cents. Course, my sister went to college right after high school and ended up with a double major in 4 years and now works for the State Department, so, everyone is different.

    Maybe I should have spent more time on grammer and punctuation.

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    • Maybe I should have spent more time on grammer and punctuation.

      Maybe, and perhaps spelling?

      All kidding aside, every vet I knew in college and law school got more out of the academic experience for having the maturity and discipline of trained adults. If I had not won scholarships in 1960 I would have joined the USN first. That was a much bigger Navy then. I don’t know that those opportunities, which we took for granted then, are widely available now. Do you know?

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  9. A few quick thoughts because I am on my iPad. This ignores the portion of money that comes from gifts or endowments so that 30% of students aren’t subsidizing the 70%. While your point still exists, it isn’t nearly the leftist utopia your overly simplistic explanation portrays.

    It also isn’t clear from these numbers what portion, if any, of this financial aid is in the form of government loans that are then repaid. Lastly, merely $14,000 is still plenty of money to owe on top of the federal student loans and interest.

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  10. ashot:

    This ignores the portion of money that comes from gifts or endowments so that 30% of students aren’t subsidizing the 70%.

    The gifts/endowments are irrelevant. The university needs X amount of money over and above any gifts/endowments that it might have in order to operate the university on an annual basis. It raises that money thru tuition, room and board fees. The university could simply divide X by the number of students it plans on having and charge that as the tuition cost, say Y. But for every student that doesn’t pay Y, other students necessarily have to then pay more than Y in order for the university to collect X, which is needed to operate the school. This is by definition a subsidy of some students by others.

    It also isn’t clear from these numbers what portion, if any, of this financial aid is in the form of government loans that are then repaid.

    That is true. I don’t know how these loans work these days, so perhaps they are granted directly by the university. Although the literature I have says explicitly that “these (financial aid) packages consist largely of grants, which you do not need to repay.”

    Lastly, merely $14,000 is still plenty of money to owe on top of the federal student loans and interest.

    Sure, but it isn’t nearly as much as $52,000, which is what a small, discriminated against minority are charged. And, BTW, $14k is almost exactly what I had to pay over 20 years ago. Hence the title of my post.

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    • Scott, you ignore the power of the earmarked alumni gift. About five years ago, a billionaire oilman in TX, in his 90s, died, having been a geology graduate of UT. He left over $90M to fund scholarships for deserving UT undergrads in petroleum geology, geochemistry, geophysics, and petroleum engineering. He stipulated academics AND need as criteria. I don’t know specifically about G’town, or Richmond, but I’ll bet every university has been granted earmarked funds for need except the legendary Ayn Rand Institute, that does not accept funding from alums with misguided intentions.

      I recently probated the estate of an 83 yo public health nurse, former AF nurse, with an MS in nursing, who left her entire $450K estate to the UT School of Nursing for need based aid to graduate nursing students in public health. This is pretty typical, IMO.

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  11. ashot:

    And one more thing…it is bad enough that a private university might discriminate against a student based on his parents’ income. It is far worse, in my view, that the government does so when passing out taxpayer money in the form of federal loans.

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  12. Scott:

    It raises that money thru tuition, room and board fees. The university could simply divide X by the number of students it plans on having and charge that as the tuition cost, say Y

    You, sir, clearly have never worked for a university. All I can say to this is BWAHAHAHAHAHAHAHAHAHAHA. There is far more to funding a university than tuition, and politics has FAR too much say (especially for publicly-funded ones, like most are). Try being the largest state university in Utah and yet hated by the Legislature as the Great Bastion of Satan.

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  13. More to the point, Scott, there is all kinds of overhead that goes into the cost of providing an education (infrastructure that isn’t funded by room and board). That’s why it isn’t as simple as room/board/tuition. Most universities underwrite the cost of educating undergrads by their grants from NIH (and others) for graduate education. The state taxpayers and individuals (parents/students) are really getting a pass on this one.

