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

[Anonymous]

Anonymous wrote:Zero donut hole families will be at the schools so you will only have the extremely rich and the poor attending the privates/ivies. Hopefully--in-state doesn't escalate as fast.

And, in the DMV--donut hole families with multiple kids are around $250k HHI. They can't afford $400k per CHILD. That is $800k for two kids to go to undergrad.

The purported “donut hole” moves as the price goes up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

History behind it:

https://www.usnews.com/opinion/articles/2011/11/23/why-the-government-is-to-blame-for-high-college-costs#:~:text=The%20more%20money%20the%20federal,up%20faster%20than%20the%20tuition.

That brings us to that second well-intentioned federal goal, that all student loans must be repaid. In 1976 federal law was changed to state that student loans would no longer be "dischargeable," or covered by bankruptcy. Along the way, the federal government also removed the requirement that college students have parents or grandparents co-sign for federal loans, making young students solely responsible for payment in full.

This means that if you owe the government money for college and don't pay it back, filing bankruptcy isn't going to help you. You will still owe the government. All you can do is default on the loan or seek early forgiveness. And that's exactly what's happening. According to the Department of Education, the national default rate has increased every year for the last four years, and has nearly doubled since 2005. As the administration forgives more loans and defaults keep climbing, the cost to taxpayers keeps going up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

[Anonymous]

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.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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 schools have NOTHING to do with these loans. These loans are between the people who take them out (Parents/Aunts/Uncles/Adults) and the government/whomever gives them the loan.
I agree, how will most people pay these huge amounts back. The entities giving these loans are responsible for that (and if its the govt they need to stop as I don't need to pay for what stupid people do). I think it is STUPID to take these loans. No school is worth it.

Find a school you can AFFORD---it's not that difficult to do. Search merit awards, go to a state school, make your kid work breaks and summer and earn $10-12K/year. Start at CC if you can't afford 4 year directly. Take Dual entry classes in HS and graduate with your AA and then will likely only need 2-3 years in a 4 year college (3 years if engineering, many can finish in 2 if you planned HS dual entry courses well). Go outside of the T50 schools and get an education you can afford. The T50 is not worth it if you need to take out 200+ in loans.

You’re missing the point. The availability of these loans drives up the COA even for people who are sending their kids to college full pay without loans. And the school can make up whatever COA it wants.

I get that. But the focus should be the Federal govt and anyone who is offering these PPL to people. As long as people are dumb enough to take out these amounts, schools will keep raising the costs. These are private universities and really cannot be controlled by the govt in terms of pricing---they are private entities.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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)

[Anonymous]

[quote=Anonymous][quote=Anonymous]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.[/quote]

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.

[/quote]

This was my situation applying in 2003!

DCUM is a weird bubble of people who really think the very most talented people all apply to the top schools.

[Anonymous]

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.

My DC is at a public college. Many of her classmates are from similar "donut hole" families. Very smart kids (in honors), but their families, like ours, balk at the crazy price of private schools. The private schools, no matter how many applications they get, are not getting applications from the very best and brightest kids from donut hole families. The wealthy and the poor will fill the colleges with $100k tuition. The rest of us will send our kids to public colleges.

[Anonymous]

If you fall into any of the following categories, you automatically become independent (meaning, your parents’ finances don’t count & it doesn’t matter how rich or poor they are) for the purposes of undergrad federal financial aid; tax dependency status is irrelevant:

-You’re a caretaker providing more than 50% financially toward the care of a child
-You’re married
-You’re 24 or older (starts the year you’re turning 24)
-You’re in the military or a veteran
-You were emancipated by a judge due to parental abuse PRIOR to the age of 18

I’ve highlighted the easiest ones to achieve.



Additionally, you can get instate in a state you didn’t go to high school in if you move there for 1-2 years & show that you’re completely supporting yourself financially. That means 1-2 gap years after high school; this would have to happen before starting undergrad.

