As schools near $100K/year when will that affect the pool of students?

[Anonymous]

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Anonymous wrote:The average student loan debt at Pitt in 2019 was $40,000, so it’s not just privates with these issues.

Pitt is 20k in state COA, 35k out of state. 40k seems about right for that level of tuition.

COA = tuition + room + board. COA there is about $38k.

Next year OOS COA for Dietrich (arts and sciences) is $52K.

Notable: Pitt is not a true public university. It (along with Temple and Penn State) are “state-related.” Pennsylvania gives them very little money, and every penny goes towards reducing tuition for Pennsylvania students. Pitt does not give admission preference to in-state students - they admit whoever they want.

Source: podcast with Pitt director of admissions.

At that level of tuition, 40k in debt seems reasonable

It’s not. At least $13k of that is parent plus or private loans that have exceptionally high interest rates.

If the COA is 200k over 4 years, how much do you think most families can pay up front?

Very few. That’s why most families go instate.

It's 38k a year instate, again what do you think families can actually afford to pay up front?

It’s possibly the most expensive instate school in the US. The instate kids there are from wealthy suburban high schools in Hershey, Philly & Pittsburgh.

[Anonymous]

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Anonymous wrote:Just read on another post that someone is paying $95K/year for USC.
Several kids from my kids' schools are starting there this fall.

I know most on DCUM can pony up $400K for 4 years but how many people like this are really out there?
I also know these schools have 40% (or whatnot) that pay $0/year.
At what point will the price of some of these schools begin to effect the size of their applicant pool?
Either because people don't have the cash or say "that is insane--screw it".

When you’re no longer allowed to take out Parent Plus Loans up to the cost of attendance. NYU & USC graduates are #1 for PPL debt.

Or how about when the schools are on the hook when people default on loans? At the moment, the schools risk nothing when they jack up costs.

What? Why would schools be "on the hook when people default on loans?" Schools do NOT take the loans. Plenty of people go to these schools withOUT PPL.
If parents are dumb enough to take PPL, then they need to deal with the repayment. Nobody is forcing you to do this. There are literally hundreds of schools you can attend that will be affordable and not require more than regular student loans that max out at 27K for 4 years

How can the PPL even work? If you assume that most of these parents are 50+ years old at the time of signing the loan (and don't have cash in hand at the time) how the heck are they going to pay back $200-300K by the time
they retire at age 65? And yes, they can work until they're 80 but realistically not a huge percentage of people have significant earning power over the age of 65 (or are even employable!!)
And not to be too macabre but some (not an insignificant number) will be dead by 65.

I can't imagine 95% of these loans are paid back in full (and many go completely unpaid).
Does the school eat this cost or the federal government?

The federal government. The school gets off scot-free.

+1 The Fed student loan program is the reason college tuition exponentially increased so quickly. As students could borrow more, the schools hiked tuition. They could care less about student debt (the colleges). They get more $$$$$.

The more money the federal government pumps into financial aid, the more money the colleges charge for tuition. Inflation-adjusted tuition and fees have tripled over those same 30 years while aid quadrupled; the aid is going up faster than the tuition.

Parent plus loans, more specifically. Traditional undergraduate students can only borrow up to $27k TOTAL throughout 4 years of college in their own name. Doesn’t matter what the school’s COA is. That $27k number hasn’t changed since 2007, if I recall correctly.

To be blunt, if you can’t pay off only $27k in federal student loans on a 10 year repayment plan, your degree wasn’t worth the paper it was printed on.

You’re equating stafford loans (which have a limit) and parent plus (which don’t)

I’m aware, and that’s not what I was doing. The PP I replied to said the “fed student loan program” in general was the problem, and I explained the distinction.

Parent plus are part of the federal student loan program. If they were just private loans, they would be dischargale and much harder to get

Private loans are as easy to get & and are very, very difficult to discharge. Ex. Sallie Mae, College Avenue, Discover student loans.

People choose PPLs over private loans because PPLs have more favorable repayment plans.

The reason that they are difficult to discharge is that they are part of the student loan program. If they were just personal loans, they would be easily dischargeable

They would be, but that would also mean higher interest rates & more limits on what you could take out. That would lower tuition because people would have less access to unlimited free money.

People say that would “reduce access to college” for disadvantaged students.

How? Most "disadvantaged students" come from lower incomes and are getting major FA to attend most schools. Not many "disadvantaged students" who are full pay at Harvard.