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    • I agree with ‘Goose about the pass that state taxpayers are getting. And I am surprised that someone (Scott) whom I would have thought believed in meritocracy finds any issue with the choice to privately subsidize the “ride” for qualified students who cannot afford the bill. Personally, I think every state that subsidizes qualified students at their universities is investing in that state’s future. Austin, Madison, the NC Research Triangle, the Texas Medical Center, Silicon Valley…the economic success stories in America are often fueled by the decision to fund big research universities, whether that decision is from alums or the state. That funding is used, in part, to attract students by their potential, not by their personal wealth, which is irrelevant to their academic merit. When states do it, their burden is to insure an educated and trained group of citizens that will contribute to the success of the region. For example, I am sure yjkt can verify how strong GaTech’s ties are to Atlanta’s development. And, btw, GaTech is usually the public u. in America with the highest SAT scores, not Berkeley. GaTech “gives” big bucks to really highly qualified students who need it, but it is a relative bargain for a rich kid, too.

      There are, I am sure, colleges selling degrees for the price the market will bear. They are in a different business than state universities and research institutions, generally. There are different models at work here. The heavily local tax subsidized community colleges, with no research pretensions, and often with no pretensions of any kind, are nearly tuition free to rich as well as poor. Compare them with the for profit non-research colleges that have arisen and the CCs look great to the localities they serve. As I say, these are different models serving different purposes.

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  14. Mich:

    You, sir, clearly have never worked for a university.

    You, ma’am, clearly aren’t grasping the point (again?). It doesn’t matter what other funding sources a university might have. Tuition is one way in which it raises money, and it is set at a level so as to produce the needed funds over and above funds obtained from other sources. It is also set as a function of the number of students expected to pay it. The fewer the students who are required to pay it, the more will have to be paid by those students who are required to pay it. This is a simple matter of basic math.

    All I can say to this is BWAHAHAHAHAHAHAHAHAHAHA.

    I’m not sure I understand which part you find laughable, that universities raise money through tuition fees (an obvious truism) or that a university could charge each student an equal amount of tuition (an obvious possibility). In either event, however, I find your response bizarre in the extreme. I find it equally bizarre that one would expect the funding process of a government-funded institution to not be highly political. As a government funded institution, it’s funding process is political by definition, for goodness sake.

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  15. What they don’t tell you about this ‘need’ based financial assistance is that much of it is in the form of either loans or work-study grants. If you are borrowing or work for it, it isn’t really ‘giving’ it to you so those generous numbers are a little suspect.

    There is also the huge price difference. State schools are fixed price and cheaper but tend to be stingier with aid. All private schools more or less notch their list price to the presitge schools but give more discounts in the form of scholarships to keep enrollment up. Net they still usually cost more, but your mileage may vary.

    I just sent my son to four years of an out-of-state public school at full retail and took out tons of loans to do so, so I guess I’m a sucker. But I have one kid and figure that he deserves at least what my parents gave me. After all, I’ve turned out all right so far.

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  16. Scott, it seems only right that the schools would lower the cost for those who are most needy and charge more to those who can most afford it. They are, after all, the last bastions of Marxism.

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  17. Mark:

    And I am surprised that someone (Scott) whom I would have thought believed in meritocracy finds any issue with the choice to privately subsidize the “ride” for qualified students who cannot afford the bill.

    A few points. First, let’s narrow the discussion to private universities, which is what I have been talking about. Discussions about the financing methods of a state university is an entirely different discussion.

    Second, we should be clear that almost no student can afford the bill. That is why universities want to look at the income of parents when determining financial aid, not the student’s income. If they were determining tuition based on the student’s ability to pay, tuition would be very close to zero for almost all students

    Third, a true meritocracy would not depend on a parent’s ability/willingness to foot any bill, even one specifically designed to be within their reach. Indeed, one of the most surprising things to me was Georgetown’s proud declaration that it absolutely does not award merit scholarships, as if this was something to be boastful about. It’s financial aid is awarded strictly on a “needs” basis.

    If student X and Y are deemed to be academically identical in all ways, and X is admitted to the university on the condition that his parents pay $50k per year, while Y is admitted on the condition that his parents pay $15k per year, that is no meritocracy. That is classic collectivism.

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  18. McWing:

    They are, after all, the last bastions of Marxism.

    Indeed.

