Just calculated projected college costs for my kid and almost vomited

[Anonymous]

OP here. So I mentioned this to DH, who has worked in higher ed. He said the number one thing that will stop all of this is to get rid of private student loans entirely. He said as soon as students can only take out loans up to the federal limit, "tuition will crater back down immediately."

Similarly to what some of you have said, he said the biggest driver of tuition increases is the ability for students to borrow a ton of money. He also said that if you can discharge loans in bankruptcy, that will reduce banks' incentive to give out these loans like candy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Two points:

1. College tuition soared because the federal government made loans easy to get. The $$ was virtually unlimited, and the colleges found ways to spend it. Now, there’s a whole generation of students who regret their choices, but it’s hard to put that genie (plus all his overpaid college admin friends) back in the bottle.

2. Countries that have free universities have lower college attendance rates than the US, and generally select for college potential at a much younger age than the US. I’m sure this wouldn’t affect any of your special children, but limiting the # of kids that can go to college hurts the upwardly mobile.

Oh, and one more — government-funded college is a huge giveaway to the UMC/rich. It’s an incredibly regressive government program.

Actually, college tuition soared because states drastically cut funding for higher education.

Check out the interactive bar graphs here: https://www.cbpp.org/research/state-budget-and-tax/state-higher-education-funding-cuts-have-pushed-costs-to-students

As an example, from 2008-2018 Louisiana cut funding per student by more than 54%, and tuition rose 106% in the same time frame. The talking point that "government got involved, and costs went up" is being perpetuated by the very same people who pushed for the funding cuts that actually drove increases in tuition.

Then why did tuition at my private law school soar over the same time period? Was that also the state cutting support?

No. It was the school taking advantage of how much their students could and would borrow.

Private schools absolutely do get state funding, as well as federal. Both were cut in tandem with the loosening of loan restrictions (and exclusion from bankruptcy). Shifting the burden from the government to the individual was not a single issue. Loans are only part of it, and they're pushed by the same Contract with America cum Tea Party folks who cut the funding.

[Anonymous]

Anonymous wrote:OP here. So I mentioned this to DH, who has worked in higher ed. He said the number one thing that will stop all of this is to get rid of private student loans entirely. He said as soon as students can only take out loans up to the federal limit, "tuition will crater back down immediately."

Similarly to what some of you have said, he said the biggest driver of tuition increases is the ability for students to borrow a ton of money. He also said that if you can discharge loans in bankruptcy, that will reduce banks' incentive to give out these loans like candy.

And then the top schools will be populated only by the wealthy instead of mostly by the wealthy.

Logic is faulty and there is a reason no one suggests this for other markets that rely on debt, such as housing.

[Anonymous]

I feel like coronavirus is going to adjust costs somewhat. For one thing, there will be fewer full-pay foreign students who set a ridiculously high floor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. So I mentioned this to DH, who has worked in higher ed. He said the number one thing that will stop all of this is to get rid of private student loans entirely. He said as soon as students can only take out loans up to the federal limit, "tuition will crater back down immediately."

Similarly to what some of you have said, he said the biggest driver of tuition increases is the ability for students to borrow a ton of money. He also said that if you can discharge loans in bankruptcy, that will reduce banks' incentive to give out these loans like candy.

And then the top schools will be populated only by the wealthy instead of mostly by the wealthy.

Logic is faulty and there is a reason no one suggests this for other markets that rely on debt, such as housing.

Nope. If students can't take out private loans, tuition will go down, making it more accessible to everyone.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. So I mentioned this to DH, who has worked in higher ed. He said the number one thing that will stop all of this is to get rid of private student loans entirely. He said as soon as students can only take out loans up to the federal limit, "tuition will crater back down immediately."

Similarly to what some of you have said, he said the biggest driver of tuition increases is the ability for students to borrow a ton of money. He also said that if you can discharge loans in bankruptcy, that will reduce banks' incentive to give out these loans like candy.

And then the top schools will be populated only by the wealthy instead of mostly by the wealthy.

