We were fortunate enough to save from the time our kids were born. Unfortunately, we underestimated tuition costs (assumed 45-50K a year). Although we squirreled away over $250K a year for 2 kids, it will not be nearly enough. My advice is to overestimate your cost and save something, anything from day one. Good luck.
2
So, if you make more than 60k annually then Yale costs 70k per year. That is "cheaper than I think?". I think not.
2
6K is too much for many poor families and its way too much for almost all of them because of boarding fees
In the immortal words of Leo Durocher "Statistics are for losers" I don't care what brilliant statistical analysis you have come up with, college is expensive. What are colleges base costs increases vs inflation ? Does that matter ? Do the affluent subsidize the poor in this analysis ? The 32 colleges that were used is a very small sample of the number of institutions today. Most are in the Northeast and the stat you don't mention is whats the student ratio of poor, middle class to affluent ? A highly flawed study seems silly to base conclusions on.
4
You have to get in first. The acceptance rate at Ivy League colleges is around 4-6%. Have a 5.0 GPA, perfect SAT scores, and spent your summers creating your own successful company or interning with Doctors without Borders? Then you MIGHT have a chance. Though chances are a lot better if you're a "legacy" student, of course.
5
One thing not taken into consideration in the calculations is cost of living. If a person making $150K - full price territory - lives in a place in which the cost of living is 1.5X to 2X the national average, the family gets no real break. Essentially, in high cost areas people earning the equivalent $75 -$100K get to pay the full shot - which is 70-90% of effective income.
Also, looking at the cost of elite colleges is a tiny portion of college reality. Schools that reject 95% of applicants, or even only 85% of applicants are not indicative of college cost. It is terrific that it would be cheap - it is just unavailable.
So people are back to having to play the game to see if they can get a large break from good college for merit, or be able to afford the state school - which may be as hard to get into as the Ivy - or go to a community college and transfer. The strategy a family picks can make or break their kid.
Going to a much better school - a private college without a huge endowment - at more than half the list price can put a student into serious debt, even as they get a top notch education. Since paychecks only recognize education as valuable in a few areas, that debt can be life changing.
We could fund our state schools; we could fund 0% loans. But we won't.
3
Consider that 0% loans would just exacerbate the inflation of college tuition. Easy access and free money have a way of doing that.
I live in one of the more expensive areas of the country. Suppose, my contribution is $30,000. That breaks down to more than $2500 per month. I have three children. One of whom is a teenaged boy, meaning groceries alone run $1000 per month. My car insurance payment is also huge, due to said teenagers. I am still paying $1000 per month for my student loans. Because I live in one of the more expensive areas of the country, things such as after school care and day care cost a great deal and impacted our ability to save for many years. Even now we pay bus, sports and activities fees in the hundreds at our public school. Guitar lessons run $260 a month. Gymnastics is the same. Because of this, we limit our kids to one activity each. We contribute some to 401K, but not enough. We have over the last several years paid $15,000 total for braces. Add to that health insurance, copays and deductibles, I am guessing that runs close $500 to $800 per month. We only ever have one car payment at a time. Currently we are paying for a Mazda 6, a classic 4 door sedan. I love it, but it is nothing fancy. That is not to say that we don't enjoy vacations or extras. We do, But not to the tune of $2500 a month. To think that families can contribute more than $2500 a month, while raising younger children and contributing to retirement is absolutely insane
16
You should factor in the new tax code that rewards the 1% and damages hopes of Medicare and Social Security while burdening newest college grads with enormous debt. Outrage against the GOP should have people taking to the streets as well as voting booths. What will it take? A country where children, the elderly and the educated are punished needs a reset, fast.
2
You are mistaken about the new tax code. That it helps the rich doesn't mean it hurts the middle class. It helps many families by lowering their tax rates and doubling their child tax credit. Higher phaseouts also mean more families can take advantage of some benefits. The only people hurt by the 10% SALT limitation are those in high taxed states. The average real estate tax rate throughout the rest of the country is 3.5%.
2
The graph and conclusion are somewhat misleading. The bar for children from poor families is extremely high, in fact only the ones who are both extraordinarily smart and hardworking even have a remote path to getting in.
Average kids from wealthy families on the other hand often can get in through legacy (e.g. 1/3 of Harvard students) or generous donations beforehand (e.g. Jared Kushner), prepped by heavy tutoring and top private schools.
Social mobility is very low in the US compared to other advanced countries, the university system is an important reason for this.
6
Over here, children are our responsibility and ours only. In most of Europe, children are considered yours but also somewhat the nation's. It's a fundamental difference of view but I tend to agree with the latter. Subsidised daycare, good public schools everywhere and tuition-free universities produce a better outcome for society as a whole. In fact, in countries that have (until recently) not been impacted by mass low educated immigration, like the Nordics, it produces fantastic outcomes. Privileged people and their children still get ahead there by means of professional networks, but at least these parents just accept that their children have to duke it out in college together with many other children of all backgrounds. The US system also has the side effect of putting too much pressure on 16 to 18-year-olds.
4
I disagree. The ability of our behemoth government to deliver quality services is questionable and in no way compares to the ability of much smaller homogeneous countries to deliver services. The closest thing the Europeans have is the EU, against whose controls many non-globalists have rebelled. Here, our government has to compete with private industry. It fails often enough to make people justifiably leery of big government.
1
It might be far more informative if the NYT estimated what percentage of the country’s population actually fit in each of these categories.
2
And this is why averages are a dangerous foundation for a "national" focused story about money. Here in San Francisco, a family of four with a yearly income of $122,000, you will barely stay afloat.
Why our FAFSA app recommended $0 financial aid for our child who attends a 4 year private college to the tune of $65,000/year tuition.
Let's make sure there's accuracy when it comes to regional reality.
10
Vassar College ($70K) proved to be the financial deal of a lifetime for our daughter - after calculating our need-based tuition, it was far less expensive than going to U. of Colorado ($30K) in our hometown of Boulder. I agree with many of the disgruntled commenters - the calculators and estimates can seem bewildering, but I agree with the authors - don't discount 'expensive' private colleges.
1
Ummm...completely confused by this article, headline, etc. I took the "simple online calculator" and learned that my family, which currently makes about $200K, should be happy to spend $65K per year for college. Despite the fact that we live in the Northeast, where the cost of living is so high...and that this is some one-third of our income. That seems bizarre. Instead, we're stretching to pay $27K (already a lot at one-quarter of our income) for a state university. I also question the premise -- why is this focus on "top" or "private" colleges so important. Why aren't we supporting raising the resources for our important public universities.
10
So I work years of 10 hour days to build savings. The grasshopper next door gets a $250K subsidy from my full-boat tuition. Marvelous.
18
I don't understand how colleges expect us to do this ... upper middle class families are expected to come up with or borrow $35,000 per year? On an income of just over $100,000? (Before taxes, that is)
I am thrilled that need-based aid is doing so much for lower income Americans. But to assume that those of us who are vaguely comfortable can afford to pay (or borrow!) one-third to one-half of our annual take-home salary for FOUR YEARS of college for EACH CHILD is ludicrous.
Something has got to change. As a country, we are buried in student debt, millennials and their parents will never be able to crawl out from under it. What are the long term economic implications of this?
13
In what way is paying $280,000 over 4 years for a family making $175,000 with $500k in net worth supposed to be affordable? After that, they're taking home 120k. They're probably paying $60k of that for basics where they live. Are they supposed to sell their retirement assets, sell their home, or completely restructure their life to live on that 60k, which probably covers mortgage, food, transportation to work and nothing else. Should their second child buy their clothes at the Salvation Army so their older sibling can go to a top 30 school? Perhaps you should make some distinction between those making 400-500k with 3+ million in assets (where maybe 70k a year can be found) and these "affluent" people who, after adjusting for local variations in cost of living, aren't actually affluent?
10
I am a single mother (widow) of a student (just entering his senior year in HS). He is considering some schools in that $70K range and I know that we will not receive financial aid or discount as I fall in the "Affluent" category. I'm in the "Affluent" category because I'm DUMB. I retired from the military and worked my tail off after retirement establishing myself in a private sector career. I've saved over $100K in my child's college fund (REGRET) -- not nearly the $280K we will need for 4 years at a private school). Drove 10 year old cars and lived without excessive purchases or vacations (REGRET). I've already put one kid through Public School, over $100K along the way. I have a 10 rather than 30 year mortgage with 3 years left (REGRET) and have a pretty good 401K (REGRET) that will be considered by FAFSA.
Three points I'd like to make: 1) This system drives and rewards the wrong behavior. The more people spend; the less they save, the more financial aid and discounts they will receive. I know people who purchase luxury vehicles every 2 years, take extravagant vacations; yet have college students receiving financial aid and/or grants. 2) College tuition skyrocketed in recent years due to the ease and availability of student loans and grants -- supply and demand 3) The student loan crisis on the horizon is going to make the mortgage crisis of the 1980s look like child's play due to the fact that student loan debt is "unsecured". The system is broken and must be fixed!
17
That seems to be the way this country works. Responsible behavior is punished, irresponsible behavior rewarded. Think back to the 2008 credit crisis, when the reckless risk-takers among the big banks were rewarded: privatized profits, socialized losses. The American way.
6
Yes, my children's college is affordable, because it's FREE. My wife, who is considerably smarter than I, had the foresight to hire private tutors to teach my children German, which was not offered in our school district. At $800/month that wasn't cheap.
But now my kids speak German very well, and can attend university in Germany, where tuition, when if exists at all, is about $50 per yesr. Seriously.
Don't get me wrong: I would love for my children to go to school in the U.S. In fact, they'd both like to attend the Univ. of Michigan, where my parents and I went. But they don't want to walk away from college with a diploma and $100,000 in debt.
So off to Germany they'll go. And if after graduation they decide to stay, who could blame them? Free health care, paid maternity and paternity leave, six weeks of vacation in their first year of employment. I expect at least one will choose not to come back.
This is what the absurd U.S. education system has wrought: a reverse brain drain. They'd stay here if they could, but can't afford it.
6
I'm a current college student at USC, one of the most expensive universities in the country. Fortunately for my family (we would fit under very affluent), I am on a full tuition scholarship and my parents pay less for my college than they did for my private high school. Obviously I come from a place of great privilege. However, other than a few of my loaded international friends, the overwhelming majority of fellow students I've encountered have been somewhere around middle class.
I have friends from the Bay Area where everything is extremely expensive but by dollar amount would probably fit under affluent. Given cost of living, their families are making huge sacrifices to pay full tuition. On the other hand, I've met a number of students who chose USC because it was the cheapest option (less than in-state UC's), many first generation college students and children of immigrants. USC also offers significant aid to the ~1,000 transfer students from community colleges each year.
However, once families make above a certain point that is no longer considered "needy," the price of attending goes up very quickly. Families making $200,000 with two parents working and a mortgage should not pay the same amount as families who do not feel it at all.
I don't know what the answer is, but given that the government is already footing the bill through student loan forgiveness, perhaps they should begin to look out for middle class families and begin holding colleges accountable.
6
I see all of the complaints about affordability for upper middle income families and I agree with them. But how can college be made affordable in a way that acknowledges the different (and invariably limited) level of resources that different schools have to spend on financial aid?
The only answer that I see - which is politically unrealistic - is greater federal government aid in exchange for greater financial oversight by the Department of Education (including limiting or reducing tuition). The DOE could threaten withdrawal of federal loans to non-compliant schools, much like it does with the for-profit school industry.
1
Overlooked is the financial fragility of some small colleges now, especially those colleges with little to no endowments. Many small private colleges rely on tuition to keep financially stable. Only two years ago, Dowling College a small private, non-profit college closed abruptly leaving students unable to finish their degree at their chosen institution. The college was not required to warn the students that it was having financial difficulties. When the college was under financial strain due in part to declining enrollment, it started to offer much financial breaks to prospective students to try to increase enrollment. Many of those students were struggling academically and from already stressed communities. When the college closed, those students were left with worthless credits and many will never finish college. Many small colleges are in financially precarious situations now due to demographics, politics, and price. Anyone sending a young person to college today should investigate the financial stability of the school.
3
the bar chart appears to have three sections while the legend has four categories. What explains the difference?
There are four sections: the lightest grey represents grant aid.
Why is it that every time there is an article in the Times about the insane cost of housing, most of the comments say "Too bad, if you can't pay, you have no right living there. Go somewhere that you can afford. No one owes you anything." The list of comments like that goes on.
But throw an article about college costs out here and all of a sudden, people with money-- just not ENOUGH money-- complain that they no longer can afford college X because their aid was reduced. Okay. So have your kid transfer to a school you can afford. You know, just like the advice you give to people that are displaced from their homes when the price gets too high for them.
2
Germany, top universities, yearly tuition EUR 550, including health insurance and comprehensive transportation.
That is what I call taking care of the future of the young and the country.
Thank you, Mr. Leonhardt. You have no clue.
4
Germany. Not everyone is put on college track.
2
Yes, you have to have the credentials. Then there are other very valuable educational pathways .
4
These estimates if families have only a single child attending college. For middle class families with more than one child in college the economic burden can become substantial. It would be nice to do these calculations taking into account family size as well.