It would reduce access to people who are not smart enough to not go into major debt for undergrad. But in reality, these people would then learn to find schools they can afford if the loans are not available. Nobody is taking $200K in PPL to attend a state school.

The vast majority of disadvantaged students go to public universities, if they go to college, not an Ivy. And saying that disadvantaged students, who are typically FGLI, are being “not smart” about college is offensive.

Was not stating "disadvantages students are not smart". Most disadvantaged students are FGLI and they are getting FA, they are not taking $50K+/year in PPL to get thru college. I'm talking about the donut hole families taking high PPLs when their kid could find affordable schools. IMO that is not a smart choice. Families making $200K+ who think taking major loans so their kid can attend an elite college are not being smart IMO. They can attend a state school for $30K/year and the family can likely help cash flow a significant portion and do not need to take 200K+.

Do you realize that maxing out federal loans is part of the aid package at almost every public school?

Very aware of that. I was a FGLI (or moderately low income--family made ~$30K/year 30+ years ago) student back in the day. Attended a T10 university on FA and struggled to pay the amount of our "family contribution" but we made it work. Back then loans were less so after 5 years (and 2 degrees) I came out with ~$12K in student loans. And paid them off 6 months after finished grad school before interest started. The payment now for ~$27K in students loans over 10 years would be ~$300-350/month. Which should be totally doable for someone with a bachelor degree.

[Anonymous]

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Anonymous wrote:The average student loan debt at Pitt in 2019 was $40,000, so it’s not just privates with these issues.

Pitt is 20k in state COA, 35k out of state. 40k seems about right for that level of tuition.

COA = tuition + room + board. COA there is about $38k.

Next year OOS COA for Dietrich (arts and sciences) is $52K.

Notable: Pitt is not a true public university. It (along with Temple and Penn State) are “state-related.” Pennsylvania gives them very little money, and every penny goes towards reducing tuition for Pennsylvania students. Pitt does not give admission preference to in-state students - they admit whoever they want.

Source: podcast with Pitt director of admissions.

At that level of tuition, 40k in debt seems reasonable

It’s not. At least $13k of that is parent plus or private loans that have exceptionally high interest rates.

If the COA is 200k over 4 years, how much do you think most families can pay up front?

Very few. That’s why most families go instate.

It's 38k a year instate, again what do you think families can actually afford to pay up front?

It’s possibly the most expensive instate school in the US. The instate kids there are from wealthy suburban high schools in Hershey, Philly & Pittsburgh.

Yep pretty sure it’s majority OOS students there now

I grew up in PA in an area where median HHI is only $40,000; no way my hs friends & I could’ve afforded Pitt.

[Anonymous]

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Anonymous wrote:It already is. In theory, we could "afford" to send our kids anywhere. In practice, DC1 chose to stay instate (where we get a tuition break on top of lower tuition anyway, due to one parent's job). Total for DC1 for 4 years should be around $100K, which is about what it was for me to go to an expensive private college back in the early 90's.

It's truly hard to imagine how it would be "worth" $300K more for an undergraduate education. We're already seeing more and more great students choosing public colleges and universities, and that helps to make those schools better. I think the tipping point will eventually be that if costs of private keep rising, the best students will be choosing public, and then the whole system will implode.

There will always be wealthy smart students who can afford the elite schools. Just look at the elite HS in NYC where people pay $50K+/year. Same for all the elite boarding schools in the Northeast. People paying $75 k+ for a year of HS will have the money for college

Yes, there are rich people with smart kids, but my point is, if the smart but less rich kids are all choosing public universities, eventually, the "name brand" private colleges will be diluted with rich but less smart kids, and then what advantage will that name have? I mean, I don't see this happening soon, but as another PP pointed out, back in our day, UMD was an easy, guaranteed admit, and now it's coveted. Plus, Gen Z is just a lot smarter about not leaving college in debt.

You just described Harvard/Yale/Princeton for 300 years of their existence. They will be fine educating smart (but not the smartest) rich kids

Sorry to burst your bubble, but HYP offer the most generous financial aid of any elite private schools. If your kid can get in, they can go because HYP will make it happen. Poor and middle class kids go to HYP because HYP gives them money. Not the other elite private schools. None is so generous with FA.

[Anonymous]

Anonymous wrote:Because not everyone is paying sticker price, I hope. My kid chose an 85K/yr private university, but has a 20K annual scholarship. It makes it a little easier to accept. Even though 65K for an undergraduate education is still completely ridiculous!!!

