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In "the Tuition Game" popularity rises with price
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Date: December 12th, 2006 9:47 AM
Average tuition at private, nonprofit four-year colleges — the price leaders — rose 81 percent from 1993 to 2004 , more than double the inflation rate, according to the College Board, while campus-based financial aid rose 135 percent.
The average cost of tuition, fees, room and board at those colleges is now $30,367. Many charge much more; at George Washington University, the sum is more than $49,000.
But aid is now so extensive that more than 73 percent of undergraduates attending private four-year institutions received it in the school year that ended in 2004, not even counting loans.
“We can cushion the sticker shock,” said Amy Gutmann, president of the University of Pennsylvania, which distributes aid on the basis of financial need. “We focus on both middle-income and low-income families.”
So net prices vary widely on a given campus. On some, as many as 90 percent of students receive support, primarily from the college itself or the federal government.
And financial need is not the only basis for it. Many colleges, competing for the students with high grades and standardized test scores that help a college rise in rankings guides, offer merit aid ranging from a few thousand dollars to a full scholarship.
... Take Swarthmore, the elite college half an hour’s drive from Ursinus. With an annual budget of $106 million to educate just under 1,500 undergraduates, Swarthmore spends about $73,690 a student. But its tuition, room, board and fees in the last academic year were little more than $41,000.
“The half of our student body whose families are paying the full sticker price are paying $41,000 for something that costs $73,000,” said Suzanne P. Welsh, the treasurer. “So they’re getting a great discount.”
The other students receive a bigger subsidy: on average, aid totaling more than $28,500, most of it from the college itself. (Swarthmore limits its aid to students with financial need, but that can mean those from families earning $150,000 a year if, for instance, there are circumstances like having multiple children in college.) ...
Still, none of this explains why colleges like Swarthmore and Ursinus — with different student-faculty ratios, endowments and reputations — end up with tuition and fees only a few hundred dollars apart, or less. Or why Harvard’s tuition and fees, at $33,709, are virtually the same as theirs.
One big reason is that institutions of higher learning watch one another.
In November, the finance committee of Swarthmore’s board of managers gathered at a Manhattan law firm and pored over a chart of tuition, room and board at more than 30 prestigious colleges and universities. They were pleased to see that Swarthmore was charging somewhat less than most of its competitors.
That kind of scrutiny led Bryn Mawr to a contrary sentiment, causing the college to raise tuition and fees this year by about 9 percent, their biggest jump in several years. Bryn Mawr officials say they made the decision after their research showed that the college charged less than its rivals and awarded more aid. The officials concluded that raising tuition would not deter applicants, because prospective students already assumed that Bryn Mawr cost the same as comparable colleges.
“The question was, Does that make sense?” said John Griffith, Bryn Mawr’s treasurer and chief financial officer. “Have we benefited at all from being the low price point? And the answer was no.”
Some of the nation’s bigger institutions have also found an incentive to raise prices. As part of an effort to improve its academic offerings and transcend its renown for football, the University of Notre Dame has raised tuition and fees by an inflation-adjusted 27 percent since 1999, to $32,900. In setting tuition, Notre Dame watches 20 other colleges and universities, including the University of Chicago, Emory and Vanderbilt.
“We’re setting it by our competitors,” said the Rev. John I. Jenkins, the institution’s president.
But Notre Dame’s financial aid has increased even more over the same period, with undergraduate scholarships up 107 percent after adjustment for inflation. This year the university is distributing $68 million.
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(People) do apparently want a deal, or at least the perception of one. Lucie Lapovsky, a consultant who was once president of Mercy College in New York, conducted a study asking students to choose between a college charging $20,000 and offering no aid, and one charging $30,000 and offering a $10,000 scholarship. Students chose the pricier option.
“Americans seem to like college on sale,” Dr. Lapovsky said.
Many administrators say that without raising prices, they could not maintain or expand economic diversity among the student body. In other words, making college more expensive for some enables less well off students to go.
But Brian Zucker, president of the Human Capital Research Corporation, a consulting firm that works with colleges, is suspicious of that argument, particularly given the growth of merit aid. He points out that many middle-class students borrow tens of thousands of dollars to attend liberal arts colleges and that at some, they may be helping defray the cost of a merit scholarship to a wealthier applicant.
“It’s not a given that the subsidy is going in any predetermined direction,” Mr. Zucker said. “We don’t know.”
http://www.nytimes.com/2006/12/12/education/12tuition.html?_r=1&oref=slogin&ref=education&pagewanted=all |
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Date: December 12th, 2006 9:54 AM
The fact that costs are higher for schools in the Washington DC area is also due in part that the schools there don't receive state aid, since Washington DC is not a state. This is more apparent in the medical schools in this area, since all medical schools, private and public ones (especially Harvard Med), receive government funding in federal and state monies. Georgetown Med, and George Washington Med charge the highest tuition and fees in the nation, simply because thay are lacking in state aid. |
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Date: December 12th, 2006 9:56 AM |
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Date: December 12th, 2006 10:15 AM
GW is not worth the money.