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  19. If this discussion is limited to private institutions, is this not the free market at work? You/your children have the choice not to attend/pay to these “last bastions of Marxism.”

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  20. “The whole system seems ripe for an Atlas Shrugged II, in which high income people begin to refuse to pay for their children’s tuition, thus forcing them to apply based on their own income. Since that income will be zero, they certainly ought to qualify for even more aid than anyone else. And the whole despicable system will collapse of it’s own weight.”

    Sounds like it would be relatively easy to game if you simply gifted the child the appropriate amount of tuition during their high school years (to avoid the gift tax) and then had them apply on their own.

    Have you considered this approach?

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  21. Mark:

    Scott, you ignore the power of the earmarked alumni gift.

    Well, one would expect such gifts/grants, if they were truly targetted, to benefit a relatively small percentage of overall students. But when 70% of students are receiving a benefit, the overall effect is can hardly be labelled “earmarked” benefits, even if many of them individually are earmarked for specific programs.

    It is clear from the description of the aid programs that such earmarked aid does not really inhibit the ability of the university to dole out aid as and to whomever it sees fit. The aid programs are typically described as applying to “demonstrated need”, and such need is determined based solely on parents income statements. There were no stipulations, for example, that it depended upon one’s direction of study, at least at the schools I visited. So even if earmarked gifts did make up a substantial portion of the funds available, it must be the case that they are diversified enough across the school’s activities that something is available to pretty much anyone, except those few deemed by the university to not “need” it.

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  22. okie:

    You/your children have the choice not to attend/pay to these “last bastions of Marxism.”

    Quite right. Hence my reference to Atlas Shrugged II.

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  23. Okie, for G’town I am going to guess the pride is not Marxist, but Jesuit. St. Ignatius stood for educating the poor, as I recall.

    Our greatest private schools were endowed by donors who set the tone for the school. Sometimes churches were involved. Many of the founding documents express a goal of reaching out to the academically qualified but financially impaired. I believe Penn [Ben Franklin’s baby] does. Rice does. I don’t know about Stanford.

    The Big Three Ivies were all once denominational schools, so they may have charter issues about aiding the poor too. I am guessing that men and women who became wealthy but were from modest means also give earmarked gifts to the great private schools they attended.

    Scott, you can get even by giving massive sums to the university of your choice for academic scholarships based entirely on merit but not at all on need.

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  24. mark, “last bastions of Marxism” are Troll’s words,and Scott’s by agreement, not mine.

    I remain incredibly busy with work and have to go to work right now, but you have made several comments recently on a number of subjects which I found intriguing and would like to follow up when I have time to stick around. Have to admit that I’m a bit surprised at how often I agree with you (I think). Paraphrasing, you made a comment on PL questioning whether OK’s new personhood law would confer “birthright citizenship” on all children conceived in OK. What is meant by “birthright citizenship”?

    Later, all.

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    • okie,

      In case Mark has stepped out, “birthright citizenship” is the ideathat under the 14th Am every person born in the United States is a citizen–by birthright.

      Many people believe this is what the 14th explicitly says, but it actually contains a qualifying clause: “and subject to the jurisdiction thereof.”

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  25. Mark:

    Scott, you can get even by giving massive sums to the university of your choice for academic scholarships based entirely on merit but not at all on need.

    If I had massive sums, I would do precisely that. Alas, having to pay for 3 kids to go through university, along with subsidizing others, is going to leave me with significantly less than massive sums.

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  26. My oldest daughter, who was graduated from HS in 1991, was a National Merit Scholar. She made two rounds of college visits, beside the mandatory visit to UT so that she could have a basis for comparison. Staying with my cousins in DC on one round, she visited G’town, American, U MD, and W&M. She was most impressed with G’town. She took a west coast swing with me. She was most impressed with UCSD. She ended up on a five year full ride [t, r&b, bks, +stipend] at OU in Norman which included a year in Graz, Austria. She did not regret it.

    My middle daughter, editor of her HS yearbook, after the mandatory UT visitation, took her visitation trip with me to the [SF]Bay area. UC-B, Stanford, SF Art Institute, Mills, UC-SC, and Santa Clara. She was accepted at UC-SC, the school of choice for her on that trip, but went to UT. She did not regret it.

