College cost articles

[MarkT]

Fact-Check: Bernie Sanders Promises Free College. Will It Work?

<http://www.npr.org/sections/ed/2016/02/17/466730455/fact-check-bernie-sanders-promises-free-college-will-it-work?utm_source=npr_newsletter&utm_medium=email&utm_content=20160221&utm_campaign=bestofnpr&utm_term=nprnews>
Not much new here but has some good links.

No free won't do it that will just raise the overall cost - it just needs to be reasonable and as low as possible!  I expect a college in NYC to charge more than one in East Snowshoe just because of the living cost differential.

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The WSJ also had an article "Poor Feel the Bite of Rising College Costs"
I know a lot of folks can't access it so here is the gem from that article:

"

Boston Architectural College had one of the largest increases in median debt for low-income students. In the decade before the 2013-2014 school year, tuition more than doubled to $18,622. Median debt for poor students rose to $32,888 for the 2013-14 school year.

James Ryan, vice president of enrollment management at the school, says the school’s debt load is likely higher than at other colleges because degree programs require significant practical experience and extend beyond four years. He adds that the recession forced more students to take unpaid rather than paid internships to get practical training.

Mr. Ryan says the college has raised tuition to “try to normalize ourselves with some of our competition,†though he says “a significant amount of that increase†has been targeted toward more aid for needy students.

“We were perceived not as valuable…because we were so much less expensive than other schools,†Mr. Ryan said.

"

This is what's wrong in a nutshell!
1) vice president of enrollment management - are you kidding me!!! - back in my day, college had one president, no vice presidents - the rest were deans and a few assistants - a not for profit educational institution not a freaking business

2) Raise the tuition because 1) has to justify his job somehow 

 

This has got to stop   :cursing:

[Arcadia]

My alma mater which rank within the top 10 worldwide for architecture charge foreigners approx US$28k and locals US$6.2k yearly :lol:

 

However there is a perceive notion locally that a cheaper private college is not as good. Kind of like branded luxury goods mentality.

 

I can read the WSJ article if I use my iphone, it bypass the paywall somehow.

[FaithManor]

On the subject of administration, ya...what's with this. My alma mater, way back in the day, had one president, two vice-presidents, and each one had an administrative assistant and that was pretty much it. A couple people in the business office, two or three in registrar's office, a couple in financial aid, and a few more than that in admission's. Apart from cafeteria and maintenance staff, it was pretty limited. The deans usually even taught a class or two rarely only being full time deans, and some deans had to share an assistant, for certain whole departments did. We had one secretary for all of music and art. Seriously, it ran well, we didn't need all of these extra administrative positions.

 

I think it's pretty nuts where we are today in terms of ratio of administrators to faculty.

 

But, of course there is a lot more to it than this and that includes this business of having to turn schools into spas and what not, and then of course diminished state funding. It was so low at one point in Michigan that one really couldn't consider our two flagships to even be "public universities". I think U of Mi's funding dropped to 9% of its budget. That's not a public institution.

[MarkT]

https://generationopportunity.org/articles/2016/04/27/this-is-the-real-reason-college-tuition-keeps-rising/

[FaithManor]

Interesting read, Mark T.

 

I have always felt that in the most recent years, tuition hikes as well as room and board hikes have been partly the fault of the student loan industry. Take away the ability or expectation that students and parents should go into such extreme debt for college, and colleges will have to rethink. Now that said, here in Michigan, state funding for public universities did completely tank. Totally tanked! I would not call MSU or U of MI "state flagships" anymore. They may have that title, but when you look at how little state funding they receive anymore, they really are private institutions. In the Great Lakes and Midwest regions, this is very true due to lost state revenues from the economic backbone - manufacturing - going overseas and the recovery has been super duper slow, in some places non-existent. Michigan is not the only place hurting in this regard.