GW *might be* worth the money if one cannot be admitted to a "better" school in the food chain/pecking order of schools. |
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Date: December 12th, 2006 10:28 AM
This strategic decision is motivated by market research similar to that undertaken by dog food manufacturers. In a famous New Yorker article several years ago (captioned "Bow Wow") it was reported that the dog food industry made an important discovery - when you set the price point too low, sales fall off.
Why? Because people assume the quality is low, and want more "prestigious" food for their pets. The same holds true, presumably, in the choice of college for their children. They would rather have a high-priced school with a phony discount than an honestly-priced cheaper school. |
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Date: December 12th, 2006 10:31 AM
I did not miss the point with my previous posts.
GW Medical charge even proportinally higher tuition and fees than GW undergrad, simply because it does not receive state aid. |
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Date: December 12th, 2006 10:32 AM |
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Date: December 12th, 2006 10:34 AM
Thanks for your point.
I stand by my point, which was quite relevant to the OP. |
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Date: December 12th, 2006 11:56 AM |
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Date: December 12th, 2006 4:42 PM |
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Date: December 12th, 2006 6:57 PM
George Washington U. undergrad college does not receive any state funding, since Washingon, DC, where it is located, is not a state.
These medical schools, including Harvard Medical School, both public and private, cannot exist without government funding. Therefore, to make up for the shortfall, GW charges a higher tuition and fee rate than other private schools. |
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Date: December 12th, 2006 11:30 AM |
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Date: December 12th, 2006 4:44 PM |
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Date: December 12th, 2006 11:35 AM |
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Date: December 13th, 2006 2:29 PM |
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Date: December 13th, 2006 2:33 PM
The Pell Grants are the best guide to the "wealth" of the student bodies, since they are given to kids from families with incomes of about $40k -$50k or below per year. |
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Date: December 12th, 2006 10:43 AM
Tulane: 31% U of Denver: 31% Case Western: 30% Southern Methodist: 24% Brandeis: 22% George Washington: 20% Rice: 20% Duquesne: 20% |
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Date: December 12th, 2006 11:31 AM |
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Date: December 12th, 2006 11:33 AM |
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Date: December 12th, 2006 11:27 AM
It's because traditionally, Harvard, Yale and Princeton have always been at the top in terms of tuition price. |
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Date: December 12th, 2006 11:32 AM
http://www.educause.edu/ir/library/pdf/ffp9901.pdf
http://www.educause.edu/ir/library/pdf/ffp0001s.pdf
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Date: December 12th, 2006 11:40 AM
Is it true that 50% of Harvard students pay full-price? It seems like a high number. This statistic is reported in USNews' most recent edition.
The students who benefit the least from this ridiculous game of increasing tuition and then increasing financial aid are the ones who miss qualifying for need-based aid and go to school that offers merit-aid. |
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Date: December 12th, 2006 11:44 AM 46% of BU students are determined to have need-based financial need. But to determine the percentage who actually receive no aid, it's necessary to know what percentage receive a merit scholarship. Do you have this information? |
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Date: December 12th, 2006 4:14 PM
46% received need-based "package" averaging $26,687.
The "package" consisted of a $17,748 need-based grant, and a $4,937 loan.
8% of the class received "merit-based" aid awards, (ie, tuition rakeoffs) averaging $13,403. |
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Date: December 13th, 2006 10:59 AM |
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Date: December 12th, 2006 11:51 AM
“The half of our student body whose families are paying the full sticker price are paying $41,000 for something that costs $73,000,” said Suzanne P. Welsh, the treasurer. “So they’re getting a great discount.”
The other students receive a bigger subsidy: on average, aid totaling more than $28,500, most of it from the college itself. (Swarthmore limits its aid to students with financial need, but that can mean those from families earning $150,000 a year if, for instance, there are circumstances like having multiple children in college.)"
These colleges need to do a better job limiting their expenses. Except for millionaires, I can't imagine anyone considering $41,000 per year a bargain. Why would it be worth it if someone plans to go to law school, where tuition and living expenses will be very high for three years? |
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Date: December 12th, 2006 11:53 AM
Blame it on Charlie Weis. |
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Date: December 12th, 2006 4:23 PM
This does wonders for the "alumni contribution rate" and gooses the USNews rankings!
(USNews uses the alumni giving rate as a marker for "student satisfaction" - 5% of the overall USNews ranking - and may be the sole reason Notre Dame ranks 18th - ahead of Vanderbilt, Emory, Berkeley and other schools with a far lower "alumni giving rate".) |
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Date: December 12th, 2006 8:13 PM
HTH |
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Date: December 12th, 2006 9:13 PM
In the 2007 USNews, Notre Dame has a 78 "overall score" in points with a 48% alumni giving rate, just ahead of Berkeley and CMU at 77 points, with AGR's of 14% and 25% respectively, and Georgetown, at 76 points, with an AGR of 32%. |
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Date: December 12th, 2006 9:17 PM |
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Date: December 12th, 2006 9:30 PM |
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Date: December 13th, 2006 11:06 AM |
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Date: December 13th, 2006 2:33 PM
There are some schools, I am told who reclassify graduates they haven't heard from in 5 years as legally dead, so as to boost the reportable contribution percentage! |
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Date: December 13th, 2006 11:04 AM |
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Date: December 13th, 2006 10:58 AM |
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Date: December 13th, 2006 1:50 PM |