    My youngest daughter, the chemist now in pharm school, wanted either chemE or bioE. I went with her to Hopkins, Princeton, Penn, and GWU. She liked Penn. Then she took separate trips to GaTech and UCLA. She had spent a week at UC-B in HS and knew UT. She decided on UCLA, and took a NROTC scholarship to UCLA in chemE. She had a 3.45 in chem E and was a squad leader in NROTC. Then came the morning she had to watch over her squad on the ropes from 6:15 am ’til 11 am
    b/c some of them were not getting up the ropes, and she was late for her 11 am physics exam, thus making only a “B” on the exam, and getting called to task b/c one of her squad members never did pass on the ropes. At the end of her freshman year, she transferred back to UT in chem, but she never regretted any of it, including NROTC. She actually attended classes on her trips – chem or math classes – at Berkeley, UCLA, and GaTech. Penn intrigued her b/c the school PROMISED 24/7 help or tutoring in any subject! She found the utility of the tutorial function at UCLA a shade better and more accessible than at UT.

    The older two looked hard at the fields they liked, talked to students in their fields when they visited, but never attended any classes. I think our youngest really went the distance.

    My son, the oldest of the 4, finished an associate’s degree in CS at Austin Community College in his late 20s, and makes six figures at Dell and is happily married. He wishes that he had not been a drunk as a teenager and that he had earned a four year degree, but life has been good to him since sobriety.

    My son cost the least, and my middle daughter the most. All their outcomes have been good.

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  27. I’m curious as to why Georgetown would be a draw if there is no merit based type of financing/assistance. Wouldn’t you want yourself/kid to be in as challenging atmosphere as possible, with exposure to smart people drawn to the institution because they honor achievement, not purposefully shun it?

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  28. I guess what I’m surprised at, Scott, is that you think that tuition/room and board/student fees pay for what your daughter is going to get at university. Those fees don’t even begin to cover it, but they’re also not the only revenue stream that a university has. If your argument is that tuition/R&B/fees is false advertising, then I’ll back you up 100%, but if your argument is that you should pay for what you get then none of us would be able to afford college. Maybe Bill Gate’s kids could, but none of ours.

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  29. Schools like Georgetwon and the Ivies don’t give merit scholarships because they don’t have to. The best and brightest will insist on going there regardless of cost. Most Ivies could fill their freshman class ten times without lowering standards.Among genuinely qualified students, actually getting accepted is literally a crap shoot.

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  30. actually getting accepted is literally a crap shoot.

    I don’t think getting accepted is the crap shoot (I was accepted at every school I applied to for undergrad, and 4/5 that I applied to for grad/medical school); it’s whether or not you can afford to go there. They’ll all give you financial aid, and you can always find student loans, but it’s the paying off what you owe when you graduate that’s the killer. I was accepted to Harvard twice, but I’d probably still be paying off the loans if I’d gone there. As a NMS and a jock they loved the concept of having me there, but they wouldn’t give me a scholarship for either reason. Why in the world would I have gone there?

    But it still comes down to this: what students pay doesn’t even begin to cover the total cost of their education. The whole system–at least in the US–has become underwritten by research money. I can’t remember the percentage off the top of my head (Mike probably knows), but something like 35% of every research grant is automatically allocated for infrastructure (maintenance, heating/cooling, etc.) by the university. That is also what covers hidden undergraduate education costs. That whiteboard in your daughter’s chemistry class? Bought and paid for by somebody else’s research grant. There isn’t a state in the nation that pays what it owes to its universities to educate its citizens.

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    • Have to agree with yello on the admissions crap shoot. The 10x figure is pretty accurate. A student with top scores, grades, the whole nine yards will be in competition with 10-20 other similarly qualified students for every slot at the “top” schools.

      But affordability is certainly the other big issue. The Ivies and some others don’t give sports scholarships (gets you in but doesn’t pay the bill). Still, there are suckers like me who start reaching for the check book. This week I watched a renowned expert in the biochemistry of cancer testify in court. Degrees from Yale, Harvard, MIT, runs a lab at an Ivy. Tens of millions in research grants. Absolutely brilliant guy. I thought, wow, sure worked out for him. Of course, it isn’t a very logical way to think about it, but still ….