 

In my opinion, while the feds should not allow the stafford/perkins loans to be discharged in bankruptcy - this accounts for only a maximum of less than $32,000 per student - private loans, like all others, should be able to be discharged. This would take the teeth out of the private loan industry as there would no longer be such an incentive to loan GOBS of money to students, and even to parents who really can't afford it either. Take away the private loan industry, and college would have to take a look at offering more scholarships, more need based aid, and states would have to prioritize spending for public universities. As it is, many over heavily subsidize community college, and completely under-fund four year institutions.

 

Then again, if they'd stop basing "need based aid" on FAFSA calculations using numbers from 1965 that would be a huge help to all!!!

 

I will also say that part and parcel of this whole thing is the total lack of competition for students. In 2000, there were 4.9 million students in college. in 2015, 20.2 million! That's just huge, and most colleges and universities have not expanded at such a rate. This means the ratio of students applying for the available freshman classes is profoundly high. It means that colleges have practically no competition for the slots except the most selective of schools, and it means that most four year institutions do not have to be the least bit generous with their financial aid packages in order to fill their halls. "We accepted you, take out a bunch of loans, or oh well, we've got somebody else on the line who will." That lack of competition unfortunately leads to no incentive to help students attend. The college will fill its halls with loan victims or upper middle class and wealthy whose parents survived the 2008 mess and still have savings large enough to send their kids to school or incomes large enough to manage the bill, or the opposite, low income kids who get a ton of state and federal aid. Everyone else in the middle class is just plain STUCK, and since this makes up the majority of students applying to college. Institutions just figure "suck it up buttercup" because loans make that possible.

 

I don't think laying it squarely on Pell Grants and Stafford/Perkins loans tells the story. For a dependent student - which describes a huge portion of those attending four year institutions - $23,000 subsidized is the max with another $8000 available unsubsidized. Our state flagships run $28,000-30,000 each year with room and board. Tuition at U of Mi is $13,856. Time four years assuming no more rate increases? $55,424.00 and they aren't generous with merit aid usually. Where is the  other $24,000 coming from? Pell Grant even for low income students with the piddly $1000.00 Michigan Competitive Tuition grant doesn't account for it. Maybe a campus job for a small portion of it. But usually private loans if mom and dad don't have the savings. This does not factor room and board which is another $10,554.00. Where does that come from? Probably loans, and at a cost of another $42,000+ over four years. While the average student loan debt at graduation for U of MI is only around $25,000.00, the reality is that if one eliminated the low income students who get a lot of financial aid and do not have to take out the maximum in federal loans much less private loans and looked only at the middle class students - the debt is astronomically higher. And of course, the other thing this statistic does not show is how much parent debt makes up the difference.

 

I think that the private student loan industry could be the next bubble to burst. The default rate on private loans is growing, and if the feds want young people to graduate college and start participating in the economy - ie. buying better cars, getting a first house, spending, spending, spending - they will have to do something about it because right now an awful lot of college grads are bunking down at mom and dad's, getting apartments to share with a bunch of people, etc., and eating macaroni and cheese and tuna while climbing out from under the mess which translates to a huge segment of the population not spending very much money, and instead of buying stuff and going on vacation with their tax refund - if they get one - it ends up going to student loans, or to pay other bills because they are having a hard time affording basics due to their large student loan payments. It isn't a pretty picture. 

 

In terms of Michigan itself, the two public universities with the highest debt averages are Ferris State and Michigan Tech. Now on behalf of Michigan Tech, I will say their graduates have an amazing "get employed in your major right away and make decent money" record so the debt could very well be worth it. This is not the case for Ferris whose reputation in that regard is much lower. Private schools are way worse. When ds applied to Alma College - a really great private school we would have liked to send him to - the financial aid department was very CAGEY about answering questions about total indebtedness at graduation and kept citing federal loans in their seminars. But at $42,000 a year, we knew this wasn't the whole picture. Our ds got a half ride scholarship, plus $2500 for his art portfolio (so that was a one time thing, not renewable), and the Christian Leadership scholarship (if memory serves this was in the neighborhood of $2000) and so still, added together, there was a big difference between scholarship and final price with no financial aid offered except federal loans which still wouldn't come near paying the balance. When we finally nailed them down which was a lot like chasing running water over Victoria Falls (LOL), the private loan bill average for their students was quite high, and an awful lot of parents were taking out parent plus loans...which I might add were pushed very hard during their financial aid seminars. It was the very same thing when DD applied to Cedarville back in 2008/2009 as well as the other private schools she applied to so the numbers really aren't telling the whole picture. What is available for federal loans per student simply doesn't add up to the national student loan debt. 

