College costs, loans and value

In My Humble Opinion
1

This is a partially-formed synthesis of some recent reading and a few related threads here on the SDMB. Feel free to post supporting and contrary data.

The mother lode of info for this would appear to be USN&WR’s College Compass, but I don’t really want to pony up $30 just to poke around for preliminary info. I might (and might have to) if this comes together. Suggestions for other resources welcome.

Here’s my contention:

[ol]
[li]Top-tier colleges (Harvard, Yale, Princeton, Stanford, MIT etc.) have high tuition and fees, but also have substantial scholarship, endowment and internal financial assistance for students who qualify for this elite tier of education. As a result, their students pay something less than the “list price” and accumulate little if any student debt. These colleges also tend to have modest athletics programs, more focused on the traditional reasons than mass media exposure and income. Many students will come from families with financial resources to pay most of the costs.[/li].
[li]Bottom-tier colleges (4-year) have modest costs and rely on both affordability and government student aid programs. Students accumulate modest debt if any completing a degree at these institutions. Most have low-tier athletics programs that compete regionally and off-media, if at all. Many students will come from families who can contribute little but have incomes that open the door to grants and subsidies.[/li].
[li]The middle range of colleges and universities have ever-escalating costs but lack substantial scholarship and endowment assets. Many students do not qualify for lower-income grants and assistance, but do not come from families that can afford the entire cost. Most students will need student loans to complete their degree and will end up with a substantial debt load on graduation. These schools tend to have the most prominent athletics programs and both receive large donor/grant/endowment funds for these programs and make significant money from media and logo sales. Most scholarships are given to fill these athletics teams with premium players. The athletics department is not only the largest and best-funded, but is the school’s primary “marketing facet” to attract new students and retain contributing alumni.[/li][/ol]
So far, I can’t find any significant contradictions or exceptions in general searching of costs, rankings, athletic standings, and student loan/debt amounts.

Here’s my tentative conclusion: If you are genuinely elite student, a world-class education is yours for somewhere between free and comparatively modest cost. If you are an average student of modest economic means, a low-cost education is readily available.

However… if you are an average to ‘better’ student of moderate means, you are likely to spend a multiple of either top or bottom tier students, sometimes 3-5 years of your expected salary or more, to get something between a second-rate and moderate education. Furthermore, you are likely to overspend for such second-rate results because the schools you applied to were aggressively sold to you, not the least on their fabulous sports history. In other words, it’s another case of the middle class, middle tier, middle ability being convinced that they were too good for modest, affordable “product” and that they could spend their way into the elite tier.
Thoughts? After the University of The Midwest crowd stops steaming? :smiley:

(Also note that I mean this in sweeping terms - there are certainly first-rank students at community colleges, and dull scions at Yale, and colleges with one truly outstanding school amid second-rate sisters.) But in general…

2

If you are a genuinely elite and LUCKY student…those schools now pull from all over the world - and a fraction of the students who qualify are getting in. My cousin didn’t get into Princeton, despite being “elite” because - well, she is a white East Coast woman. They had enough of those in the class already.

And the University of the Midwest crowd can get a good education - depending on the school it won’t be “second rate or moderate” - but it won’t have the cache and reputation of a top tier school. Very few schools are resume building, but that doesn’t mean you aren’t getting a top notch liberal arts education from Grinnell.

You are also leaving out state schools - which - depending on which state school you qualify for resident or neighboring state rates - can be “fairly” reasonable. You will probably still spend 3-5 years of your starting salary - but in my opinion, that is what college SHOULD cost.

(If an engagement ring is supposed to cost six months of salary, your education costing three years of your starting salary should be a no brainer).

3

I think you’re not giving enough credit to the vast majority of institutions of higher learning that offer a very good education to students willing to take advantage of it. There are a ton of schools that are not “top tier” that can give you an excellent education. I’m not saying the top schools don’t open doors, and have other advantages, as they do, but you can expand your brain significantly at most colleges and universities.

4

Education is not the only thing needed to land a job after graduation. Contacts arguably mean more than academic performance. Interviewers only care about your GPA for your first job out of college. The rest will be landed on the strength of your network and/or charisma.