      But it still comes down to this: what students pay doesn’t even begin to cover the total cost of their education.

      I’m sure this is true in a sense, but I’m not sure it is a very meaningful statement. Let’s take those Ivies: hundreds of years old, buildings and facilities built over generations, endowments in the billions, etc. They are small, elaborate cities and communities of learning. I don’t even know how you would really measure the “cost” of four years there.

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  31. The gifts/endowments are irrelevant.

    They aren’t irrelevant. They don’t make your point moot, as I said, but I think it makes your argument about socialism less compelling.

    The university could simply divide X by the number of students it plans on having and charge that as the tuition cost, say Y.

    Agreed. I’m not saying there is no subsidizing going on. I thought I made it clear that my point is that it simply isn’t quite the ratio you made it out to be.

    Although the literature I have says explicitly that “these (financial aid) packages consist largely of grants, which you do not need to repay.”

    Weird, imagine a university leading people to believe their education would be cheaper than they thought. It’s almost like they’re trying to sell something.

    And, BTW, $14k is almost exactly what I had to pay over 20 years ago. Hence the title of my post.

    And you just admitted you don’t know how much these students end up owing in loans.

    Student loan debt has increased pretty quickly over the last couple decade. It’s not clear from those numbers if the increase in student debt is from students who get no financial aid or some financial aid but they do seem to demonstrate that some of the burden of increasing tuition prices is being born by someone other than wealthy parents.

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  32. qb: endowments in the billions

    And every one of those endowments is very, very specific about how the money is spent. Here at the UU we have the Benning endowment (as an example) and it funds the salary and research of several professors in different departments. But funds the salary and research of those professors. Nobody ever endows infrastructure (I’m with Rachel Maddow on this–infrastructure is a pet project of mine). Custodial service, heating, cooling, water, pest control, parking lots, repaving roads. . . all of those things have to be paid for. And the Ivies?? I can’t even imagine the retro-fitting that has to go on in their buildings.

    You can’t calculate the costs, and that’s why universities come up with “blue sky” tuition figures and then back-pedal to get financial aid for students. I keep saying the same thing over and over again–we don’t pay what it costs to educate our citizens.

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    • I keep saying the same thing over and over again–we don’t pay what it costs to educate our citizens.

      Someone is paying it.

      Some of it might have been “paid” generations ago when they built Burns Hall and Smithers House.

      As a student, it’s likely thought that I would never use Burns or Smithers in four years at a large U. So are they part of my education? Is the modern art museum or the biology library I wouldn’t use?

      We might be saying the same thing in a way–that the fees charge are blue sky. But I’m not so sure that a student’s “education” costs way more than the student pays.

      Like

  33. Michi:

    I can’t remember the percentage off the top of my head (Mike probably knows)

    The number varies from school to school. For Penn State, USF, UGA, UMD, the overhead cost is ~33% of the total grant. For Harvard, MIT, Yale, the number is ~50%. I think that covers the range of percentages from low to high.

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    • It is a bit difficult to distill UT’s budget here: it is 1400 pp. long. Income: $2.3+B.

      Tuition and fees: 567m
      state revenue: 297m
      self supporting: 373m [Housing and Food Service, Continuing Education, Parking and Transportation, McDonald Observatory, the Lady Bird Johnson Wildflower Center, the Frank Erwin Center, men’s fb, mens bb, etc.]
      University Fund: 277m [I think this is earmarked for physical plant, only – it is essentially Austin’s share of the revenue from the $15B Permanent Fund, established from oil lands around 1880]
      IP and similar: 77m
      Grants, contracts, and
      gifts: 693m

      I tried to get a handle on the fed money in that $693m. I did not find it as a line item, but every dollar spent from private gifting, which is like a secondary endowment to the permanent fund, is listed, so I’m sure it’s in there. Engineering had $29m of special gift income, Natural Sci had $25m, separately geosci had $22m. Nursing had $1m, of which $4.4k came from the earmarked gift from my late client. A summary page says $312m in fed contracts and grants, $80m in private contracts and grants, $20m in state contracts and grants.