 

When you add in the unseemly amount of money spent in "administration", and well...

 

Dh's alma mater has quadrupled in price, nearly quintupled, since he attended. They have only added a couple of majors so no significant increase in the number of instructors, and the size of the student body has not increased appreciably. The number of administrative positions? More than triple what it was when he attended! The quality of instruction however has dropped so much that he would never recommend anyone attend there. The number of full time faculty is at an all time low, the number of adjuncts skyrocketed. No bang for the buck there.

 

If we were not able to help ds, and believe me, it is a real hardship, he would end up $80,000.00 in debt over four years. We pay half of our eldest ds's tuition, and his scholarships cover the rest with his tutoring job on campus paying for his tiny bachelor apartment and utilities. So over four years for him $20,000.00. He will not have any student loans. Middle ds will take out the whole $30,000 in fed loans, and we will still end up contributing $48,000 over four years. It couldn't be helped. The cheaper in-state options did not have his major. I try not to think about eldest ds's senior year when our youngest enters college. Our EFC is now almost one third of dh's take home pay! With three in, I am sure the feds will calculate us at 40-50% of take home pay. You know because somehow while one is paying a third of your income to college, you are supposed to also be savings 10-20% of income for college!!! FAFSA represents an alternate economic universe for the majority of the middle class.

[Carol in Cal.]

Re. competition for slots--we are nearing the end of the Echo Boom, and I think that that will reduce competition for slots, unless there is a sharp rise in the number of foreign students that set their sights on US colleges.

 

Re. loans--I think it is ridiculous that these specific loans are the only ones you can't default out of in bankruptcy.  Ridiculous.  I think that the whole college loan system needs to be revamped from top to bottom.  There are so many 'exceptions' that you can't trust to be there when you need, it makes planning extremely difficult for students and for parents.  And it's difficult to even figure them all out.  

 

Re. the value of a college education--Eh.  The real issue is that there is no longer a sure path to making a living in this country.  There are just good and bad bets, but the former certainty is completely gone, and that bites.

 

Re. free collge--Everyone forgets this, but CA essentially has had almost free community college for as long as I can remember.  And it's really good, except that you don't really know whether your classes will be cancelled or not until about the 3rd week of each semester, so it can be difficult in some areas to finish an AA in two years.  I would argue that that free college has been an outstanding investment of public funds.  It's not so novel as feel the Bern folks often think.  And any citizen can move to CA and qualify as a resident within a reasonable amount of time.

 

 

 

[Bootsie]

 

 

Re. loans--I think it is ridiculous that these specific loans are the only ones you can't default out of in bankruptcy.  Ridiculous.  I think that the whole college loan system needs to be revamped from top to bottom.  There are so many 'exceptions' that you can't trust to be there when you need, it makes planning extremely difficult for students and for parents.  And it's difficult to even figure them all out.  

 

Economically, the student loan market is very different than most other types of lending.  An automobile is collateral for a car loan; a house is collateral for a mortgage loan.  Institutions that make student loans have no collateral, and thus, face much greater risk than many other lenders. 

[Carol in Cal.]

Economically, the student loan market is very different than most other types of lending.  An automobile is collateral for a car loan; a house is collateral for a mortgage loan.  Institutions that make student loans have no collateral, and thus, face much greater risk than many other lenders. 

Essentially they are personal loans, which are not collateralized either.

 

Now, one could argue that it's inappropriate to make these large personal loans to students with no job and no credit, except, bingo, if that's the case maybe it doesn't make sense to make the student loans either, hello?  And additionally, credit card companies let students get credit cards all the time, same principle except higher interest rates.  

 

No, on reflection, it seems to me that personal loans are more common than any other type except real estate loans.  

Edited May 9, 2016 by Carol in Cal.