5

As no one with two brain cells to rub together should accept the first, I’m not sure it supports the latter. In any case, it’s only partly about what the total cost is and a little more about how much of that cost you have to carry for the next 5-20 years of your working life. I wasn’t clear, but I didn’t mean starting salary, either - I meant expected middle-years salary, the reason someone chooses that field. Very few new grads take on a full-scale mortgage at 24-25, but vast numbers are taking on an equivalent load just to get a starting salary.

And there’s little room to argue that the connections you acquire from Harvard or Stanford will be incalculably more valuable than those from Texas A&M or UMich. Exceptions, always exceptions, yes.

If there’s a follow-on conclusion, it might be this: just as people need to stop buying overpriced products because a marketing campaign told them to, the middle-tier universities need to stop selling an elite image at an elite price when what they’re delivering is a Chevy midsize.

6

But what I’m talking about is schools where you’ll spend $25k a year, including books and room and board. And if you don’t make $20k - 33k a year coming out of college, you aren’t doing it right. I paid my INTERNS that.

7

By “not doing it right”, do you mean:

  • wrong college (should have gone to DeVry)
  • wrong program (a BA in Irish poetry, what were you thinking?)
  • wrong job (waiting tables at Applebees is not a career move)
8

I’m not sure they “need” to. Seems to be working for them. In fact, if anything, they may have to increase the cost, as many are struggling. With a few exceptions, these schools don’t have a lot of extra cash to boost the bottom line if tuition drops significantly. Maybe the business model no longer works, and maybe they can adjust (on-line learning, etc), but it’s expensive to deliver a four year education the way we’re currently doing it. If the school’s primary revenue source is tuition, I don’t see how it’s going to get much cheaper. I’d guess, based on 15 years on governing boards for institutions of higher learning, that $20,000 or so per student per year is about the break even point. (very rough number of course, and there are a lot of variables)

9

You are not wrong in your understanding of middle tier colleges. One thing that is new is that even well-off families are becoming more price sensitive to education costs.

This is one reason why you see universities with luxury dorms and spa like facilities. It’s not actually a crazy move- it’s a bid to attract full-tuition students (who subsidize everyone else). If you can’t compete on price or exclusivity, you have to compete on something.

10

Yep.

And sometimes, you get out during a recession and it takes a while to get a job that isn’t waiting tables at Applebees.

There is something in this line of thought that really bugs me. Its that somehow, we are all entitled to go to a college with old brick dorms covered in ivy and major in Irish Poetry if that is our heart’s desire. And do it without loans. And, when we get out, someone should pay us to pursue our passion (I hear IBM has a huge literary deconstruction division).

Why its supposed to work this way, in the face of every economic reality known to man, is a mystery.

There is also something else in this line of thought that bugs me…You are born into a middle class family. Your parents, being middle class, presumably have aspirations for higher education for you. But instead of saving money from the moment you are born to fill these aspirations - they buy a Jeep Grand Cherokee, take a cruise every few years, choose to be a single income family - even when the kids are all in school for most of the day, remodel the kitchen, spend $5k a year on traveling hockey (the kids might get a scholarship!), and/or have a collection of Coach purses. I live among these people - and they are almost uniformly shocked to discover when their darlings are seniors in high school that scholarships do not rain down from heaven and the federal government figured you PLANNED for college, and sets your family contribution appropriately.

11

That assumes that the high school senior looked at the expected employment curves 4-5 years out and chose her major (and school) based on that. (Instead of on anything like interest or aptitude.) There are many fields where $30k job openings for degreed candidates draw lines around the block. All this means your student will spend four years or more of starting income, including interest, for the pay of a McDonald’s manager trainee. That doesn’t count the financial impact on things like qualification for mortgages, and that it could take 15-20 years to pay off that load.

Then there’s veterinary medicine, where you’ll accumulate $3-500k in debt ($250-300k from a second-tier school) and find your employment prospects to be a junior partner in a clinic in Cowfarts, Nebraska at $25k. The UC Davis grad will get the job, not the one who spent a quarter-mil from an unknown A&M.

Paying top-tier prices for top-tier goods is one thing. Paying a premium and mortgaging much of your adult life for mediocrity is another. In many cases, students would be better off aiming high in a lower-end school, getting a degree that’s just as useful as a middle-tier one, and not spending a quarter of their life under a crushing financial burden for it.