2
A family member works for a highly ranked liberal arts college. Their recruitment teams only target two demographics - extremely rich who can pay full freight, and students from families so poor they'll almost get a free ride. Middle class students go the local state university (and get a better educational experience, in my mind..).
7
The overwhelming majority of high school kids with excellent grades and strong prospects for going on for graduate or professional degrees aren't going to be admitted to any of the colleges on that list. State universities are what matter, and many of them are becoming publicly controlled but privately financed as state support dries up.
8
This article reflects what I consider to be the intentional indifference the Times seems to harbor for middle class households and college costs.
My son attended Johns Hopkins, clearly among the nation’s top universities. In his freshman year, he received an atteactive financial aid package, one that made his enrollment halfway affordable. That aid disappeared in his next and subsequent years; so did campus housing after his sophomore year. Hopkins students are forced to pay usurious rents for what can only be described as flea bag lodgings,
.
While poor and minority students were receiving tremendous incentives, and wealthy families could easily afford the annual $64,000 tuition and fees, we middle class families could not, and had to rely on Parent Plus loans and student indebtedness. That’s what we had to borrow to keep our son at a prestigious university; we are close to bankruptcy, our son still does t have a job a year after graduation, and we are left wondering why we fell for such a bait and switch incentive.
Beware, parents. Pay no attention to these elaborate charts and graphs. If you are a middle class family, with income >$150,000, and you want/hope your child to attend a prestigious university, think again. It is a rip-off, unless you are poor.
19
The real question is: where does the tuition money go? I understand that certain universities are highly reliant on tuition and others less so. But if just 30 years ago tuition per year was $10,000 - $15,000 why, during the last 30 years of low inflation, has tuition gone up six hundred percent or so? Some of the increases undoubtedly go to financial aid so that if a school raises tuition by 4% maybe 2% goes to additional financial aid. How much of each tuition dollar of each university goes to financial aid?
Although it will never happen politically, universities should have to present audited financial statements to participate in the federal student loan program. It's the only leverage that we have over universities to justify their unduly high tuition rates.
4
My daughter just finished her sophomore year in college & we were unpleasantly surprised to find that her financial aid for next year went to almost zero. Why? Because after years of struggling, I finally managed to start a full-time professional job in 2016, & my income showed a "big" increase from 2015. The "big" increase is barely more than the decrease in aid. In looking at the share I'm calculated as being able to provide toward tuition & room & board, it's over one-third of my take-home pay for a year. Something's wrong when people are penalized for trying to do the right thing & work, & when people are expected to be able to spend that large of a percentage of income on college costs.
11
As a parent of 3 college-bound kids, this article puts in black-and-white the vague worry I've had since my oldest child was born 10 years ago. Like many others have mentioned, I'm bemused by my alleged "affluence," as seen by those who set tuition prices. Living in an area where G4s constantly fly back and forth above my Buick, I am frequently reminded of where I actually stand in the US income distribution scheme. It seems upper-middle class people occupy the college tuition doughnut-hole, we make too much money to qualify for financial aid, we are penalized for saving for retirement, and we don't make enough money to simply stroke checks for tuition. (Not to mention those of us supporting elderly parents.)
The worst is that no student is getting a $260k education. Nope. Instead, the tuition funds: (1) a bloated, administrative pay-roll filled with people who don't even teach; and (2) debt service payments on enormous construction loans for wholly unnecessary luxury facilities. It's frustrating.
11
I graduated last month from a selective university not on this list. There's something vaguely nauseating about being told by a columnist that college is less expensive than I think, then reading the data and seeing, Ah, no, this columnist just has a different idea of what the word "expensive" means.
More broadly, though, this article relies on the idea that since college is an investment, it's fair for families to take a (huge) hit to put a kid through college. But is it? Should a middle-class family be expected to rearrange everything to find an extra $80,000 over the next four years--and what happens to a family with multiple children? Is it actually fair to ask low-income students to work during the semester to pay for tuition (in addition to working during the semester to pay for groceries)? Is it the right thing for us to decide collectively that one should graduate with $20,000+ in debt? The rest of the Western world doesn't seem to hold these things as givens.
I believe that this was written with good intentions, hoping to let middle-class and poor folks know that they can go to selective schools. But it feels like another case of "the master's tools will never dismantle the master's house." The system isn't workable, and it's frustrating to be told that we ought to work within it anyway.
11
If only we could squeeze all students into those "top colleges". Too bad a high school diploma means that a person is uneducated. If a college degree is needed to be considered educated then college should be free and compulsory and the first twelve years of school eliminated.
I have a bachelor's degree and post college education, and so do most folks I know and I know MANY with master's degrees, even PhDs and law degrees.
The smartest person I have ever know, no question, was my Nana. I don't mean "In a cute folksy way" -- I mean, well read and articulate, thoughtful and insightful -- she could speak and read FIVE languages, including Esperanto.
Nana had to drop out of 9th grade in order to work in a sweatshop, making sweaters, in 1920.
But the problem you describe is that when something becomes COMMON....it becomes worthless. When I was young, most people did graduate high school but college still MEANT something. Once most people had a high school degree, it started to mean NOTHING.
By the 70s....most people went to college (even if they failed to graduate). Today, its something like 80%. So employers -- faced with a HUGE glut of workers, including illegals -- can be ultra picky and look for "the purple unicorn" -- they can demand that a secretary or sales clerk have a degree.
2
This article isn't telling us everything.
For example, what is the median (not the average, that's worthless) student loan balance a year after graduation?
I'm guessing that in many of these cases, it's well north of six figures, and that is a life-crippling amount.
So you think that an annual income of $175,000 means that you can pay $70,000 per year? Good grief!
8
I wonder what degree of affluence an ultra high net worth individual would be labeled as.
1
I have so many issues with this article's tone of "it's not that bad." First, why is it acting like student loans are free money? Saying the annual bill is only $6K for low-income families is disingenous, when additional costs are deferred via student loans. Several thousand in student loans x 4 years can saddle students of all income levels with crushing loans for years to come.
Second, this statement, really?: "For [families making $175K], a college bill approaching $70,000 can be decidedly unpleasant, yet it doesn’t reorder their lives." In what world does a post-tax expense that is 40% of your pre-tax income not reorder your lives? And what if you have 2 or 3 kids?
All I take from this article is that elite schools are only for the very rich.
7
My daughter in law graduated college in 2011, in computer science. So she got an outstanding job! but even though she did "on the cheap"-- first two years of community college, then transfer to the local state university for the balance -- she graduated owing over $60,000 -- payable over 10 years -- roughly $600 a month. That's like carrying a double mortgage or car payment! she had to defer payments a year too, so she's only now in year 6 and will owe for another 4.5 years.
2
The columnist's obtuse comment that a college bill approaching $70,000 does not reorder the lives of a a family earning $175,000 is beyond disturbing. I understand this is an opinion piece, but surely reality must intrude on occasion. Do not pretend that colleges and universities value equity when they burden a family making $175,000 with the same costs as the truly affluent. Elite colleges and universities value the very wealthy and few others. At some point we need to reconsider whether these universities are offering a public value to justify their tax-exempt status.
11
That's what our tax brackets should look like.
Sadly New York doesn't have a flagship public university to help ease college costs. There's no Berkeley, no Michigan, No UVA or even a Texas or Penn State in the fourth largest (and second richest) state in the union. It's a disgrace!
New York doesn't have a public school ranked in the top 80 at US News and World Report's College rankings, the bible on these matters. Once you're paying another state's out of state tuition, you may as well private.
3
Just because schools are "not-for-profit" doesn't mean they don't make a lot of money. Colleges are a business just like any other and they clearly understand marketing 101. Start with a high list price and offer a "sale" price to all but the dumbest, richest students. Colleges even have an advantage over other businesses in that they have information on how much you can afford to pay that other businesses don't. So colleges can maximize their revenue by charging whatever price the customer can afford.
7
Sounds a lot like renting an apartment. Landlords know what you earn so they can bleed you for every last penny. But no one cares much about that though because the people affected are not affluent.
So if you're "affluent", which is defined by net worth of more than half a million, sending 2 kids to college can cost 280k each. There goes your entire net worth!
It's the middle to upper middle class that feels the squeeze here.
14
What this misses is that if you are poor/lower middle class/middle class, you are already behind. You likely went to a high school that is not as good, you may have had to work while in high school, your parents couldn't afford special lessons, tutoring, etc. It would be interested to see the admission rates and application rates for people from families in the lower quintile for these "top" colleges.
5
If you make $175,000 per year and have a net worth of $500k a $69K PER YEAR, PER CHILD college bill absolutely "reorders" your life. $276K per child (assuming they finish in 4 years). So 2 kids in college wipes out your net worth - all your home value, all your retirement savings. How does that not "reorder" your life?
15
Someone already mentioned the "color of the dots" issue. May I just point out that for those of us who are color blind, many of the dots appear to be the same color. Please don't use color alone to convey information.
2
This op-ed simply does not reflect reality. I barely fit in the "Middle Class" bucket and was given nothing by the Universities wrt financial aid. With total net worth of $1.2M and an AGI of $60K I am being asked to spend roughly $600K for two kids to attend college over the next 4yrs - 1/2 my net worth. Calling it "unpleasant", but doesn't "re-order their lives" is beyond ridiculous. The financial aid process is completely broken. Many of the incentives for getting financial aid are literally the opposite of what we have been taught wrt financial planning and life itself. Net positives for financial aid: Get divorced; don't payoff your mortgage early, rent instead of own, spend your money rather than save - you will be punished for living conservatively, make sure your child works as little as possible not to show too much income, don't have Grandparents gift money to kids for college - tell them to keep it, use gimmicks to hide money like life insurance policies or overseas accounts. I could go on and on...... And we haven't even begun talking about graduate school.
16
I love those NYT articles. They always end up with the 90th percentile making $190K a year detailing why they're not affluent compared to the 10th percentile making $20K a year. I love espscially the argument, it's not only how much you make, but also how much you spend.
Let's imagine a billlionaire complaining about maintenance fees for his private jet and his yacht, this is how ridiculous the upper-middle class is when it complains non stop to Americans making less than the minimum wage.
1
Our daughter graduated in 2016 from a private college in Illinois (about $50,000 a year). With a scholarship for music, the tuition she owed was $25,000 a year. We have 1 child. We saved enough money to pay the extra amount. The first year we applied for the FASA. She received $5000.00. As concerned parents, we realized that would be at least $20,000 at the end of 4 years. We dug into our savings and paid the tuition. At the end of 4 years, she owed $5000.00. When the note came due, she paid it off in 6 months. The interest she paid was $678 OVER 6 MONTHS! WHO CAN PAY THESE INTEREST RATES? I am grateful for my white privilege that I have the education to rat out these insane financial practices but what about my fellow citizens? I care about them too. Stop the college tuition madness! Make college affordable to all citizens!
2
Sorry, Times, but for a family whose total income is $122K a year, with a home valued at $115K in the NYC metro area, paying $15-$40K per year for college is not "cheaper than you think" or "surprisingly affordable"!
12
These estimates for ALL colleges in the US are located on an easy-to-use government website called College Navigator. To use -- Go to that site. Enter the name of your college (or use the search tool to identify colleges). Click on the link to your school. Cluck on the NET PRICE tab. There you will see the average cost of that school by income bracket.
https://nces.ed.gov/collegenavigator/
2
Thank you for writing this. We are not well off, but my son attended Princeton on a hefty scholarship. He graduated in 2013 debt free. Contrary to what a certain Times columnist and many readers seem to think, not everyone who attends a top college is a rich snob. Many got there because they earned it.
2
This entire article is an attempt to justify the out of control college tuition system.
Here's how it works in a nutshell: colleges look at how much money you are able to pay, and they charge you that price. This is price discrimination.
Here's what price discrimination is, according to wikipedia:
"By knowing the reservation price, the seller is able to sell the good or service to each consumer at the maximum price he is willing to pay, and thus transform the consumer surplus into revenues."
The "consumer surplus" in this example refers to the benefit the consumer gets from the transaction.
So what we have is a system where the colleges are able to make everyone pay as much as possible in order to maximize their revenues and minimize the benefits to consumers. It's literally the worst possible system.
8
Landlords do that all the time as evidenced by the many articles in the Times about out of control rents everywhere but no one seems to get up in arms about that or express much empathy for people in that position. People are told 'Too bad. If you can't afford it, so somewhere else. You're not entitled to have what you want." That never seems to apply to situations in which the affluent are affected though.
In any good society education, including college. should be free.
2
In the late 1990's daughter #1 was accepted at:
NYU
UCLA
USC
NYU offered zero financial aid. USC's package was so generous that our out-of-pocket was going to be less than what we'd pay at UCLA. She went to USC.
At the start of her junior year of college, USC informed us that due to the need-based financial aid available to the incoming class of freshman had not been spent, they were going to give us more. We paid nothing, nada, zero for her junior and senior years of college. USC is an exceptionally rich school with extremely wealthy alumni who cough up increasingly large amounts of money for the fundraising campaigns of their alma mater.