Indeed it is

[Anonymous]

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Anonymous wrote:I don't think its a tipping point. This question has been asked every year when tuition rises. The answer is that it affects a few more families every year, which is why you have also seen a much larger interest in merit-award giving schools than you did in the past. But its incremental.

I think the tipping point is long past.
All of my children attended or attend in-state schools for one reason only: Price.
My children are top students, but they were not eligible for FA at top 20 schools that interested them. When we did the FA calculators, we got zero FA. Our accountant told us in no uncertain terms that to take out loans to send our kids to college would be insane given our ages (we are older parents) and income.
Those competitive colleges lost out on our kids because of price. We refused to pay the outrageous prices of these private schools, so our kids did not apply.
The price of American private education will continue to rise as long as wealthy parents continue to pay it. We dropped out.

Even as Top students, there is a good chance your kids would not have even gotten into a T20 school---acceptance rates are single digits for most. Majority get REJECTED.
And your accountant is right, taking PPL would not be smart. Your kids are smart, they got a great education and will do just fine in life. Once you realize it's much better to graduate debt free or at most with the $27K of student loans, you can be much happier in life. Your life is not over if you can't attend a T20 school---fact is majority of top students will be turned away even if they are full pay. Too many smart kids, not enough spaces. But there are plenty in the 30-60 range that give great merit and if your kids had wanted a smaller private school, they could have chased merit and likely found a great school that cost same or less than your instate schools.

This is 100% wrong.
My kids did chase merit aid at some lower ranked SLACS. They got $25-$30k in merit. But in-state was cheaper (and my kids got in-state scholarships), so that's the choice we made. My kids did not want to go to large Southern universities that would have given them a free ride.
My kids did not apply to any T20 schools. They did not apply to any NESCAC schools. Their stats put them squarely in the running for most of these schools, but they did not apply. Yes, many smart kids are rejected from these "top" schools, but my kids' friends with similar stats got in to at least one or two of them.

[Anonymous]

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Anonymous wrote:The average student loan debt at Pitt in 2019 was $40,000, so it’s not just privates with these issues.

Pitt is 20k in state COA, 35k out of state. 40k seems about right for that level of tuition.

COA = tuition + room + board. COA there is about $38k.

Next year OOS COA for Dietrich (arts and sciences) is $52K.

Notable: Pitt is not a true public university. It (along with Temple and Penn State) are “state-related.” Pennsylvania gives them very little money, and every penny goes towards reducing tuition for Pennsylvania students. Pitt does not give admission preference to in-state students - they admit whoever they want.

Source: podcast with Pitt director of admissions.

At that level of tuition, 40k in debt seems reasonable

It’s not. At least $13k of that is parent plus or private loans that have exceptionally high interest rates.

If the COA is 200k over 4 years, how much do you think most families can pay up front?

Very few. That’s why most families go instate.

It's 38k a year instate, again what do you think families can actually afford to pay up front?

It’s possibly the most expensive instate school in the US. The instate kids there are from wealthy suburban high schools in Hershey, Philly & Pittsburgh.

Tell that to families in Virginia, where W&M is $40K and UVA engineering is $45K.

And again, Pitt is not a true public.

[Anonymous]

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Anonymous wrote:The average student loan debt at Pitt in 2019 was $40,000, so it’s not just privates with these issues.

Pitt is 20k in state COA, 35k out of state. 40k seems about right for that level of tuition.

COA = tuition + room + board. COA there is about $38k.

Next year OOS COA for Dietrich (arts and sciences) is $52K.

Notable: Pitt is not a true public university. It (along with Temple and Penn State) are “state-related.” Pennsylvania gives them very little money, and every penny goes towards reducing tuition for Pennsylvania students. Pitt does not give admission preference to in-state students - they admit whoever they want.

Source: podcast with Pitt director of admissions.

At that level of tuition, 40k in debt seems reasonable

It’s not. At least $13k of that is parent plus or private loans that have exceptionally high interest rates.

If the COA is 200k over 4 years, how much do you think most families can pay up front?

Very few. That’s why most families go instate.

It's 38k a year instate, again what do you think families can actually afford to pay up front?

It’s possibly the most expensive instate school in the US. The instate kids there are from wealthy suburban high schools in Hershey, Philly & Pittsburgh.

Tell that to families in Virginia, where W&M is $40K and UVA engineering is $45K.

And again, Pitt is not a true public.

UVA and W&M give significant financial aid to instate kids with financial need. Pitt gives none.

[Anonymous]

People are stupid.

Make your kid go into massive debt for a dumb university education with now questionable ROI at these prices.

[Anonymous]

"At public universities, a sizeable number of kids transferred from CC, are nontraditional age, graduate early, are veterans, are living with a ton of roommates off-campus in very questionable living situations and/or are working 25+ hours a week year-round to put themselves through school.

Relatively few are being directly handed, say, $38,000 a year from the Bank of Mom and Dad."

Maybe that's true at most, but the elite flagships are filled with UMC kids. Only 5% of students at William & Mary come from families in the bottom 40% of HHI. https://www.nytimes.com/interactive/2017/01/18/upshot/some-colleges-have-more-students-from-the-top-1-percent-than-the-bottom-60.html

[Anonymous]

I was looking at a couple privates just today and was shocked by the $80k+ COA. I know they may provide some merit aid but it’d have to be close to 50% to make it doable. I think it’s ridiculous. Clearly they’re not looking for people like us.

[Anonymous]

Anonymous wrote:I was looking at a couple privates just today and was shocked by the $80k+ COA. I know they may provide some merit aid but it’d have to be close to 50% to make it doable. I think it’s ridiculous. Clearly they’re not looking for people like us.

Why did you think they were?

[Anonymous]

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Anonymous wrote:I don't think its a tipping point. This question has been asked every year when tuition rises. The answer is that it affects a few more families every year, which is why you have also seen a much larger interest in merit-award giving schools than you did in the past. But its incremental.

I think the tipping point is long past.
All of my children attended or attend in-state schools for one reason only: Price.
My children are top students, but they were not eligible for FA at top 20 schools that interested them. When we did the FA calculators, we got zero FA. Our accountant told us in no uncertain terms that to take out loans to send our kids to college would be insane given our ages (we are older parents) and income.
Those competitive colleges lost out on our kids because of price. We refused to pay the outrageous prices of these private schools, so our kids did not apply.
The price of American private education will continue to rise as long as wealthy parents continue to pay it. We dropped out.

Even as Top students, there is a good chance your kids would not have even gotten into a T20 school---acceptance rates are single digits for most. Majority get REJECTED.
And your accountant is right, taking PPL would not be smart. Your kids are smart, they got a great education and will do just fine in life. Once you realize it's much better to graduate debt free or at most with the $27K of student loans, you can be much happier in life. Your life is not over if you can't attend a T20 school---fact is majority of top students will be turned away even if they are full pay. Too many smart kids, not enough spaces. But there are plenty in the 30-60 range that give great merit and if your kids had wanted a smaller private school, they could have chased merit and likely found a great school that cost same or less than your instate schools.

This is 100% wrong.
My kids did chase merit aid at some lower ranked SLACS. They got $25-$30k in merit. But in-state was cheaper (and my kids got in-state scholarships), so that's the choice we made. My kids did not want to go to large Southern universities that would have given them a free ride.
My kids did not apply to any T20 schools. They did not apply to any NESCAC schools. Their stats put them squarely in the running for most of these schools, but they did not apply. Yes, many smart kids are rejected from these "top" schools, but my kids' friends with similar stats got in to at least one or two of them.

Which ones, may I ask? Oberlin, Kenyon, Macalester, Grinnell? In our experience, you have to go "a tier lower" to get more generous merit - Wooster, Kalamazoo, Allegheny, Gettysburg, etc.

[Anonymous]

Was 100k back in 1991 in certain places.

My brother graduated NYU in 1991 and he would do group projects.

One rich kid his parents bought him a one bedroom condo, with parking spot, he had a BMW and a share in a Hampton house and had money for Broadway plays, Knick games and to go clubbing.

A few kids like that at NYU. Columbia even worse for rich kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The average student loan debt at Pitt in 2019 was $40,000, so it’s not just privates with these issues.

Pitt is 20k in state COA, 35k out of state. 40k seems about right for that level of tuition.

COA = tuition + room + board. COA there is about $38k.

Next year OOS COA for Dietrich (arts and sciences) is $52K.

Notable: Pitt is not a true public university. It (along with Temple and Penn State) are “state-related.” Pennsylvania gives them very little money, and every penny goes towards reducing tuition for Pennsylvania students. Pitt does not give admission preference to in-state students - they admit whoever they want.

Source: podcast with Pitt director of admissions.

At that level of tuition, 40k in debt seems reasonable

It’s not. At least $13k of that is parent plus or private loans that have exceptionally high interest rates.

If the COA is 200k over 4 years, how much do you think most families can pay up front?

Very few. That’s why most families go instate.

+1
Or find a private school that gives merit equal to or better than the COA for in-state schools