12

I wouldn’t dispute you. I can’t, however, find a lick of positive value in the situation. I’d read it as “second-rate colleges have been so successful at fostering a universal belief that their degrees are equivalent to top-tier ones and an absolute requirement for success that they can charge anything they like for them.”

I do think it’s all about to collapse, much like the housing bubble and healthcare costs. I wouldn’t be surprised to see an active backlash against middle-grade college degrees (not that I really expect anything that extreme).

13

absolutely.

14

It isn’t a question of whether the education is good; it’s a question of what you get for the price. You’re talking about expanding your brain for say, $100,000 in debt. It doesn’t really matter whether you’re guaranteed a decent professional job just because your mind expanded. You aren’t, but even if you get one it’s an awfully expensive degree.

15

Here is a list of colleges by starting salary and also providing mid-career salary. Graduates of the US Military Academy and the US Naval Academy have the highest starting salaries, but graduates of Princeton University have the highest mid-career salary. In general, the schools on top of the list are the “nerd schools”; MIT, Caltech, Lehigh, etc. Basically, the STEM programs are the way to go for higher incomes, more so than the softer subjects.

16

Current college student here…

I’m in my final year at the community college level. Straight out of high school, I could’ve gone to a slew of public ivies here in CA - and hell, maybe even some of the legitimate top-tier privates like Stanford or any of the east coast schools as well - given that that’s just the type of student who I had been in HIGH SCHOOL. I’ve obviously wound up in a dramatically different situation, and I can tell you that the ENTIRE reason for that is due to the high cost of university, which is sadly one of the sad truths that HS teachers don’t drill into the heads of their students.

I intend on getting a degree in Public Relations with a minor in Scriptwriting for crying out loud, so I’m obviously not en route to any future STEM professions in spite of the apparent dearth of those jobs that employers seem to all be crowing about nowadays. Still, folks in PR can pull in some pretty nice salaries, and job prospects in my case are getting facilitated even more due to all of the retirements that are projected to take place over the next decade.

That said, I’m transferring to an absolutely podunk university next year that is close enough to home that I won’t have to move while also cheap enough that I’ll be able to finish with very little - if any - debt at the end of my studies. And honestly, I REALLY think that this is the direction in which this country ought to move when it comes to higher education. The days when prestigious schools took precedence over small state colleges just because of the fucking NAME are long gone; at this point, we all need to be looking at cost efficiency and graduation rates when choosing where to send our kids to school. Nothing else matters, IMHO of course. :smiley:

17

I’ve got a kid who was just accepted to an in-state public college. She’s selected nursing as her career goal so she’ll be going into a nursing program. She’ll be attending a mid-tier school and the cost of study and living expenses will be about $20K/year. I have reservations about the need to spend that much given that she can easily and cheaply get her first two years of credits at a local community college for a fraction of the price. On the other hand, there is something to be said for the “full college experience” - both the positive and negative aspects.

Or is there?

18

There’s nothing wrong with an expanded mind; a liberal arts degree was once the hallmark of an educated person and neither a joke nor a failure to aim for a job ticket.

Everyone who thought differently, raise your hand… :smiley:

Is there? Or is “the full college experience” something that hasn’t really ever existed except for those who could afford to idle through four Ivy League years? How much of that “experience” is idealized growed-up high-schoolism? How much will be missed by going to a 2-year school for (often excellent) undergrad basics instead of hanging out with a crowd self-pleased by being at Their Dear Future Alma Mater?

That is… how much of all that is just the next thing to marketing shuck?

19

You’re preaching to the choir,** AB**.

I went through the Canadian education system and it’s a little different up there. Also I took a gap year and worked before deciding on a career track.

But my kids are the product of the US education system and the expectations as well as social norms are somewhat different here. I’ve got personal reservations about the expected college track here. But I also don’t want to have my kids to miss out on whatever this college experience is because of my own ideas of what’s “better”.

20

I really love that my cheap public alma mater is tied with the likes of Cornell, Duke, and UPenn. As much as I love to bash it, going there was one of the best decisions I could have made for myself. And I could have gone to Cornell. But it was too damn expensive even with the financial aid package they offered me.

Ithaca is also way too cold. If I’m shivering my ass off now and it’s just 40 degrees, I woulda died up there.

Anyone who says there’s easy answer to the question of where one should study, well, don’t listen to them. Money is very important, but so are other variables.