5
I didn't know my college bill was different than everybody else's based on household income.
1
I sure would hate to be a poor kid at one of these schools for rich kids.
I would feel like I was from another planet.
6
While we are not quite part of the richest 10%, I'd expect that by the time my son graduates from high school, we will be. When you make $175K, a $70K college bill each year would abso-bleeping-lutely "reorient our lives." And that half million dollars of net worth that makes us sound so rich? That would be the entire value of our home out here on the west coast. We have no other assets worth much. We would not send our son to such an expensive college. We are still paying off our own student loans actually.
5
College is overpriced for lots of people, rich/poor/middle class for many reasons. Mostly, I think, overpaid administrators. Schools have been hiking their tuitions year over year. It's a disgrace.
Even if you pay less because your economic situation is limited, you're still paying a lot.
3
20K+ per year for four years for more than one child may be 'cheaper' but it is financially rough for a middle-class households. David Leonhardt, you don't get it.
3
NYT is becoming disconnected from what it means to be poor. To a poor family $6,000 a year is an apartment in a safer neighborhood, heat in the winter or even a more reliable car to get to work.
8
The author blithely accepts and encourages marxism. What part of US constitution and law suggests that same service should be priced at 70000 for one student and 6000 for other. Progressives have destroyed academia and now shamelessly advocate for open marxism.
5
I grew up poor some decades ago and got scholarships (and, heaven forbid, loans) to get through a top 5 undergrad college and a top 3 professional school. This "revelation" by Leonhardt is kind of late. Everyone knew that.
The reason for this gracious, generous outcome is the group most despised by the Times and by Leonhardt -- alumni (often legacy types) and the top 1%. In fact, without those awful people, we wouldn't even have these universities nor our great museums or hospitals. Just sayin'.
1
The wining of well of liberals , at 200 K +, about paying full freight, is sickening
They should try to support a family of four on $ 59 K - the medium family income in the US
Someone has to pay to educate the gifted poor.
If you insist to send your kid to Harvard, you are paying a voluntary transfer tax that supports the gifted poor. It is your decision.
1
Leaving aside these interesting calculations correlated to social class, it is one of the enduring oddities of American private higher education that the price differential between the elite privates--Harvard, Stanford, Princeton, Yale, etc.--and third- and fourth-rank privates is not very nearly negligeable. Compare this to automobiles or wine, to take a couple of obvious examples. A Rolls and a Chevy would occupy fairly similar price points in this curious system, as would top-of-the-line Burgundies and plonk. The why of this bizarre state of affairs is reasonably clear: in most areas such as housing, upkeep, even salaries, to an extent, costs are fairly similar across the board.
1
I think what is under-reported are the children of what would be called "affluent" or "very affluent" parents by this income criteria that receive significant debt-free financial aid packages from colleges / universities because their parents have not saved for their children's higher education (or did not save significantly) and therefore show less net worth on their FAFSA applications. They made very few sacrifices on vacations, homes, cars, lifestyle, etc. over the years -- and now are rewarded with financial aid packages that are not available to those that saved religiously (and made responsible choices of vacations, housing, vehicles, etc.) for their child's entire life. The FAFSA system basically penalizes those that planned and saved, and rewards those with the same basic economic potential (education level, employment status, salary range, etc.) for failing to plan and save. True, children should not suffer for the lack of planning by their parents, but FAFSA and colleges / universities financial aid offices should not reward these parents with debt-free options to finance their children's education. Each of those packages awarded to a child of a relatively well-off family means one less package for a child from a family that truly cannot afford that educational opportunity -- and, once averaged across the system, means those that saved and planned are paying for those that did not.
11
Your sampling seems biased to the East coast. Yes, there are a sprinkling of other schools like Colorado College, but its still biased. Secondly, you did not bother to include satellite campuses of large State Universities. They will likely offer an education on a par with the even the best private colleges. Just as importantly, they are likely to be less expensive for all income groups.
Maybe I am biased (I taught at UW-Stevens Point for 38 years) but I have also talked to many student advisees and heard all the stories. Frankly, its a crime we do not support our public Universities better than we do and a tragedy that students often leave with a mountain of debt. We can do better than this as a society; it only takes the political will to spend the money.
6
Private funding of college educations, along with legacy enrollments, should go the way of the dodo bird. Between massive endowments at private schools and a fair but rigorous tax scheme for public schools, this nation should be able to provide a free and fair college education to its citizens, including, frankly, many citizens beyond typical "college" age who otherwise could never dream of attending, but who still have the capability to contribute to society at a higher level.
3
This is helpful, especially for lower income families. It is terrifying for me, a parent of two teenagers, who falls somewhere in between upper middle and affluent. College doesn't seem feasible without loans of at least 40K each for my kids.
An important companion article however, is the NYT Upshot piece from January of 2017 which shows the percentage of students at each college from the top one percent of income (roughly 360K+) and from the bottom 60% of income (about 60K-). Many of the elite colleges mentioned here have more students from the top 1% than the bottom 60%.
So for all their talk of generous financial aid, in practice they don't offer that largess to very many students. At Washington University of St. Louis for example, only 6% of the student body is in the bottom 60% of income, and 21% is in the top 1% of income. (Wash U has the worst ratio in the country). Even MIT, Wellesley and Vassar, which are among the most generous, only about 20% get full aid.
3
Some elite colleges—including the one I am working 3 jobs for my son to attend—financially discriminate against single parents in this way: Financial aid offices of many elite colleges require parents to fill out the CSS in addition to the FAFSA. The CSS income information is required from the custodial parent AND the other non-contributing parent. If the other parent refuses to pay anything for child's college education, the university does not care. They calculate the financial aid package and include the other parent's (and their new spouse's) income in their calculation. Then the single parent who is paying the entire bill themselves is left to do just that. AT IVYS, THERE IS NO PROCESS TO EXCLUDE A NON-CONTRIBUTING PARENT FROM THE CALCULATION UNLESS THEY ARE DEAD OR INCARCERATED. This leaves middle class people like me paying the same price as an affluent family. I am more than willing to pay my fair share, but this is not fair.
4
It is fair. It isn't the universities fault or responsibility if one parent refuses to contribute.
1
Thanks to my parents, I obtained a BS from BU in 1987. BU, then and now, is an OK school. There were legions of kids like me there (so-so high school students), who had parents who would write the checks. Literally 95% of the kids there were full-pay. My hunch is that this is still the case at BU and most other private "name" schools. These schools may offer all sorts of discounts to middle and lower class kids, but good luck getting in, folks. These schools know by zip code who generally has the resources to pay in full. They are going after Daddy Warbuck's kids, not the poor kids. With that said, I personally would not send my kids to BU, and I would not stretch to cover any private school outside of perhaps the top 15. I intend on paying cash for 2 bachelors from a state university and encouraging my guys to reach for an advanced degree from the best school possible.
3
One correction to a word choice that might confuse some readers: "poor students," as in the article's fourth paragraph. A better word choice might have been "neediest students." What all readers need to understand is that all of this info is relevant only to top, top students as measured by top GPAs, top SATs and very good recommendations, along with a highly-polished application (essays and activities). No highly selective college will even nod in the direction of a B student who scores below the fourth quartile in the SATs (1200), no matter how wealthy or how "needy." This finely-written article applies only to families whose children have worked very hard in school and whose accomplishments have earned them a chance among equally accomplished classmates. Too many families, learned during my 25 years of college counseling, "have heard" that there are all kinds of scholarships out there waiting to be applied for, or colleges offering great financial aide. Rather, these financial advantages reward the most dedicated students, the worthy, regardless of need, rather than students and families who begin to click into academics only during the end of high school.
2
What if your profile is a mix of poor and affluent? In other words, say your income is low, but you have some assets, colleges seem to base their aid mainly on your assets, even if those assets are set aside for retirement and not college tuition. It's a messed up system that is forcing middle class families to take on huge debt, if they don't have the income to cover out of pocket costs.
2
Also worth noting, as others have already commented, is that income-based class distribution varies considerably by area. To be "middle class" requires a higher net income based on property values and cost of living in major metropolitan areas such as DC or Boston--the Pew Research Foundation created a calculator several years ago that takes these and other factors (age, household size, etc) into account.
For instance, my family of four lives in suburban Richmond and by the NYT classification is just barely upper middle class. Based on the Pew calculator for our area, however, we are solidly middle class; with two children in college next year our family has had to take out a home equity loan, and our oldest daughter will still graduate with over 25k in student loan debt.
2
I still don't get the exorbitant cost of college tuition in the US. Why is the cost in neighboring Canada just a small fraction (less than 10% in many instances) of the US college tuition?
Sorry Mr. Leonhardt, but your argument (only the rich pay) didn't persuade me to accept the value of the US college system.
2
This is unrealistic thinking. First, the "cost" of college begins at birth, in many ways. Parents are preparing their children from the start to be attractive candidates to these top colleges. Some of what is attractive is IQ and/or talent, but it costs money to be able to put your child in activities and programs that groom that IQ/talent. Even if a child gets into the public GATE program, chances are they will be counseled out, as the parents often aren't able to support the child in the discipline and workload that is required to succeed there - often because of the side effects of poverty. Second, what family (not a single person) earning 50K can afford 6K per year? And if they manage to have saved the money to cover the difference, they would then be less likely to be eligible for financial aid. Catch 22. Same with the family making more, who needs to come up with $16K. As long as no one needs to eat, drive or see the dentist or mechanic, you're good. I was a "ward of the state" at 17 and a bright student. I was so very lucky that there were people around to encourage me. I was given an almost full ride at a private university. It still took me 10 years to pay off "the difference" that Mr. Leonhardt mentions so casually.
2
As a professor with 40 years of experience let me answer the question of Observer who writes
Why are private colleges considered the best?
It depends on what you study
To go to Harvard matters ONLY if you pick a subject where you advance as much on social capital and social connections as ability. Law is a classic example . All eight of the current Supreme Court justices received their law degrees from Ivy League schools.
Given the number of law schools in the US, the probability that this happens on merit alone is zero. It's connections, plus ability
But should you study a hard subject, such as physics, or computer science , its different. You advance in life on your ability alone. After the first performance review. No on gives a hoot where you went to college.
Or even if you have a degree. Neither Bill Gates, nor Steven Jobs had one.
4
The higher ed system reminds me of the US healthcare system, in some respects. In both cases, you have a product - in one case, a degree, in the other, medical services - in which the price is highly variable and is set based on a complex set of variables. A BA for your kid could cost you $0, $20,000, $160,000 or $280,000 (tuition only) depending on some mix of your assets, income, your child's academic or sports achievements, your family connections and pure luck. How do you plan for this? In order to save for these various scenarios, most families have to begin saving as soon as their child enters the world, and even then, most families will never be able to put away enough to cover $280,000 plus room and board for one kid. But even if they endeavor to try, it's a wild guess as to what they will wind up paying 18 years down the road. It's a mess and leaves all parents but the most wealthy ones, who can write a check to cover any tuition, with an impossible demand - to save for a bill that could come due that could vary by $100,000s nearly two decades in the future. What a terrible, terrible system. It's doubly awful for us Americans that we deal with this and our equally awful healthcare system at the same time.
4
When a family is struggling to pay the rent, even a contribution of $1,000 per year is like a fairy tale. I graduated with an excellent education from City College of NY as did many other US leaders in politics, economics, science and the arts. At that time - we paid NOTHING for tuition. We paid student and sports fees and the cost of commuting. I got $.25/day for spending money (about $2.00 today?) from my family and also worked for the cost of my books, which at that time were almost always second-hand, not to mention my clothes. We didn't have the internet, which would have driven our costs beyond what our parents could help with but which is so vital today. So many of us proved that NYC's investment in us was worth it. So much for "bootstraps."
2
City College of NY -- the entire CUNY system -- was indeed tuition-free at one time. But admission to CUNY was highly competitive: effectively, a limited number of top students were awarded scholarships. That changed with open enrollment -- a college education for all comers, but no longer tuition-free.
1
not rich by any means and according to the calculator looks like i (my household) am paying full price for my kids.
3
The average US family earns $50K -- that's with TWO adults -- and yet you say "lower middle class" is $40K? and regular middle class is $75K? then most Americans are really not even middle class, are they? Yet they don't get any price breaks -- not on homes or rentals, not on utilities or taxes. They certainly are treated by OBAMACARE as if they were "rich" because they get little or no subsidies and are forced to buy costly HIGH DEDUCTIBLE insurance, despite the fact here it notes they have barely $500 in savings (but face deductibles of up to $10K and more! -- bankrupting debt!)
6
This is a good article - and also an important one. Stanford Professor Caroline Hoxby has shown that there are a lot of poor students who already have the academic credentials to become admitted to a highly selective college (without any affirmative action) but choose not even to apply. One of the main reasons is a perception that they couldn't possibly afford a school like Yale - which has a sticker price of $72,814. This is tragic and wastes our nation's resources. (An additional problem is that these students are often geographically diffuse and lack the resources you more often find for talented students in denser cities.) Many simply choose to attend their local state school. (The highly selective schools in this country are overwhelmingly in the Northeast or California.)