      Like Penn St., UT Austin should be considered “state assisted”, I guess, when we look at these numbers.

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  34. Scott, just because I’m feeling ornery at the moment: I recall when I was in graduate school in the mid-70’s (granted, at a state university) being absolutely outraged when my tuition was increased from $16 to $20/credit hour. How dare they increase my tuition by 25%!!! (I might be a bit off in my recollection of the exact charge per ch, but not far.) I may not agree with you that the cost of higher education today is a leftist commie plot, but overall I am stunned every time I see current tuition/fees costs. I see it as a real and systemic problem.

    On indirects charged to grants, my institution is in the ballpark. Our negotiated fed rate is just under 40% for on-site research. Of course, in my area, when working with younger/newer researchers, there are lots of smaller foundation research grants that pay 0% or maybe up to 10%. It’s a huge reason the big fed grants are so sought after.

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  35. Mich:

    I guess what I’m surprised at, Scott, is that you think that tuition/room and board/student fees pay for what your daughter is going to get at university.

    I don’t know if they will pay for what she is going to get, but $50k per year ought to be more than enough to pay for what I want to purchase, ie an education, a room to sleep in, and 2-3 squares per day.

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  36. A quite entertaining rant. I mentally stripped it of blaming it on the leftists as the link was assumed, but not argued. Presumably, state supported universities shouldn’t exist as taxpayers’ money should not be used to subsidize tuition costs. That scourge of society, the GI Bill, must have been some kind of leftist plot.

    Personally, financial aid was important. I received a decent amount of aid to attend Macalester College. The aid package was slightly better than that offered by the University of Chicago (though I think my parents’ aversion to their son living on the south side of Chicago was more important). The family finances deteriorated dramatically during sophomore year. I suppose the alternative to that leftist plot would have been for me to drop out of college and save up or move to a community college. My actual response was to test for Air Force ROTC, though this didn’t prove necessary in the end. So, I was able to finish my studies with a BA in Physics and Mathematics with about $5,000 in student loans ($2500/year was the max back then).

    Unless my family’s finances deteriorate, I assume we’ll be paying full board (in stereo) once my pair make it to that level. I’m well aware of what’s coming and will be making provision for it. [Plan to save about half the amount in advance and have my mortgage paid off by then so the remainder can be born from current cash flow.]

    Although undergraduate aid is need based, that’s not true of graduate programs. My aid for graduate school was entirely performance based. I qualified for a graduate assistantship based on my college records and GRE scores. I managed to make it through graduate school without taking out additional borrowings. My wife’s college experience was mostly paid through aid, but her graduate program in interpretation and translation was entirely on her shoulders. We’re hoping to pay off her student loans by the end of this year (and they were considerable, easily topping $60k).

    I would voice one additional objection. I’ve ten years as a student (6 of which taking classes) and 9 years teaching at university level (3 as a grad student, 2+ as a post-doc, and 4- as a lecturer). It is poppycock* to claim that achievement is not honored. Academically, I am a high achiever and have received much encouragement. I tried pay that forward once I was on the other side of the lectern. I can’t say as I ever had much time for a student who was trying to grub for a grade. Those who were working hard to learn, on the other hand, would get extra effort from me as well. The aid package they may have received mattered not a whit in my marking nor of any other professor whom I have known. Then again, I’m a physicist. Maxwell’s Laws, the Schrödinger Equation, and Special Relatively are notably unaware of the student’s finances. The same can be largely said of those who teach them.

    Well, I’m off for a curry. Then to work on a new manuscript.

    BB

    *Staying in Scotland for a week is getting to me. I’ll try to throw together a Notes from a Small Island post tonight.

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  37. I imagine I’ll be talking to myself by this point in the discussion, but when I was filling out the financial aid forms for my kids for their colleges and teaching for an almost non-existent salary at another college, it always occurred to me that, along with teaching my students, I was also subsidizing their education. It never occurred to me that was Marxist, Scott.

    –Hi, ABC! You’re almost never talking to yourself on this blog, I’ve found, there always seems to be at least one of us that won’t let the subject die. . . 🙂 Michigoose

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  38. what I want to purchase, ie an education, a room to sleep in, and 2-3 squares per day

    An education: not only do you have to pay for professors’ salaries, but there is maintenance involved in repairing the seats in the classrooms, custodial services to keep them clean, heating/cooling, lighting, someone to replace burned out light bulbs, the chalk or whiteboard pens. . .

    A room to sleep in: again, the heating/cooling, lighting, maintenance, painting at the end of every school year, water for showers, cleaning of linens, mattresses and pillows, new locks on every door at the end of the school year, night and weekend security people. . .

    2-3 squares per day: dish washing, replacing broken glasses and bent cutlery, someone to cook the food, someone to serve the food, someone to clean the tables after everyone has spilled food all over them, the electricity for the drink machines. . .

    Higher education and its associated costs are not a Leftie plot, Scott, no matter how much you want to think they are. Hell, send her someplace like Liberty University if you want to avoid spending any money furthering the Marxist plan to overrun America! If you’re complaining about costs at a public university, then blame the associated state legislature, which has woefully underfunded public universities since the 1960s. If you’re complaining about costs at a private university, then you’ll have to take it up with the governing board of the university, which goes after donors to fund buildings, salaries and scholarships, but not infrastructure. But don’t blame this on liberals or liberal politics.

    /end rant (for now) 🙂

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  39. But blaming everything wrong with society on liberals (conservatives) is so much fun for a conservative (liberal), Goose. Funny how this system, having endured for at least 30 years since I started college, is about to collapse of its own weight.

    BB

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  40. My advice to parents has always been if you start thinking about this when your kid is in high school, it’s too late. And complaining about how the system is set up gets you nowhere. Deal with it.

    Aside from the apparent need to start saving for your kid’s edjakation before s/he’s conceived, you also have to learn about all the non-college based money out there and how your kid might qualify for some of it. Start this process when your kid is in 7th-8th grade, as it may be necessary to develop relationships with the sponsors of these programs.

    A lot of money is available, but it won’t come knocking at your door. The research can be well worth the effort. Back in the 1970s I cut my grad school bills in half this way, and my nieces were each able to find $3K-$5K per academic year.

    FYI: Unless you’re from there, Wyoming is too much of a jolt culturally and socially to attend college there. A family friend’s son got a great scholarship there and found it so unlike anything he’d experienced that he transferred after one year.

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    • No disputing any of that advice, okie.

      I have nieces raised in Wyoming, btw. They love it and decided to stay there for edumacation, although their parents are transplants.

      Yes, quite different culturally even from the rest of a midwestern family’s background.

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  41. I have to agree with you about Wyoming, MsJS: I work with a woman who was born and raised there, but has lived in SLC for about 40 years now. Whenever she goes back “home” to visit family she says the same thing when she gets back: “How did I live there? And why does anybody??”

    It’s absolutely beautiful country, but definitely a world unto itself, even for those of us who live right next door.

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  42. FB:

    Those who were working hard to learn, on the other hand, would get extra effort from me as well. The aid package they may have received mattered not a whit in my marking nor of any other professor whom I have known.

    Hey, I resemble that remark! Oh, right, you already know me ….

    A quick perusal of USF’s operating budget from 2010-2011 shows that ~25% of the budget comes from grants and contracts, ~22% from state appropriations, and ~12% from tuition and fees.

    We’ll be getting somewhere between a 9% and 58% cut in our state appropriations based on the FL House vs FL Senate appropriations bills.

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  43. An interesting opportunity arose on this trip. Golfers might a bit jealous of me. A good friend of mine is a professor (the UK system is a bit different; professor is the top of the heap) at St. Andrews. There’s a chance I might be able to due a sabbatical at St. Andrews.

    BB

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  44. FB

    My younger brother did some research at St. Andrews and could have spent another few months there after he finished studying in Glasgow. He had really good things to say about th town and school.

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  45. St. Andrews was beautiful. I’m shocked at all the nice weather we’ve had in Scotland during my visit. It was clear blue skies on the train back down to Edinburgh and a nice, if windy, afternoon in Stirling.

    Where did your brother go in Glasgow? I’m visiting a professor of Chemistry at Strathclyde.

    BB

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