Logic is faulty and there is a reason no one suggests this for other markets that rely on debt, such as housing.

Nope. If students can't take out private loans, tuition will go down, making it more accessible to everyone.

You have no evidence of that at all. Sure it will go down some places -- just as not all colleges charge the same now. Do you think the top 50 schools will be forced to lower their prices? Don't you think they can fill their cohorts with full pay-no loans now?

Also, you can't stop all forms of debt, so eliminating one has little effect. Mortgages and other forms of debt will fill the void.

One last polite suggestion: simply repeating your assertion is not a sound way of proving your assertion.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. So I mentioned this to DH, who has worked in higher ed. He said the number one thing that will stop all of this is to get rid of private student loans entirely. He said as soon as students can only take out loans up to the federal limit, "tuition will crater back down immediately."

Similarly to what some of you have said, he said the biggest driver of tuition increases is the ability for students to borrow a ton of money. He also said that if you can discharge loans in bankruptcy, that will reduce banks' incentive to give out these loans like candy.

And then the top schools will be populated only by the wealthy instead of mostly by the wealthy.

Logic is faulty and there is a reason no one suggests this for other markets that rely on debt, such as housing.

Nope. If students can't take out private loans, tuition will go down, making it more accessible to everyone.

You have no evidence of that at all. Sure it will go down some places -- just as not all colleges charge the same now. Do you think the top 50 schools will be forced to lower their prices? Don't you think they can fill their cohorts with full pay-no loans now?

Also, you can't stop all forms of debt, so eliminating one has little effect. Mortgages and other forms of debt will fill the void.

One last polite suggestion: simply repeating your assertion is not a sound way of proving your assertion.

It's just common sense.

Why can schools charge so much tuition now? Because they can fill their classes with people who can give them the money. However, most people can't give them full-price from their own personal accounts. So they take out loans and the schools get some combination of parents' money and the bank's money.

What happens if the bank's money disappears? The parents' money isn't going to replace that difference, so schools HAVE to reduce tuition or give out a crapton more financial aid. Why? Because they aren't going to be able to fill their classes with people who can pay $70K+/year.

It's really not that difficult.

[Anonymous]

Anonymous wrote:OP here. So I mentioned this to DH, who has worked in higher ed. He said the number one thing that will stop all of this is to get rid of private student loans entirely. He said as soon as students can only take out loans up to the federal limit, "tuition will crater back down immediately."

Similarly to what some of you have said, he said the biggest driver of tuition increases is the ability for students to borrow a ton of money. He also said that if you can discharge loans in bankruptcy, that will reduce banks' incentive to give out these loans like candy.

I do not disagree with your DH, but in addition to the availability of loans, the reduction in the states' funding of higher education has been a huge contributor to out-of-control increases. As state schools - which serve as a bellwether for both public and private schools' tuition - increased their tuition and fees, private schools have followed suit, so that their tuition and fees stay apace (proportionately) with those of public schools. And up and up it has all gone.

My NESCAC school cost about $9,000 in 1981 when I attended. Had its tuition and fees increased at the same rate as inflation, it would cost just under $27,000 today. Instead, it costs just under $77,000.

Crazy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. So I mentioned this to DH, who has worked in higher ed. He said the number one thing that will stop all of this is to get rid of private student loans entirely. He said as soon as students can only take out loans up to the federal limit, "tuition will crater back down immediately."

Similarly to what some of you have said, he said the biggest driver of tuition increases is the ability for students to borrow a ton of money. He also said that if you can discharge loans in bankruptcy, that will reduce banks' incentive to give out these loans like candy.

I do not disagree with your DH, but in addition to the availability of loans, the reduction in the states' funding of higher education has been a huge contributor to out-of-control increases. As state schools - which serve as a bellwether for both public and private schools' tuition - increased their tuition and fees, private schools have followed suit, so that their tuition and fees stay apace (proportionately) with those of public schools. And up and up it has all gone.

My NESCAC school cost about $9,000 in 1981 when I attended. Had its tuition and fees increased at the same rate as inflation, it would cost just under $27,000 today. Instead, it costs just under $77,000.

Crazy.

Yeah, you're right. My dad went to Syracuse in the 70s and said tuition was so low then that students really could earn it through working part-time jobs. He worked at the student union. Syracuse's base tuition is now $50K and when you include room and board you're looking at $73K. They estimate students will need to budget an additional $4K/year for misc expenses. Insane.

[Anonymous]

Anonymous wrote:

It's just common sense.

Why can schools charge so much tuition now? Because they can fill their classes with people who can give them the money. However, most people can't give them full-price from their own personal accounts. So they take out loans and the schools get some combination of parents' money and the bank's money.

What happens if the bank's money disappears? The parents' money isn't going to replace that difference, so schools HAVE to reduce tuition or give out a crapton more financial aid. Why? Because they aren't going to be able to fill their classes with people who can pay $70K+/year.

It's really not that difficult.

At SOME schools, of course - but not the top schools, and not the top colleges, which I keep asking about but get no response.

I would agree with you it would have some effect, and some of it positive, such as eliminating many of those for-profit colleges which exploit the system now. But the effect it will have on the top schools is keeping certain folks out who otherwise could go.

A much better solution is better funding for state and community colleges (which are already much cheaper). But please note that despite basic economic theory, (some, rightly or wrongly) people have decided that those are not equivalent to top private educations even though those are substantially cheaper now.

As for your assertion:

Because they aren't going to be able to fill their classes with people who can pay $70K+/year.

The top colleges can now if they want to. Easily.

[Anonymous]

The reason they can't take only the rich kids is b/c the school will suffer from not having top talent. I know we all like to think that all the 'advantages' are going to help our kids be phenoms but that isn't the case. Anecdotally- i don't have statistics, the children of teachers are capable of being highly successful, cream of the crop types and there is no way that they can afford to send them to the top 50 colleges full freight. If the colleges want the 'wojs' of the world they have to have more variation in SEC to grab all that talent.
I think that that there will be some sort of reform and the funding cuts plus no bankruptcy option are leading drivers of this sort of indentured servitude stye loans that we have now. WE just need to keep pushing to refund the schools and have to be ok with them not being so luxurious- college kids need to a orate to clean teh bathroom not a live in maid. Right north college experience sets up this impossibly high UMC living standard that is beyond the reach of most college graduates even without student loan debt.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

It's just common sense.

Why can schools charge so much tuition now? Because they can fill their classes with people who can give them the money. However, most people can't give them full-price from their own personal accounts. So they take out loans and the schools get some combination of parents' money and the bank's money.

What happens if the bank's money disappears? The parents' money isn't going to replace that difference, so schools HAVE to reduce tuition or give out a crapton more financial aid. Why? Because they aren't going to be able to fill their classes with people who can pay $70K+/year.

It's really not that difficult.

At SOME schools, of course - but not the top schools, and not the top colleges, which I keep asking about but get no response.

I would agree with you it would have some effect, and some of it positive, such as eliminating many of those for-profit colleges which exploit the system now. But the effect it will have on the top schools is keeping certain folks out who otherwise could go.

A much better solution is better funding for state and community colleges (which are already much cheaper). But please note that despite basic economic theory, (some, rightly or wrongly) people have decided that those are not equivalent to top private educations even though those are substantially cheaper now.

As for your assertion:

Because they aren't going to be able to fill their classes with people who can pay $70K+/year.

The top colleges can now if they want to. Easily.

NP.

Are you sure about that?

We make $350K/year, which in anyone's book is a lot of money. We have one kid. We will not easily be able to pay the projected college costs. We will manage, but it won't be easy.

Are you certain that all of the top colleges--say the top 25 research universities and top 20 liberal arts colleges--can fill their classes every single year solely with families that can pay full freight?

Harvard's entering class is about 2,000 kids. Say that in the top 25 that's about average. That would mean you'd need to find 50,000 kids every single year whose families can pay that tuition. That would also require abandoning every factor universities normally look at--geographic diversity, racial diversity, etc--and look solely at ability to pay.

For the top LACs, you'd need to find another, say, 10,000 kids whose families can pay.

So you're telling me that you think there are 30,000 kids out there whose families can pay and that schools will just abandon everything they say about wanting a diverse class in order to fill their schools with those families?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

It's just common sense.

Why can schools charge so much tuition now? Because they can fill their classes with people who can give them the money. However, most people can't give them full-price from their own personal accounts. So they take out loans and the schools get some combination of parents' money and the bank's money.

What happens if the bank's money disappears? The parents' money isn't going to replace that difference, so schools HAVE to reduce tuition or give out a crapton more financial aid. Why? Because they aren't going to be able to fill their classes with people who can pay $70K+/year.

It's really not that difficult.

At SOME schools, of course - but not the top schools, and not the top colleges, which I keep asking about but get no response.

I would agree with you it would have some effect, and some of it positive, such as eliminating many of those for-profit colleges which exploit the system now. But the effect it will have on the top schools is keeping certain folks out who otherwise could go.

A much better solution is better funding for state and community colleges (which are already much cheaper). But please note that despite basic economic theory, (some, rightly or wrongly) people have decided that those are not equivalent to top private educations even though those are substantially cheaper now.

As for your assertion:

Because they aren't going to be able to fill their classes with people who can pay $70K+/year.

The top colleges can now if they want to. Easily.

NP.

Are you sure about that?

We make $350K/year, which in anyone's book is a lot of money. We have one kid. We will not easily be able to pay the projected college costs. We will manage, but it won't be easy.

Are you certain that all of the top colleges--say the top 25 research universities and top 20 liberal arts colleges--can fill their classes every single year solely with families that can pay full freight?

Harvard's entering class is about 2,000 kids. Say that in the top 25 that's about average. That would mean you'd need to find 50,000 kids every single year whose families can pay that tuition. That would also require abandoning every factor universities normally look at--geographic diversity, racial diversity, etc--and look solely at ability to pay.

For the top LACs, you'd need to find another, say, 10,000 kids whose families can pay.

So you're telling me that you think there are 30,000 kids out there whose families can pay and that schools will just abandon everything they say about wanting a diverse class in order to fill their schools with those families?

Sorry -- that last number should be 60,000, as the approximate total number of kids entering the top universities and LACs each year.

[Anonymous]

Anonymous wrote:She's 3. I used the Vanguard calculator and it came out with the following projected tuition costs:

Public in state: $196,681
Public out of state: $343,454
Less expensive private: $446,837
More expensive private (so the ones that now cost around $60K/year): $539,392

We make a good living and have one kid, but how the hell are we supposed to be able to afford these tuition costs?! To get to the public in-state option, and assuming no appreciation from investment options, we'd have to put away roughly $1100/month starting now. Well, we pay for preschool and have a mortgage, so that isn't happening at all easily. Saving for the most expensive private universities would require putting away $3000/month starting now.

Someone tell me how the hell people do this.

This assumes the tuition will inflate at 5% annual rates.

[Anonymous]

Anonymous wrote:

Anonymous wrote:She's 3. I used the Vanguard calculator and it came out with the following projected tuition costs:

Public in state: $196,681
Public out of state: $343,454
Less expensive private: $446,837
More expensive private (so the ones that now cost around $60K/year): $539,392

We make a good living and have one kid, but how the hell are we supposed to be able to afford these tuition costs?! To get to the public in-state option, and assuming no appreciation from investment options, we'd have to put away roughly $1100/month starting now. Well, we pay for preschool and have a mortgage, so that isn't happening at all easily. Saving for the most expensive private universities would require putting away $3000/month starting now.

Someone tell me how the hell people do this.

This assumes the tuition will inflate at 5% annual rates.

Right, which is the same assumption the College Board calculator makes.