Also, it's worth reiterating Leonhardt's point about the difference in generosity between schools. Several years ago, my daughter was looking at colleges. Her first choice was U Penn and we met with their financial aid officials. We would have needed to pay $22,000/yr ... much less than the sticker price but still a large sum. We researched other similar schools and found a similar result. However, the very top schools were a different story. At Princeton, for example, where she later matriculated, we only needed to pay $9,000/yr. I am eternally grateful to the officials at Princeton both for admitting her and for their generosity.
1
"Affluent" and "Very Affluent" are used pretty darned loosely here. A family of 4 with a household BEFORE tax income of $200,000 is certainly "comfortable", but hardly rich. If they live in an area with high housing costs and high taxes, they are barely middle class. They can no longer deduct much mortgage interest, nor all of their property taxes, and any 2nd mortgage income interest taken to help pay for college. In other words, they are greatly strapped and according to the "wisdom" of the college, must pay the sticker price. Of course, this is so that the colleges can magnanimously give only grants - no loans - to those whose income is either truly in the middle or way below. Once again, just like the government, money is taken from those who have worked the hardest to earn it and contributed the most to society, in order to achieve someone's idea of "fairness", which involves others getting a free, or close to free ride. God forbid they touch their precious endowment, which is greater than the GNP of many small nations!
There is no question that families with a child who is a strong student, but who themselves are of limited means, should be applying to the elite colleges. They will graduate with no student loan debt and they will get far more financial aid than they would from a public university.
But those paying the sticker price? "Doesn't reorder their lives"? They cannot have possibly saved enough and this is a HUGE hit to their income and assets.
8
The author never suggests that college isn't expensive. His point is simply that top colleges can be on par with state universities for low to middle income families. This doesn't even account for the fact that top colleges have much higher 4-yr graduation rates than public schools where graduation is often pushed out to a 5th or 6th year due to overcrowding.
Many comments seem to misunderstand the author's central point. Others complain that $186,000/yr income isn't really affluent. That's simply absurd. At $186,000 you make more than 9 out of 10 people. You make more than double the national average. Tell someone making $40,000/yr that you aren't affluent.
1
I inherited stocks and annuities which I am solely living on. I was sole caregiver for my parent, so couldn't work.
My son enrolled in a private college and received good financial aid freshman year, because this aid was based on pre-inheritance income.
When we applied for financial aid post-inheritance, I was rejected. Apparently, if you have a nest egg well under $1 million, that allows you to pay $65,000+ annual tuition, plus expenses.
Luckily, my offspring wasn't happy at this college, and enrolled himself in SUNY. He has small classes, attentive professors who know him, and is saving a ton of money while getting a quality education.
Why must so many articles obsess about elite college education? I worked at an Ivy League school and was appalled at the self-absorption and snobbery surrounding me.
If you must go elite, save your money for graduate studies. Ironically, some elite schools' undergraduates are taking basic courses at state schools in the summer to save money and graduate sooner.
4
I know plenty of upper middle class families deciding to go with the state flagship school because it is good and for the price. Upper middle class families have a very difficult time paying 70000 a year.
5
The article ignores the very low probability that a student from a low-income family will be accepted for admission by many elite colleges. It is not much of an exaggeration to observe that "Both low-income students at Penn (an Ivy League school with a huge endowment) get great scholarships." Less than 5% of Penn undergraduates are low income; over 60% are high income. Mr. Leonhardt can ask Angelina Jolie to marry him, but he shouldn't build his life plan around her accepting. Similarly, low-income students, and their families, are probably best served by focusing their efforts on in-state public universities - - and the IRS should heavily tax the endowments of elite universities.
3
Most of the better public universities now suffer from the same problem. At Michigan, Texas, University of Virginia, etc. the proportion of students from the very richest families is now also very high. Some public schools, e.g., Colorado or University of Arizona, admit the same proportion of very wealthy students as do the Northwesterns and Stanfords. Even the schools that are doing far better in this regard, e.g., Ohio State or Berkeley, still take a striking percent of students from the wealthiest families. Three decades or so ago this was altogether different. At that time most of the students at those universities came from middle class families.
Neil writes:
"The article ignores the very low probability that a student from a low-income family will be accepted for admission by many elite colleges. It is not much of an exaggeration to observe that "Both low-income students at Penn (an Ivy League school with a huge endowment) get great scholarships." Less than 5% of Penn undergraduates are low income; over 60% are high income. Mr. Leonhardt can ask Angelina Jolie to marry him, but he shouldn't build his life plan around her accepting. Similarly, low-income students, and their families, are probably best served by focusing their efforts on in-state public universities - - and the IRS should heavily tax the endowments of elite universities."
7
Robert, you are correct. And another large and growing segment is wealthy foreign students. North Carolina historically has had underachieving lower schools, but always bragged that their public universities, especially their flagship UNC-CH, were outstanding resources--and they were. But now they're becoming increasingly inaccessible to even the most talented in-state students, especially if the students lack a demographic or personal "hook."
5
The costs for college in the US is in the category of obscene. How to bring them down is a difficult problem to solve when the country at large does not support education as one of the top priorities. Let me not digress.
That college costs are presumably much lower for all but the "very affluent" category. NONSENSE! The cost of living in different parts of the country are poorly considered in how much fin.aid is granted. For example -- home equity of $350,000 and higher means people are "affluent" or "very affluent", thus knocks them out of range for enough financial help is the reality. Most private colleges require families to fill out the additional "CSS" (I think I am remembering the letters) which takes into consideration, among other markers, the value of your house in determining fin.aid qualifications. If you live in, for example, Fresno, CA, the median value of homes is FAR less than San Francisco, LA, NYC, Boston, and their metro-areas. Colleges seem to simply apply an algorithm and eliminate those showing "worth" above a threshold with too little regard for regional differences. This is only 1 example. There are many others
Also, the notion that upon graduation someone is in debt for $10's and $100's is quadruple-obscene.
Like so many other issues, what are the priorities of the USA and how do we live as a society, not in bunkers for the "it's all about me" mindset. Education lifts us all ..... prioritize it, don't make graduates indentured servants.
2
Regardless of your prior assumptions, it is always worth applying to a good school, even if you are not sure you can afford it. Even upper middle class families will probably end up paying the same or less for a private school than a state school, and attending a smaller prestigious school (Ivy, top-tier liberal arts, etc.) does wonders for your opportunities during and after college. Most, if not all schools have application fee waivers available. And even if you don't qualify for fee waivers, spending a couple hundred more in application fees will be well worth it if your child is accepted to an elite private school for the same or lower cost than a state school.
Many people are griping about how the estimated cost of attendance would still be too high - but the overarching point of this piece is to point out that private schools can often cost the same or less as a state school. So even if you'll be taking out loans either way, would you rather owe $40k for an Ivy league or for a state school diploma?
I've been saving for my kid's colleges since they were born, to the tune of about $5K/yr, which is on top of saving for retirement, saving for an emergency fund, saving for our next car when it's needed, etc.
I've been told to expect elite colleges to be about $100K/yr by the time my girls get there. We don't anticipate qualifying for anything besides loans. 2 kids x 4 years x $100K = $800K!
To save for that, I'd have to save $44K PER YEAR for 18 years. Maybe a little less if you count market returns, but still.....
3
This article has a very skewed idea of affordability. My family was square in the "middle" category. With merit- and need-based scholarships (and as much help from my parents as they could swing--2007-2011 was rough), I graduated with $40,000 in debt almost ten years ago. I'm still struggling to pay it back now, and will never recover from the hit I've taken in investments and savings. Only in America could $40,000 at high interest rates be considered affordable for anyone at the start of their careers (and especially for those graduating into a recession).
Happy ending, though: I moved to Canada for my masters and am in the process of immigrating here permanently. Students (and parents), don't forget to consider UBC, Toronto, McGill. You're looking at a great education, a much lower average tuition (esp. considering CAD vs. USD), and an easy path to immigration if you want it.
14
If you go to the actual calculator page, it really doesn't take loans into account in a clear manner. In fact, for my family's situation, it didn't mention loans at all, just mentioning the remaining cost after a work study and grants.
Although I see the NYTimes somehow added in the loan information, I am still concerned this article, in essence, is like a credit card commercial. "Students can often cover [expenses]...through part-time work and a small annual loan." Right. More likely, especially for poor families with no cash on hand, most of the outstanding expense is covered by the loan and the student has the shackle of a payment for decades. Hopefully, they decided to study a field that has available employment; doesn't matter if you went to a top school if you studied a field that doesn't pay.
I just see people reading this and then wondering why their kids end up struggling with heavy debts anyway down the road.
4
Totally disagree with this statement that for those with an annual income of at least $175,000 and a net worth of a half-million dollars or more, "a college bill approaching $70,000 can be decidedly unpleasant, yet it doesn’t reorder their lives." For someone with annual income of $175,000 living in a high tax state, their take-home pay after federal and state taxes are deducted will be about $105,000. How on earth will it not "reorder" their lives for $70,000 of that to go to college? Hello rent, mortgage, other living expenses? I'm sure it's true that at a much higher income bracket, the affluent would not need to reorder their lives, but at that level, it is simply unmanageable to pay full freight. If the income amounts cited here are after-tax, that would be a different story and should be made clear.
34
Totally agree. The Opinion writers are looking through rose-colored glasses. When I went to Princeton in the late 70's the annual total costs were $6000 per year. My parents -- both school teachers -- could easily afford that as it was less than their combined salaries of $45,000. No matter how you parse the statistics now, it is still way too expensive -- whether the costs are $40,000 or $75,000. Only the lower third of the country and upper 5% can afford this. It's unreasonable and really draining our society and young people of equity.
10
I completely agree with Carrie T. Even with income at about double $175K, $70K PER YEAR is a gigantic bill to have to pay, especially if you live in a state with a high cost of living. We simply cannot afford to send our children to very high cost schools because we earn too much to get any financial aid at all, but not enough for it not to "reorder our lives". It's ridiculous.
1
From the comments below, it seems that people don't think they should have to save for college at all. This definitely jibes with the country's low saving's rate.
There have been quite a few comments that it's not reasonable to expect a family that makes $175K a year to pay for a $70K a year tuition. But they should and can--they just need to save for college before their kid goes to college:
$70,000 x 4 years (let's assume the student graduates on time) = $280,000
$175,000 x 18 years (let's assume that the student is a typical child and they're ~18 when they graduate high school and go to college) = $3,150,000
$280,000 / $3,150,000 = 8.9% of what the parents have made over the past 18 years--and that's if they stored this money under their mattress, didn't invest it in a 529 or some other plan.
I agree that depending on where the family lives, making $175K a year might be a lot or it might be very little. And of course, they might not be making $175K a year every year--I'm assuming they started out lower and got raises... But roughly, a family needs to save about 9%. That's not a crazy amount. It may seem like a crazy amount for American households because we, as a country, are notorious for having almost no savings. Maybe that's what we should be talking about in addition to tuition costs.
4
I agree that of course people should save for college, but you're making it sound way simpler than it is. (1) The post-tax income will be much lower than $175K. (2) While you acknowledge that people probably make less earlier on, you seem to downplay it. Salaries often grown in leaps as you get older, since a 5% raise on an early career salary is much less than on a later-career salary. So, many families may have been making considerably less during much of the kid's childhood. (3) Most families have more than 1 kid, so all your calculations on costs and savings need to account for that. (4) Finally, people ALSO need to save for retirement, emergency funds, HSAs, and other savings accounts. It's too simplistic to say that 9% of annual savings is realistic for college when they ALSO need to be saving for all those other things.
5
I would take issue with the idea that a family making $175000 a year not having to reorder their life when faced with the full bill of $70000 a year for an elite college. That cost is about half of post-tax income and would, in my opinion, reorder the family's life in a big way. While your chart notes significant assets, those assets are likely savings for a retirement nest egg and shouldn't be invaded. School loans for this amount constitute a major future burden on the student or his/her family, and can only be considered by someone intent on entering a high-earning profession.
11
Many people need to also consider the cost of graduate or medical school. I know of many professionals still burdened with education debt in their 50s! A great education can be had at the better SUNYs and I think it's a much better value, especially if non-free graduate programs or professional programs follow.
4
I was fortunate in attending the Univ. of California in Berkeley in the early 1950s. Tuition was free. Incidental fees of $35 per term covered medical care. Room and board at the International House was about $500 per year.
4
I know this list emphasizes "elite" colleges, but is there a reason so few public universities were on the list? Only UVA, which leaves out Berkeley, UCLA, and the University of Michigan. Also missing are UNC, Texas, Washington. Because these universities are larger and take more in state students, they don't score as favorably as smaller private universities on surveys like the US News ranking, but as research institutions and engines of social mobility, they are exceptional institutions. UCLA alone enrolls more low income students than the entire Ivy League combined, and it's a research powerhouse - and the NYTimes left it off the list!
It's a shame, because these universities are a very relevant part of the picture. One thing I noticed from this graph is that medium-high income families in expensive locations (like Coastal California) may not be able to afford the tuition levels they will be charged at elite private colleges. The example of a family earning $175k a year with 350K in assets being untroubled by a 70k a year tuition payment is absurd. In 4 years, that's their entire retirement savings! What if they have more than one kid?
It's interesting - low income families at elite private colleges pay roughly the same as they do at UVA. The public college seems to make the biggest impact at the lower band of the "upper income bracket".
Unfortunately, we don't get much data, the entire University of California system is left out of the analysis.
7
You're right about "the public college seems to make the biggest impact at the lower band of the upper income bracket." UVA is 1/2 the price of the Ivys (in state). We make too much to get aid at the elite schools and pay sticker price everywhere. Up to about $250K in income, Princeton is the same price or even cheaper than UVA.
3
Unfortunately, there is no edit button. I should point out that the example was 500k+ in assets, not 350K. Still, it would mean that 2 kids in college would cost $560,000, more than a family's entire net worth.
3
I'm wondering if location of family's residence is factored into the equation. For instance, a higher income is needed to live in the Los Angeles area or the San Francisco area. Is this considered by colleges when considering financial aid?
5
Nope! It's not. Just like the IRS!
One question for me is whether the admissions departments preferentially admit students able to pay full freight, ie, students from wealthy families. Sure, these colleges may offer families with fewer resources discounted tuition or some combo of loans, aid and work study, but how many kids from these families do they admit? Are admissions blind to financial need? Are kids from wealthier families more likely to gain admission than a child who needs a break of almost 100 percent off tuition?
2
It depends on the institution. When I started at Wesleyan University in 2011, it was "need blind" - they ostensibly did not consider the family's finances at all when admitting students, and then assembled financial aid packages based on demonstrated need. My family had an upper middle class income and my total cost of attendance was about $25k my first year, increasing to about $28k my last year. Almost identical to the cost of attending my local state school. Unfortunately a year or two before I graduated, Wesleyan became "need-aware", i.e. they started admitting more wealthy students. This is ostensibly because they were not able to sustain the level of financial aid they were providing on average. Unfortunately the student body got noticeably whiter and richer. But Wesleyan is the exception, not the rule:
https://www.cappex.com/hq/articles-and-advice/college-search/college-lis...
3
My husband and I earn about $300K a year - we are so darn rich! I am still paying off my graduate school loans, my property taxes are $20K a year, I live in an old 3 BR house that I payed way too much for but worked super hard to afford (no help with down payment from mom and dad since we both come from poor families), I spend 1/4 of my net income on child care. Did I choose to live on the east coast? Yes. Was this a frivolous choice? No, and I'm sick of comments insinuating that - do you judge people in small towns in the Midwest for staying in their hometowns? I didn't move to the Tri State area to be fancy - I grew up here, my family is here, and my husband's job does not exist in other, cheaper parts of the country.
Am I lucky to have food security and live in a nice place? - Yes, and I count my blessings everyday. But please don't tell me I can send my kids to expensive colleges as easily as Hedge Fund Joe.
46
The article grossly underestimated the effect of tuition costs on the moderately wealthy; in the $175000 bracket, $70000 is half post-tax income. Try suddenly living on half of what you made the year before.
6
But you're not living on half unless you have zero money besides what you take home post-tax, no savings and zero net worth. That's not accurate. If you are earning $175k pre-tax, and have kids approaching or at college age, it's presumed that you've been earning six figures for a while and even when you were not, you were still saving for their college if you planned to pay for it. The half a mil in net worth comes in handy there too.
1
Amen from another Northeasterner who grew up in poverty and can now afford to send her kids to college. I attribute it to ignorance. Few who have worked hard and actually earned her/his way -- the hard way, without any connections and/or inheritance -- to a $300K combined income would bemoan their privilege.
My alma mater took me out to ask me to hire their graduates. I told them I can't afford to send my kids there. They waxed elegantly (my kids would say "spewed") about their financial aid. I politely informed them 1) even with their "financial aid" I can't afford to send my kids partly because of the additional costs not considered by the colleges or this essay but noted by my fellow bloggers and 2) I know and they know financial aid is not my kids. It's for someone else's kids.
Have you read a College Scholarship book at your local bookstore? Have you or your kids applied for one? In my experience not only do you not get them you frequently don't even get a response.
This essay defines "rich" as $175,000 a year. Are you raising more than 1 kid in a metropolitan area of this country on this amount? Do you consider yourself wealthy?
The system stinks. We have a bunch of elite private universities full of the children of the very wealthy, international wealthy kids, and a cohort of kids whose parents were willing to go into significant debt or are poor enough to get a full scholarship. I refuse to let my kids go into debt or personally sign my house away for their undergraduate education. It's a hole they can never get out of. It affects their life choices and prohibits buying a house.
State universities for my kids. There'll be no effort to hire graduates of my alma mater and certainly no donations. Don't feed this system with your donations.
23
One other thing: this doesn't factor in how many less affluent students go to slightly worse colleges for a discount.
Many students who are capable of going to better schools end up with merit scholarships at schools a tier down because they are more affordable. That affects the sticker price and represents another difference between the truly wealthy and everyone else.
3
Yes, paying 60k a year out of an income of 186k may seem exhorbitant to some of these commenters but why haven’t they been saving for many of years preceding their kids starting college? The answer is because they think that aid will fill the gap between what they need to pay and what they want to pay. In that case, institutions that offer only need based aid will need to be crossed off the list, which includes most of the highest prestige schools. My advice: anticipate that you will need to substantially contribute and start saving early, maybe make some sacrifices if this is important to you.
3
I stumbled upon this paradox as a student from a large middle-class family in rural north-central Pennsylvania during the early 1980s. My teachers advised me to stick to state schools, as they were less expensive. But, I applied to Ivy League schools as well, and it turned out that after need-based scholarships, these schools were much cheaper than state schools. In the end, I graduated Princeton and Stanford, with minimal debt.
I pass this on to encourage students to not settle. I thought I had no chance and I almost didn't apply, but I did, and the schools stepped to make it financially possible. The bottom line seems to be that if you have financial need, definitely apply to the wealthy schools. They want you, they actually cost less and the experience is life changing.
5
This is a complete mess visually. On the gray scale bars, I can't distinguish loans and grants, and the colored dots are almost as hard to distinguish (at least on my monitor). I literally can't tell what any of this means. It would be much more helpful to just present the data in table form.
And speaking of loans -- loans are actually part of what the family pays. It does not make sense to fully deduct them from the full tuition price. Depending on the mix of grants and loans in an aid package and the terms of the loans, a middle class family could be getting a worse deal than the affluent family. Bottom line, student loans are not really aid. It's insane that there's huge public expenditure on loan guarantees to banks. This should all go to grants in aid.
14
I agree with you. I have no idea why they thought it was a good idea to use multiple shades of green for the dots instead of unique colors. I gave up on the graphics due to the extremely poor readability.
1
This piece is informative but the information is not new -- it was easily available to me more than a dozen years ago when the oldest kid applied to college. Elite college was almost the same price as in state flagship school and in hindsight it was very much worth to attend the private school. Second time around the price disparity was a bit bigger for the second kid.
Still worth to go the private route, b/c other "costs" tend to be lower in selective private schools: better internship and networking opportunities, a higher likelihood of finishing in four (instead of five) years. At the other end come the loan payments. We now observe how big a struggle it can be to re-pay those loans for low income students in our kid's circle of friends, even if those loans would not be overwhelming for middle class kids. A 30th loan can loom mighty large for someone with no family resources right out of college. Low income kids contemplating grad school or education/social service jobs will be even more challenged. We definitely need to do more as a society to launch low income kids into college, see them through and then enable them to get a toehold in the middle class.
3
My wife and I make around 150K and have one child but also have limited parental (not to mention zero grandparental) handouts and thus must save aggressively for our retirement. Our 97 honors average 33 ACT white son was accepted at Vassar and Northeastern, which after "scholarships" both charged us about 45K a year net, or some 40% of our after tax income.
So there is likely some price collusion and for people without 250K+ incomes or big family handouts, high quality private colleges remain largely out of reach, though our son will be attending one of the top SUNYs, that after an academic scholarship will cost nearly 2/3 less.
15
There's a widespread misconception that the more prestigious the private college the more expensive it must be, which dissuades a lot of talented kids from lower income families from even considering the most famous colleges. But it doesn't really work like that because the more prestigious the private college the more it gets in donations and earnings on its endowment and thus the more generous its financial aid often is.
So a third tier college might wind up costing you more than Harvard or Stanford.
As Kingsley Amis said in "Lucky Jim," there is no end to the way nice things are nicer than not nice things.
I appreciate your assumption that for kids from non-poor families, the parents are normally paying much of the cost of college. I think that would usually include student loan repayments. The many articles on high student debt always paint the picture of young adults saddled with huge loan amounts they must pay back all by themselves. That would justify taking any decent-paying job, in particular ones of dubious social value. I completely agree that college costs are too high, however.
"Colleges with intimidating list prices aren’t the biggest problem, because they often offer substantial financial aid and have very high graduation rates....The real problem is elsewhere: among for-profit colleges and public colleges with lower list prices but much lower graduation rates."
This comment shows a complete lack of critical thinking by the author. The graduation rates are dictated by the type of students that get accepted and go to these schools. If you took all the "for-profit" students and enrolled them at Harvard, they would not suddenly have high graduation rates. Those for-profit and private schools with low graduation rates still provide an opportunity for students who otherwise might not attend college at all. Many enroll and decide that school is not for them, but at least those schools give them the opportunity to find that out (and many succeed and graduate).
And the answer is not necessarily "community college for all." Community colleges are just as expensive as "for-profit" schools -- it is just that the taxpayer subsidizes much of the bill. The money is still spent by all of us, even if it is not paid directly by the student.
Not to mention that most "for-profit" students went to a "not-for-profit" school first and dropped out. The "for-profit" school gives them a second (or third or fourth) chance that they otherwise might not have.
3
The bottom line is that college in America is oversold. We need to ensure that high school graduates can find decent jobs if they aren't going to college. We used to do that decades ago. Colleges are not meant to be vocational education schools. They are not supposed to remedy the deficiencies of a high school education. Colleges are supposed to extend one's intellectual reach and understanding. They are meant to challenge students by forcing them to open themselves up to new ideas. What we have in America is an education industry that is not educating students; instead it's hobbling them with debt and letting them start their careers owing too much in proportion to what they're earning and what they'll need in the future. This is not new. It was happening in the 1980s and 90s. It should have changed by now.
We need to rethink how we educate students from kindergarten to 12th grade. Every student is not college material and not every student wants to go to college. They deserve a chance at a career too. We could look at what other countries, Germany in particular, do with apprenticeships. Don't we owe our non college bound students more than a commencement speech when they graduate? The truth is that Americans don't like to admit that a rigorous high school education with an apprenticeship can lead to as good a life as going to college. All the children are not above average in America.
9
The idea that it's possible making $200k to afford $70k a year for college is based on a lot of assumptions - number of children, additional family expenses (medical, etc.), other family debt.
Other comments already do a good job of better explaining the situation so I'm just going to add my anecdote. I have $270k in medical school debt. I am about to start a medical fellowship, and in one more year (after 5 years of being paid ~$60k) I will have a job making around $180-220k. My husband, a college professor with a PhD, makes $65k. I have 6 children: 3 stepchildren and 3 biological children. 2 of my stepchildren are starting college this fall.
We don't own a house. My old car just finally died for good. We have no luxuries. But between high medical expenses the last few years, services we've needed for an autistic child, and other unavoidable expenses, we are truly hanging on by a thread. The only reason we manage is the social security survivor's benefits my younger sons will get until they are 18.
In some ways my family is being punished by my current marriage. If my husband had not married me, his salary alone would qualify his children for significantly more financial aid. When I started medical school I did not foresee my current circumstances, having children already starting college at my present career status. Should we have chosen not to get married (or live together - that counts) just so we could afford college?
8
Your husband's college does not have reciprocity agreements with lots of other colleges regarding tuition subsidies for children of college professors? If not, it is among one of the few schools that do not have such a program.
2
Making the cost lower does little to help students with lower socio-economic status fit in with more well-to-do students driving high-end vehicles.
4
I sure wish you would define "top colleges." It seems by "top" you mean only the most expensive and most exclusionary. That's like saying the "top" car is the Mercedes-Benz Maybach Exelero ($8 Mil and one made) when the top selling car is the Toyota Camery at $24,000 (with 300K sold a year). Which one would you buy your child?
Some better ways to "fix" post secondary education in the US:
1) Re-invest in our K12 schools and state universities whose mission is to educate everyone (see ASU's strong example) versus trying to "fix" private colleges whose mission is to educate only a few (see how few chose expand and how often they boast their acceptance [ie: denial] rates).
2) Move on from the bubble tests, grades and encourage students to show what they know (something that is already happening with the Coalition application).
3) Require all accredited colleges to accept credits from other accredited colleges (at least within that state) like New Jersey and New York do. With dual-enrollment on the rise in high schools (see Bard Early College), students are able to finish college in two years instead of four or work and earn a degree right out of high school.
Higher learning and life-long learning are indeed requirements in today's world. Paying a lifetime for four years (most take longer) is a unwise investment of time and money.
4
When factoring how much it would cost for in state tuition at the public University nearby the choice was easy. Our child was lucky enough to get into one of the private colleges listed on your survey. We are middle class and he has a scholarship and we qualify for loans. The cost of his and our loans is about how much it would have cost to go to the public university where he would not have gotten a scholarship.
There are many reasons why we found this to be the best option. This is factoring in that he is at a 4 year residential college and does not have to provide his own food, housing or transportation. The quality of education he is receiving, class size and having actual professors teaching the classes, not TA's. The very important factor of a graduation rate of 4 years that is in the 90% range. A lot of colleges that are less expensive have an abysmal graduation rate of 50% in a 5 or 6 year time span. No savings there.
If you make the choice of going to college in this current system it will cost a lot and you will be in debt even if you can get a scholarship. Until and unless there is a free college system in the US all you can do is research and make the best choice for your family.
3
Yes. I'm not sure many people realize that private colleges with scholarship and aid packages factored in often end up costing the same as state colleges, which generally do not have the same scholarship or financial aid options. Neither cost is affordable for most people, though, and the real problem here is that tuition at state schools has soared in recent years.
5
Poor and middle class students would pay much less, if they were to attend a better college or university. Though that is largely irrelevant. The proportion of such students at those schools is simply too small. The majority of students at the top private and public institutions now come from the very richest families. At a number of those better schools, 60% of the students come from the top 1% of families by wealth and income. On the other hand, there are far fewer middle class students at the better schools than there once were. And the poor have never been fairly or properly represented.
7
Yes, a top-tier college may be far more affordable than its sticker price suggests. But I still can't get over the Times's recent analysis of economic diversity, mobility, and outcomes at top schools. According to the piece, the median family income of a student at Middlebury, for example, is $244,000. $244,000 in income alone? Who are these people? Would they like to meet my kids?
That article also includes a breakdown of students on campus from different parental income bands - that is, the proportion of students from the top .01%, top 1% ($630K+ income/year), top 10%, lowest 20%, and so on. Again, to cite the figures for Middlebury, 67% of students come from the top 10%. 67 percent. From the lowest 20% of income? 68 students. On a campus of some 2500 students, only 68 from the lowest quintile???
Yes, the data used are from a few years back (understandably). But the picture of who these top colleges really serve emerges clearly. So, while it's nice to know that lower-income students get a healthy discount off the sticker, they remain a pitifully small presence at these schools. Access the full article here, type in the school of your choice, and be dismayed: https://www.nytimes.com/interactive/projects/college-mobility/middlebury...
10
$175,000 annual income for a family of 3, both parents working and one teenager, in California is not very wealthy.
8
People don't fit in neat boxes. My family is "Very Affluent" on Income, but "Affluent" on home equity and "middle" on cash. So we make a lot but don't save it. Our oldest is going to college next year and our FAFSA form (government form, how much we can "afford") said we could afford $89,000 a year. We received no aid from any of the 10 schools, just offers of $5000 in unsubsidized loans. We have FOUR KIDS so cost is definitely a consideration for our family.
In state, UVA would have been $32,000 a year, and William and Mary $37,000 a year. Princeton would have been more affordable (not a humble brag--she didn't get in anyway!) if our family income was under $250,000... but the school sent me a chart that shows aid falls off a cliff with income over $250,000. So we would have been paying $70,000 a year, the same as the seven figure a year and lots of investments families.
In the end, our daughter is going to VCU, which gave her a big academic scholarship and it will be half the other VA state schools. Having been through the college application process personally this year, the system is crazy and broken although the calculators did warn us we would pay sticker price plus at most schools.
We also know our daughter may have been selected at some selective schools over other equally qualified kid due to our ability to pay over equally qualified lower FAFSA score kid. Not really a true merit based system.
6
You said you "make a lot, but we don't save it." Isn't that part of the problem? You earn a lot and because you choose to spend it, you expect to be treated as if you did not earn as much as you do?
1
Please stop with these protestations that any American can get ahead in our oh so fair system of education. If you walk around the campuses of any top university you will find almost exclusively the sons and daughters of the rich and upper middle class. The "meritocratic" system has become an even better tool of ensuring inherited privilege than the class-defined and aristocratic systems that preceded it. The few poor exceptions who make it through the bureaucratic wall only serve to prove the exclusionary rule. Private schools and universities are the key tool in preserving and expanding intergenerational inequality in America.
18
Back in the 90s, I went to the University of Virginia as an out-of-state student for undergrad. All in costs (tuition, room, board, books, etc) was about $20K without any financial aid. I graduated in three years thanks to AP courses from high school and heavy course loads. The burden on my upper-middle class parents was doable, but still felt.
Today, the cost for that same education would be triple.
Something is wrong.
We need Bernie's plan of free public college tuition.
Modestly tax Wall Street financial transactions => pay for 4 years of public school college tuition. The plan would create more stability in our markets (less high speed trading) and help all future generations become more educated, upwardly mobile, and independent.
14
UVA, with room and board, is $32,000 a year in-state, which is the big dicount. Out of state is up to $62,000 with $46,000 of that being tuition alone It was $12,000 all in, in-state when I graduated in '91.
5
Your 2018 numbers are accurate. Our daughter applied to UVA this year and in-state the all-in cost is $32,000. Half the price is room & board, meal plans, fees...it feels like there is pressure to not increase tuition too much so much of the inflation is happening in the 2nd bucket.
See also "No College Kid Needs a Water Park to Study" article on January 9th in this newspaper.
This higher education bubble is ripe to burst.
2
Having general revenue subsidize the privileged rich and upper middle class who are allowed into expensive schools would be about the most regressive tax in American history. It would make the mortgage interest tax deduction look progressive.
A misleading article- the title suggests that great colleges are affordable for poor students. They're not, really, and that's if you can even make it there.
According to the NYT, The median family income of a student from Yale is $192,600, and about 70% come from the top 20 percent. Yale has alarming levels of economic homogeneity. To focus on how great schools can be "cheap" for poor kids if you can somehow make it in paints these elite institutions as engines for upward social mobility. They're decidedly not.
Look at the data. Look at who gets in. Who attends. They're gatekeepers.
19
I agree with Daniel here. The graphs and charts give equal space to the income categories (poor, lower middle, middle, upper middle, affluent, and very affluent). MOST of the students at these schools are affluent and very affluent. If the school had equal numbers of students in each of these categories paying the rates presented - the schools would go bankrupt. This article is a cruel deception for those families not in the affluent and very affluent category - suggesting that college really is affordable for your kid. The poor kids are 'tokens' - not by ability (I suspect they are much brighter than the affluent kids) - they are tokens in that they can't really pay enough to support the school. They are subsidized by the wealthy paying students but don't expect the Universities to let in more subsidized students. The financial math does not work out.
6
As a once-lower-middle class student who actually attended one of the institutions listed in the chart, I would beg to differ. Since I graduated in the early 2000s, my alma mater has instituted a no-loans policy for students from families earning under about $60,000, but even when I attended, almost all of my tuition was covered through grants; I ended up with only about $12,000 in loans. The families who get squeezed the hardest are those in the "doughnut hole" -- too wealthy for significant aid, too poor to pay $70k/year -- but for students whose families genuinely lack assets (no house, no car, no stocks), elite schools can actually be quite affordable as well as launchpads into far higher income brackets.
I'm not sure this calulator is accurate. As a Virginia resident and alumna of UVA, I put in our particulars for two in college and came out with an expected $10,100 grant/scholarship from the University. UVA gives out less than 5% of its financial aid for merit based grants. 95% is need based. Believe me, I won't hold my breath my aid when our two youngest our in school. I halfway hope they decide to start at Northern Virginia CC.
1
My daughter graduated from Princeton in 2015. Their philosophy was simple: No student should graduate in debt, regardless of family income. They held true to their word as tuition, room, and board was significantly less than our state schools here in NY. This is made possible by endowments of 25+ billion. The ivies are probably the best bargain imaginable, so don't feel intimated by the myth of high priced, top=tier universities if you are a low to mid income parent.
4
As others have noted, top colleges are increasingly moving to the barbell approach - only available to the extremely rich and the poor. For the middle and upper middle class, which used to be their core constituency, it is becoming increasingly difficult.
Which is particularly ironic because though we hear all of the stories of the super rich alums of Ivy League level schools, most of their alums are actually upper middle class residents of high cost of living areas. So their alums can no longer afford to send their kids to their alma mater. Let's keep college more affordable - 21 year olds don't need all of these climbing walls and salad bars with 23 types of kale and arugala.
15
College costs today are absurd. Really would like to know where all the money goes. Having 4 kids that I am putting through college is a tremendous financial impact. Granted, I chose of my own free will to allow my children to go to private schools but I take umbrage with the fact that 175K makes me wealthy living on Long Island. Two kids in college at the same time and all four kids in 7 seven years doesn't fit me into any of the slots listed in the article.
I would do it for my kids with or without the financial assistance. But the fact that I don't get any aide because I'm considered affluent with a 200K comp in NY and a 140K college bill per annum seems like a flawed system to me.
16
No, the "real price" is the one paid without any financial aid, and it is obscene at any income level.
8
This article is a diversion from the real issue, which is the exorbitant costs of tuition. Virtually all colleges and universities have become "businesses" during the past 3-4 decades, basing their business model on student loans. This was done to justify exorbitant salaries and benefits for ever-escalating numbers of "administrators", executives, and tenured (not part-time) faculty. Until this business model was discovered, state universities offered almost-free tuition and were staffed by efficient "public servants" earning modest salaries, In this high-tech era, the first solution to this absurd situation is to offer the first two years of college on-line for a negligible fee. There is no difference between watching a computer presentation in a classroom or at home, and the savings to students and taxpayers would be enormous.
17
Families with an annual income of $175,000 and a net worth of a half-million dollars that comes from non-financial assets (like a house) will have a college bill approaching $70,000. That is more than a third of their annual income. How can you say that that won’t reorder their lives? Those parents will need to ask for a loan. Granted, due to their net worth and their credit history/score it might not be too hard to get that money from a bank. But those parents are in their fifties and that loan is an additional burden on their debt (house mortgage).
39
It is more illuminating to look at private universities financial statements to understand college costs. At Southern Methodist University the tuition price and the actual cost per student is a little over 50,000 dollars a year. The average student pays 2/3 of the retail tuition price and scholarships funded from endowments and donations cover the other third. I'm sure poorer students get a very good deal but based on these numbers most of the students come from affluent families and pay the full retail price. Even if they pay 2/3 of the retail price they are paying 33,000 dollars a year in tuition.
3
Shirt sleeves to shirt sleeves in three generations? Not a chance. The Pritzkers, Kochs, and Kennedys are rich as medieval dukes and will stay that way for another 200 years. And their kids will attend the Harvards and the Yales, whatever the cost.
4
"...at elite colleges, poor families pay $6000 per year on average, very affluent families pay $69,000..."
I guess there is social justice after all! We all know that kids from poor families have exactly the same opportunities and upbringing as kids from very affluent families do, so I guess the elite blue-blooded institutions are available to everybody.
NYT, why do you keep perpetuating this weird elitism. How about more articles on making higher education available to all. There's absolutely no reason that, anybody, regardless of income level, should have to pay the obscene costs associated with higher education.
22
So this is what data reporting looks like huh? Talk about losing sight of the forest for the trees. A better headline might be: "Top colleges are cheaper than you think, so long as you are sufficiently poor and/or middle class that your kid attends a mediocre public high school and has little-to-no chance of getting in." American university tuition and the student loan system are appallingly amoral and are on the verge of crippling the economy. Any author using graphs to try to paint a rosy picture around that reality should be ashamed.
12
Even the rich pay less overall.
I sold my house in Los Angeles to a South Korean family who paid in cash. They gave the home to their daughter so that she could attend Loyola Marymount as an in-state student, saving them big $$ in tuition costs.
3
Duke and UVA (in-state) tuitions are substantially similar for me. State unis' tuition are now close to private.
2
These charges are absolutely ridiculous. Perhaps the NYT should be asking why is college so expensive? How much would it cost a student and his/her family to get a law school degree? An MBA? To attend Medical School? To get a PhD?
7
A penniless orphaned relative was admitted to Yale but was offered no financial aid, of any kind, at all.
There are many ways of saying "We don't want you. Go away." They don't always involve a rejection letter.
13
Obviously if you are working hard and saving, you are doing it wrong. Just wait until Bernie gets elected - free college for everybody unless you are rich, then you can pay through the nose via taxes and tuition. In return, the government will send you a college sweatshirt of your choice for the free educations you are providing! Kidding, but they will let you print mailing labels for your quarterly tax payments. Saves you the trouble of writing them. Thanks Dems!
2
“...an annual income of at least $175,000 and a net worth of a half-million dollars or more. For them, a college bill approaching $70,000 can be decidedly unpleasant, yet it doesn’t reorder their lives.”
Really? Paying out nearly 70,000 dollars each year of a (presumably) pre-tax income of 175,000 doesn’t “reorder” ones life?
If paying out 40% of ones (again, pre-tax) income is considered inconsequential (despite being more than a family typically spends on food and shelter), how would such a fantastically economically resilient family cope with two children in college?
By cherry picking the ‘elite’ colleges, the author leaves out the vast majority of colleges and universities who do charge “retail” to all comers, saddling many young students with lifetimes of insurmountable (and non-dischargable) debt.
53
"Really? Paying out nearly 70,000 dollars each year of a (presumably) pre-tax income of 175,000 doesn’t “reorder” ones life?'
Leonhardt really has lost it.
2
Once again, the obsession of the New York Times with only the most elite colleges does a grave disservice to the American public since the vast majority of American colleges and universities are NOT expensive elite institutions. This list is not at all representative of the options for the millions of students who enroll in great public and private institutions that are significantly more affordable than this very small list of "top" colleges. This is very typical of NYT reporting on higher education; in this newspaper it's hard to find stories about higher ed that focus on the true mainstream. "Top" colleges are elite because they enroll most of their students from extremely wealthy families who can afford these prices, and they enroll only a tiny percentage of low income students (see their data on enrollment of Pell Grant students, and students by race). Extreme high prices reinforce the exclusivity of these institutions --- their main interest is in protecting their elitism, not necessarily in serving the lower classes of American society.
16
Agree. They are not institutions that work for the public good or provide opportunities for upward social mobility. They often feel the need to defend themselves, though. I'm guessing this piece was written by an Ivy Leaguer.
The title should be "Top Colleges Are Cheaper Than You Think (Unless Your Parents Are Rich).
4
What are you people smoking? A $175,000 year income is not enough to pay $70,000 out-of-pocket for a private university, even in lower tax states like Texas. Public universities like UT Austin are not cheap either, when you factor in the very high cost of living + transportation if you have to find a cheaper apartment outside of the bus route. We have friends with incomes of $500,000+ a year who are struggling to put three kids through college (two in private, one in public) at the same time without burdening them with a lot of debt. Who feels sorry for them? Nobody, but the numbers don't lie. College is about sticking it to the middle and (so-called) upper-middle class and letting the truly rich off the hook.
20
Clearly written -- in both senses of "clearly" -- by an Ivy League graduate.
8
This is exactly the reason why I'm a paying subscriber of The Times... Pertinent information that would b=never be covered by the other local papers in NYC....
2
Here is something cheaper: don't have kids.
3
Excellent piece. I know you look at this issue a lot, but it seems like the age of the parents isn't discussed too often. My parents went broke paying for college for my siblings and me, but they had kids when they were much younger. So they still had plenty of prime working years to build their net worth back up.
I will be 64 when my last kid would be scheduled to get out of college. If college exhausts my net worth, how will I ever make that up? Is it better for some people to just retire and get a better financial aid package?
5
Rich people have enormous wealth, and poor people none at all. The rich paying only ten times more than the poor is a tremendous bargain.
As long as we have govt-guaranteed loans, along with general financial illiteracy, colleges don't need to be held accountable to anyone. And so they keep raising the price to whatever they want, abetted by the general misguided perception that a college degree is worth any cost - it's a perception that they have very shrewdly perpetuated, abetted by articles like this. Price tags may be finally reaching the point where they've killed the goose laying the golden eggs.
7
I"m not sure what people expect--for whenever liberals, progressives, socialists and democrats are put in charge of running anything--in this case, higher education, the costs spiral disastrously out-of-control and become unaffordable.
It's not just higher education. Think also about primary education--the property taxes we pay, in many cases for mediocre results. The costs of for funding the retirement and health care benefits of teachers alone, is putting the financial health of many states in jeopardy. Liberals love to throw out "what's happening in Kansas"...often forgetting the unfunded obligations of public unions, which are causing exoduses from blue states-- NY, VT, CA--and especially IL.
And witness the disasters which have befallen some of our largest cities--all run by Democrats: Detroit, Chicago, Baltimore, Cleveland, Flint, Buffalo, Toledo.
And how can we forget our health care system--particularly ObamaCare--which has caused premiums to double since 2013?
Since Liberals do not understand how wealth is created (ALWAYS by the strength of business and industry), they do not understand the value of money--and therefore outspend all revenue streams--no matter how large. Think California.
For many, the cost of college has become no longer worth the investment. As Margaret Thatcher famously said, "The problem with socialism is that eventually you run out of other people's money"--in this case, the money of students and their parents.
4
If elsewhere in the world college-cost is usually zero or nearly zero, anything charged in USA on this would be unnecessary, and artificially inflated. This is the platform on which the progressives are running.
1
A college bill of $280,000 ($70,000 per year) would in fact "vastly reorder" the lives of many people making $175,000-$250,000 in many parts of the country.
25
The biggest farce of this all is that a dollar is not worth a dollar in every part of the state. To think that $175k (two incomes of people who earn 90k with college age kids, clearly the sign of affluence) is worth the same in the Ozarks as it is in Manhattan is ridiculous.
This article just proves what we already know: the poor get help, the rich don't need it, and the middle pay for both.
22
The conservative movement spends a fair amount of time decrying the various wealth redistribution and social engineering schemes carried out by our government. Sadly they miss what is going on at our nation's colleges. This wealth-based disparity in pricing is only the tip of the iceberg. Elite colleges openly promote the idea of engineering college admissions to forcibly structure entering classes that are poorer, less academically qualified and contain more minorities and members of the LBGT community.
Proceeding from the culture warriors' concepts of privilege and intersectionality, colleges have erected a scale of "worthiness" that assigns various advantages, including discounted tuition and admissions preferences, according to where a prospective student sits demographically. This perverse scheme actually discriminates against highly-qualified children from prosperous, in tact families because schools believe such students achieve based upon social, racial or economic privileges.
No one should object to reasonable programs that award need-based scholarships, but most Americans would be frightened to learn how universities have perverted that noble purpose. Frankly, I don't believe college administrators should have such a broad license to play God in the name of misguided social engineering.
5
I think the problem is not how much you pay, it's to be accepted by an Ivy League college.
The criteria to accept a poor or middle class student must be much harsher than to accept a rich student. And then there's the already mentioned economic stimulus to accept only rich kids. The Ivy League college then accepts only rich kids and poor geniuses.
2
So long as the US taxpayer is forced to pay the tuition of anyone, rich or poor, colleges will always inflate their tuitions. It's called the law of Supply & Demand, which socialists - whether Democrat or Republican - believe can be evaded as if it didn't exist.
Wake up to facts. So long as more people are demanding a limited amount of student-space at colleges, the higher the price will go. This is a natural law, not an arbitrary "capitalist" reaction. Read Hazlitt's "Economics in One Lesson" if you actually want to learn. Or just keep shoving your head in the sand.
5
The article states that for "roughly the country’s richest 10 percent, with an annual income of at least $175,000 and a net worth of a half-million dollars or more ... a college bill approaching $70,000 can be decidedly unpleasant, yet it doesn’t reorder their lives."
Maybe this is true if you live in a location with lower standard living costs. But I'm sorry, if you live in the opposite, one of the high SOL (usually coastal) areas, a net worth of $500k may just be a minority equity in a family home, and a lot of that $175k income may go to pay the remaining mortgage. $70k /yr for four years is almost exactly HALF such a family's net worth (and what if they have more than one child?) Declaring that this expense "doesn’t reorder their lives" is superficial and naive.
8
Every so often an article comes along that makes me laugh at how out-of-touch many NYTimes readers are.
I wonder if the commenters whining about $70k being "a third" or "a half" of their salary *after taxes* realize how tone-deaf they sound. Do they have any glimmer of an understanding of the long-term sacrifice lower-income families make to ensure their kids can afford college? I'm talking not going on vacations, always buying secondhand, and carefully saving and squirreling away anything "extra" for over a decade, so that their kids can have a chance to afford college (even with grants and loans).
Yes, American education is outrageously pricy-- but at the same time, I am not about to sympathy-cry for these commenters earning over six figures after taxes who haven't saved up for their children. You knew the cost of the game going in when you had kids.
1
My impression is that the article--and the commenters--are referring to pre-tax incomes. Having grown up in a family with eight kids (all college-educated) and limited financial resources--I understand your complaint. But, it's also true that the skyrocketing costs of both public and private institutions has become a burden to more affluent middle-class families. Eighteen years of out-of-control tuition increases has produced a very different college affordability than many folks planned for when they began their families. Not to mention the fact that many "public Ivies" have been able to become so selective that they are no longer accessible to the group of students they were initially supposed to be serving (I'm looking at YOU, UNC-CH). We need to all stick together to combat this situation instead of picking at each other across income levels, IMO.
3
They *are* middle class in many areas of the country. Disdain for people earning $125K-$200K is unattractive and reaks of resentment.
1
The top four upvoted comments all have incomes in the 6-figure range post-taxes. I know exactly what I said.
1
Financial aid means free money or LOANS, Mr. Leohnard?
I studied in Europe and never in NYC, where I saw education as a shameless tax on the professional opportunity, one getting higher every year, the same way the high drug and healthcare prices are a shameless extortion on staying alive for even a few extra months.
I believe this really affects negatively both mobility and opportunity in the US. Already many Europeans see vasts swath of USA as failed third-world slums, and the islands of good life cost more and more to live on.
3
We live in a very high cost of living area where our net income is actually below the median income for the area. These studies never seem to take the true cost of living into account. We are not poor and we are not affluent relative to our area. We are middle to lower middle class.
Our first child is going to school this fall. We have a second child who will attend college immediately after our first child finishes, making for eight consecutive years of tuition. Our expected family contribution, with two parents working full-time, from the FAFSA was $58,000. Our net income is $120,000. Add retirement savings back in and our net income is $150,000. I don't think it is unfair to want to save for retirement, especially if you started late. So 40-50% of our net income would go to our child's tuition and we would not be able to continue to save any money for our second child. Given that the elite colleges (and not all elite colleges give grants within our income range) are incredibly difficult to get into, this study is misleading as to what constitutes middle class. I don't know why colleges insist that loans are financial aid., giving the impression that the cost of attendance is affordable. They give a false sense of security to both student and parent when the loans come due.
And by the way, we do not take European vacations, live in a mansion, or buy a new car every few years.
13
Actually, things are worse than this article implies, particularly for families in the middle class who don't qualify for scholarships.
It's been a few years since I put my own children through school, but here are my take homes:
First, most families in the upper half of the middle class will not qualify for scholarships. They may qualify for loans, which are charged high interest rates, and which generally cannot be discharged in bankruptcy. This is why many students graduate with enormous debt burdens, which, as the WSJ recently reported, can exceed a million dollars.
Second, as far as I can tell, a lot of aid, is not based on economic need (which I would support), but on "diversity" I hope I'm wrong about this, it's hard to get reliable data, but I think there's truth here.
Third, and perhaps most important, the costs of college continue to increase at a rate much faster than inflation. This is unconscionable. The costs of college are leaving many students with debt that haunts them for much of their lives.
8
Sure, upwards of 70K is affordable for a family living in the Northeast or certain parts of the West Coast if:
-You don't need to save for retirement
-You don't need to save money for more than one child
-You don't want a huge mortgage and property taxes are not exorbitant.
-You do not have elder parents who are in need of assistance
14
The so called “affluent” as characterized in this article should really think twice about spending $70,000 a year to send their children to the schools listed.
If they feel they can’t afford it and don’t want to put themselves in deep debt there are much better options available.Both public instate and out of state schools and many good private colleges will offer better deals.My life experience has demonstrated that graduates of a wide variety of schools succeed in the workplace.
7
I pretty much got a full scholarship to a top-ranked, private liberal arts college (Colgate University) in upstate NY. My family had very little money so we were beyond relieved when I got the offer. Later on in my college tenure, I found out that there was a dedicated fund supported by alumni and other donors specifically to support students "who may not otherwise be able to attend." My room and board were not covered, of course, but I was able to work on campus, both as an RA and for work-study, so I made enough to cover these additional costs.
I always tell parents, when they ask, that if their kids have excellent grades and scores, they should think about applying to top-ranked private colleges that have much bigger endowments than public universities. For the most part, I think the cost aspects of the college education system in the US is mostly working--the richest of the rich are paying astronomical figures while the poor pay very little (enough that if the student works and is a RA, most costs could be covered). I'm mainly concerned about the middle and upper-middle class--though it is conceivable that if parents saved money from when their child(ren) is young, they should have enough by the time they go to college. But at the same time, Americans are notorious for their low savings.
2
Why most people who are arguing with Mr. Leonhardt here are classified as upper-middle or above, people like me? College pricing policies are set this way is because colleges see themselves as an equalization force that give opportunities to kids who are borne poor. I happen to think that this is absolutely beneficial to the next generations and America as a country. Yes. if you are well-off and hardworking and fugal, you take a hit in this system. However, you and I can afford it for a functioning democracy.
1
The article elides the actual situation of the middle class in private college attendance, as foreshadowed in the addition to the title of (Unless You're Rich). Briefly, the financial aid formulas for the middle class penalize any savings/investments, home equity, etc. above a minimum amount and do not allow for recent increases in health insurance, housing, cost-of-living differences, etc. many middle class people have to pay. The result is at these 65k to 70k colleges there are smaller and smaller numbers of students from the middle class . Put another way, the student bodies are increasingly made up of the poor and the truly rich(the 50% or so of the student body that pays full tuition). The middle classes increasingly go to state school or the lower cost of attendance private colleges that offer significant merit aid.
29
Especially for schools without enormous endowments, those who pay full price subsidize those who do not. That is the reason the going rate is $70,000.00. Posit that it costs $35,000 per student to attend school. So, effectively the rich or near rich pay for their own child and someone else's child to go to school. This is great for society except for those who work really hard and have little to show for it because they have to pay for 2 kids to go to college when one is not theirs.
3
Someone who makes $175k per year and has $500k in home equity in Ft Wayne In, WAY more able to handle $70k per year for college than someone living in San Francisco. The lack of any adjustment for regionality, or relative living expenses, creates a very uneven playing field in financial aid packages.
57
Agreed. 175k (lets say combined income) for a household in NYC would not allow you to spend 70 a year on college. Personally, I went to a SUNY and regardless of "prestige", I got a great education for a very affordable price and I still have student loans but its still less than one semester of these private schools.
2
The basic point of the column is valid, but the calculation, is a very rough tool when it comes to larger differences in the cost of living. It's a first world problem, but the calculator is not so great at differentiating between the actual ability to pay of the affluent and the very affluent.
1
The super-rich HYPS colleges offer particularly extravagant financial aid. Basically, the fame of private colleges pretty closely correlates with the size of their endowments, so the most prestigious have the most money to lavish on discounting tuition.
The author reports that Harvard, Princeton, and Stanford don't participate in the online calculator but have policies similar to that of Yale, which does. What he omits-- and is very important for this discussion-- is that both Harvard and Princeton no longer require the student's family to take out a loan as part of the financial aid package. As a result, the graduate leaves college with very little debt (some opt for non-institutional loans) giving them yet another leg up on post-college life.
8
My sister worked (now retired) for 35 years in the admissions department of one of the schools on the list in this column, and so Thanksgivings would often end up with some discussions on cost of college. She would say that colleges and universities are in an arms race for the high achiever/high income students. For example, the schools on this list might use the 10/10 rule in admissions, meaning the admissions department is highly recruiting students in the top 10% of their class top from families with household income also in the top 10%. In my case, I graduated from an excellently rated public university in 1980 and they use a 20/20 rule today. The arms race means that schools are having to pour more and more money into their respective campus infrastructures and programs to compete with their peers and maintain their rankings in order to continue to attract the best students with the ability to pay full freight. Without those select relatively few students who are both maintaining the academic rankings of the school by way of their academic background and achievement, and whose parents are dropping $69K per year per kid, the schools themselves would be in deep trouble both ranking-wise as well as financially.
But, competition for these students is driving up the cost of a college education. Its a vicious circle.
31
A lot of negative comments here. Wow! Glad these facts are getting out there! I always balk at people talking about "elite" colleges where the facts are often if a family makes less than 100K a year at schools like Dartmouth - you can attend for free (with work study as part of it). Some even have endowments to eliminate any debt upon graduation. Have a look: FAMILIES WITH INCOME BELOW $100,000
At Dartmouth, free tuition is provided for students from families with total incomes of $100,000 or less—and possessing typical assets. Loans are not required in their financial aid offer. Students and parents may decide to take additional loan to help with the calculated family contribution or additional expenses such as health insurance or a computer.
3
It's not about affording college in this article, it's about affording the so-called 'best' colleges. What Mr. Leonhardt misses is how difficult it is for someone with very low income to have access to the secondary/H.S resources that equip a person to make it into these elite colleges. I'm talking SAT/ACT prep; high schools that offer rigrorous science and math programs, as well as excellent writing programs. Those are the barriers that all-in costs won't overcome.
15
As Mr. Leonhardt notes, these numbers are averages. Colleges give more money to the students they want. As one book about financial aid said, the bottom half of the class pays for the top half.
Expensive private schools have made income inequality worse, even with generous financial aid. The payoff may be worth it for the fortunate few, but what about the vast majority of Americans who don't go to elite colleges?
1
Funny math and sad outcome! How about a country that is a meritocracy where everyone can afford college, would that work? German, French, Dutch. Belgian and other countries' engineers, scientists and others graduated from free, or virtually free universities. Some of them even took the Americans to the moon and/or currently build the best engineered products in the world! Of course they come from countries that value equal opportunity for all. That concept has long been forgotten in America where money is the most important thing and greed is the primary value.
22
None of those countries provide "free" education at the university/college level. People graduating as engineers, doctors, etc. in Germany, etc. pay very high taxes when they graduate to pay for the free education they received. The US asks for it up front, other countries make it mandatory that their checks are deducted automatically when they start working.
It's also much harder to get into college in those countries that provide "free" education. They also have a lot more vocational schools for careers that do not require a traditional four-year college experience.
7
The combined US tax, federal and local, are not greater than in Europe! But in Europe, you get free healthcare and public education and free ER services for your tax money, while in the US you get nada for your taxes and most of the taxes go toward servicing the debt and the military and the super bloated medicare (bloated with ridiculous costs, fees, and salaries compared to those in Europe and other countries). The only freebee in NYC for our big taxes is the NYPL.
4
"People graduating as engineers, doctors, etc. in Germany, etc. pay very high taxes when they graduate to pay for the free education they received."?
And they're HAPPY to do so, since they feel like their taxes are paying for worthwhile things, and these nations also have a better sense of a "social contract" (the good of society > the good of the greedy) than we do.
The Euros feel the same way about healthcare, childcare, eldercare, etc, etc
5
This is true in my case. My parents' income was around the poverty line. I went to MIT and had to pay roughly $2000 per year, which I paid for working a couple of part time jobs. I didn't apply for any outside scholarships so the cost was mostly paid for by the school. I graduated with no student loans and no debt. I do expect to paid it back by donating as an alumni, knowing this is one of the big reasons they were able to pay for my education.
2
You say it will cost a low income student only $6,000 in debt a year. That is still a lot of debt to graduate into. And does that include room and board, which for our family was the real kicker that made college unattainable? I went to Fordham University in the early 1970s and graduated with a very manageable debt burden. The same can't be said today. I took my daughter on a college tour at a state university in New Jersey. I was horrified by the growth of restaurants and "club like" gyms that were present on campus. School as entertainment. The same was true at private colleges -- they'd paid her way in terms of tuition but expect her to absorb $20,000 in annual room and board expenses. After seeing the $80,000 in debt my daughter would be roped to upon graduation, we determined that 4 year college wasn't possible. Such a shocking outcome for a bright and capable young woman. I lay the blame for the rise in college costs at the greed of college administrators. Our country's failure to provide the opportunity for college will come back and haunt us. We have completely lost our vision and sense of purpose. Millions upon millions of graduating high schoolers filter into low level retail jobs, doomed to hard bitten lives of scrimp and save for even a used car. Pretty soon there will be more people leaving the US than entering the US.
22
Thank you for saying exactly what needs to be said in any discussion about how "affordable" private colleges are for middle class families, despite the financial assistance that may be available. This is part of the larger story of an increasing wealth and opportunity gap in the US. Parents: do NOT mortgage your ability to retire because of the magical thinking presented in this article. Plenty of good education is available in public colleges.
4
This is highly useful -- the people who need it won't see it. Another thing to know is that some wealthy colleges/universities ignore the value of a family's principal residence in the asset column.
1
Instead of debating who should pay, we might ask why college costs so much to provide — and how to make it cheaper.
In the past 30 years, the cost of distributing information has gone from expensive to free. Yet the real cost of college has tripled. Why? Fixing that would mitigate the class warfare over who pays, and make everyone better off.
33
No college is self sustaining and philanthropy and government grants and loans is needed to exist. Perhaps the model is still broken.
1
There are many more poor and low income people than affluent. The cost of education is a barrier to obtaining a college degree. Consequently it affects many more people who are poor versus who are rich. Further it is not what each level pays but what is left to spend after college expenses are subtracted. For low middle or the poor it drives them to working poor or worse to poverty levels. For the very affluent it may drive them to affluent levels, not to any real struggling stages. Those well off can use equity loans to spread out the costs. This is not possible for the lower income scale with little collateral to obtain decent loans.
3
This article would have been more interesting if you had included what the actual distribution of tuition payments for current students is (and maybe even what fraction of students are only children). I would guess that only a small fraction are what the NY times defines as middle class. Also note that $6000/$50000 is 12% of the family's income, while $70000/$175000 is 40% of family income. You need to have strong self control to save enough in advance, as very few people can shell out 40% of their income for tuition in a single year.
46
Gross or Net income?
Any close look at the spread of students from various family incomes at the most selective colleges that only give need based financial aid shows a disproportionate number of very affluent versus affluent families.
While it is certainly possible, paying full tuition with a family income of $200,000 is an entirely different matter than paying full tuition with a family income of $600,000 or more. And it is the latter students who seem to comprise a disproportionately high number of the non-financial aid students at those top colleges.
24
In response to Not Drinking the Kool-Aid:
You may think it's "fair" to charge a student living in poverty the same price as a student from the 1% (or 80th%) for access to higher education at top colleges, but most Americans and colleges do not agree, thank God.
What is fundamentally unfair is a democratic government which slashes spending on higher education (while simultaneously cutting taxes for the affluent) which undermines the quality and reputation public institutions thus making the differences between great but inaccessible private schools and mediocre but affordable public schools even more stark.
45
Trust me, it does very much "reorder" our lives. In the northeast, families with a total household income of $175k are by no means affluent, especially after property taxes. And in Massachusetts, UMass - a very fine system - is $34k with room and board. Try sending two kids without "reordering" a/k/a HELOC.
61
UMass Amherst tuition and fees are $15k, meal plan $6k, dorm room $6-8k depending on size= total approximately $27-29k for in-state. How do you get $34k? And if your child did decently on state MCAS (1 Advanced and 2 Proficients), you automatically get $2k off bringing total to $25-$27 in-state.
It is the best deal around- students are able to take classes at the Five College Consortium for free which means for that price, they can take classes at Amherst, Smith, Mt Holyoke, Hampshire where tuition is $70k/yr.
80% of people attend State Colleges where affordability is completely different that this group of largely private colleges. The article is more of the bias of the Northeast Elite than the cost of college. Tuition at flagship state institutions for instate residents - UCLA - $13.2K, UT Austin - $10.1K, GA Tech 10K, University of Il - $15K. Obviously if you are a residential student, you can add another ~15-20K in room, board, & personal expenses. In many states, academic achievers are heavily discounted - FL, TX, and others. The average college debt - ~$26K - so again, hardly consistent with the article's picture.
11
Interesting investigative reporting. Top colleges are playing Robbin Hood and the affluent families are paying for Top colleges to remain relevant and viable. Wonder what some socialists think of this. Top college education has become a affordable commodity for poor colleges even without government intervention and balances of the education gap. So why does Bernie Sanders want free college education for all payed for by the tax payers like the Nordic countries? We have a generous government student loan program that allows loan payment even for getting education from a for profit school or school from where a degree will not result in a good paying job. Our top Universities are the best in the world and they remain the top Universities because of the way they manage their finances and their endowment. Everyone in the country who values college education should be prepared to pay as much as they can afford to borrow or mortgage. It is just as valuable as having a dream house. Anything supposedly valuable that is free is not worth anything unless it is earned.
2
With a different selection of colleges, very different results would be obtained. Had Wake Forest and Washington University (St. Louis) been used one would see less generous support.
6
Washington University does not have need-blind admissions. In other words, if you are likely to need financial aid, you won't be turned down for aid. You will be rejected outright. Unless you are a member of a preferred group.
7
The NYT goes out of its way to defend the poor and other unfortunate persons, but it just assumes it should judge people based on a snapshot of their income or savings. It assumes colleges should have the right to charge different prices to its students. It assumes this arbitrary system is fair.
The college financial aid system is fundamentally unfair. Colleges cannot know a family's ability to pay sticker price. They cannot know lifelong income or future liabilities. They cannot know whether the family has a safe pension or good healthcare plan. Their system cheats many middle income persons from a fair education.
And even if they could know a family's true assets and liabilities, they should not be charging different prices. Our democratic government already enforces a tax and social safety net system that redistributes wealth. Schools should not be in the same business.
61
I'm glad someone is going "out of its way to defend the poor and other unfortunate persons" - after all isn't this what distinguished humans from other animals and has made us so successful? College is about education, and living with people from different strata and backgrounds is perhaps its most important aspect.
2
I could not possibly disagree more. Charging the same price to every student would be unfair. Middle and lower income families simply would not be able to afford a school like Yale. It would be entirely filled with the wealthy and would perpetuate class divisions. Like the other schools on this list, they chose to make it more affordable for lower income families. As a society we should be striving to educate the best and brightest students irrespective of their parents' wealth.
these articles annoy me as a person who put through 2 girls to a Midwest Jesuit University who have both done well. The reason is that every Ivy League school is profiled with their multi century 10 or 20 billion dollar endowment..of COURSE they can afford to help the academically gifted. Every article in Forbes, