My kid will be making his college choice in the coming year. As such, he's getting mail from colleges pretty much every day. The mailer from Vanderbilt really struck me as to the wrongheaded thinking of university leaders. On one side was this amazing blurb:
"Vanderbilt financial aid packages DO NOT INCLUDE LOANS.
IT'S FREE MONEY....65% of Vanderbilt students received some type of FINANCIAL ASSISTANCE"
Tell me why college pricing makes shopping for a car look simple, even by pre-internet standards.
Revenue maximization by way of price discrimination. Charging $x as the list price but giving 65% of students a big need-based financial aid package is a lot more palatable than saying the price is $x unless you're rich or foreign, in which case it's $x * 3, even if they're functionally equivalent.
We just went through this. The finalist schools -- a big midwest Catholic school and a large NE state university -- offered scholarships or grants between $16k and $21k per year with some caveats such as min 2.0 GPA at one and FAFSA qualifications staying roughly the same over the four year period.
These scholarships/grants brought the per-year cost close to the University of Ottawa international rates, about $41k/year all in. If my senior had been accepted to UMass Amherst, our in-state university, the all-in cost would start at $33k/year (without FAFSA consideration).
The brand-name private colleges around the Northeast US now have all-in sticker prices of $75k-80k. Financial aid in the form of grants or scholarships (not loans) would have to be $35k-40k to make these schools competitive on a cost basis with the examples given above.
> The brand-name private colleges around the Northeast US now have all-in sticker prices of $75k-80k. Financial aid in the form of grants or scholarships (not loans) would have to be $35k-40k to make these schools competitive on a cost basis with the examples given above.
Harvard's financial aid is such that if your income is under $150,000, the max you pay is 15K a year.
"free money" just screams inflated valuation. it's like credit card companies giving "cash back" so they can take larger fees for themselves. the fees more than cover their costs, so they funnel some of the largess back to the consumer to make sure the gravy train keeps going.
i'd be for having every student leave college with some debt, maybe on a scale of $1K for open-to-all colleges and $10K for the most competitive ones. enough to feel the value proposition, but not enough to laden the futures of those recent graduates.
Over a decade ago when I was applying to schools, Vanderbilt also stood out as the worst experience. Parents were placed in a separate room a told that there only purpose is to pay the bill and the campus tour felt like a ghost town on a sunny Spring Friday
I went to Vanderbilt and graduated in 2013. Their financial aid covered everything up to what FAFSA said my parents could afford- the EFC (expected family contribution) value. Tuition+room/board at the time was $56k, and EFC was $8k, so Vanderbilt covered the full 48k difference with no loans.
Vanderbilt has a very large endowment, and there is a lot of money earmarked for financial aid. I received $30k+ in scholarships that I never personally applied for, and I was able to graduate without loans.
On the flip side, if the EFC is very high and your family cannot afford it, you will have to get loans from another source.
"Vanderbilt financial aid packages DO NOT INCLUDE LOANS. IT'S FREE MONEY....65% of Vanderbilt students received some type of FINANCIAL ASSISTANCE"
Tell me why college pricing makes shopping for a car look simple, even by pre-internet standards.