This is all assuming your child is a U.S. citizen or holds a green card.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

[Anonymous]

Anonymous wrote:There are cheap schools out there, but they tend to be much more spartan. Students usually want the full four-to-six year cruise experience and... well, there's a reason that credit card companies really want students as clients.

New College Franklin (very small, classical Christian liberal arts): $12,500

Deep Springs (very small two-year elite): $0

Webb Institute (very small, elite naval engineering): ~$16,000

Williamson (three-year vocational, for low income): $0

Berea (for low income, Christian work college): $11,000-ish COA or lower

Apprentice School (vocational + engineering): Negative tuition. They pay you, but you are building ships for the Navy.

College of the Ozarks (Christian, conservative work college): ~$15,000 COA

Colleges that use English for instruction in Puerto Rico. e.g. Interamerican's program ($20,000, room+ board).

There are plenty of affordable schools that are still great schools----you don't have to dredge the bottom of "colleges" to do this. Plenty that are $25-30K all in, including living on campus with a meal plan. And in reality if your kid is a top student, they will get some merit at many of these public schools. Other option is to find private schools that give good merit---many $60K schools end up being only $30-35K or less for top students---just look a tier below (you are not going to a T25 school). Student earns $10K/year that brings cost to $20K. $5K in student loans (max of 27K over 4 years----reasonably affordable for most kids to pay off over 8-10 years) That leaves $15K/year for the parent to help pay. Doable for many families. Or take $60K in PPL for the 4 years and then pay those off. But there is absolutely no need to take 200-300K in PPL for undergrad. And if you do, then that's on you and you should pay them off without any assistance, you are a 40-50yo grown ass adult and you signed the loan, so you have to live with it, even if it means you can't retire until 70. Any parent should be able to figure out this is not a smart plan.

[Anonymous]

Anonymous wrote:If you fall into any of the following categories, you automatically become independent (meaning, your parents’ finances don’t count & it doesn’t matter how rich or poor they are) for the purposes of undergrad federal financial aid; tax dependency status is irrelevant:

-You’re a caretaker providing more than 50% financially toward the care of a child
-You’re married
-You’re 24 or older (starts the year you’re turning 24)
-You’re in the military or a veteran
-You were emancipated by a judge due to parental abuse PRIOR to the age of 18

I’ve highlighted the easiest ones to achieve.



Additionally, you can get instate in a state you didn’t go to high school in if you move there for 1-2 years & show that you’re completely supporting yourself financially. That means 1-2 gap years after high school; this would have to happen before starting undergrad.

This is all assuming your child is a U.S. citizen or holds a green card.

This is possible, and people do it, but it’s much harder than it sounds. Good luck fully financially supporting yourself as an unskilled 18-20 year old in California, Texas, Florida, North Carolina, Washington State or Michigan. And applying to college in the midst of that, unless you choose to attend CC in one of those states first.

[Anonymous]

Anonymous wrote:

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.

My DC is at a public college. Many of her classmates are from similar "donut hole" families. Very smart kids (in honors), but their families, like ours, balk at the crazy price of private schools. The private schools, no matter how many applications they get, are not getting applications from the very best and brightest kids from donut hole families. The wealthy and the poor will fill the colleges with $100k tuition. The rest of us will send our kids to public colleges.

This. Is. How. It. Has. Always. Been.

[Anonymous]

Anonymous wrote:There are cheap schools out there, but they tend to be much more spartan. Students usually want the full four-to-six year cruise experience and... well, there's a reason that credit card companies really want students as clients.

New College Franklin (very small, classical Christian liberal arts): $12,500

Deep Springs (very small two-year elite): $0

Webb Institute (very small, elite naval engineering): ~$16,000

Williamson (three-year vocational, for low income): $0

Berea (for low income, Christian work college): $11,000-ish COA or lower

Apprentice School (vocational + engineering): Negative tuition. They pay you, but you are building ships for the Navy.

College of the Ozarks (Christian, conservative work college): ~$15,000 COA

Colleges that use English for instruction in Puerto Rico. e.g. Interamerican's program ($20,000, room+ board).

My kid would not in a billion years want to go to any of these schools. Never.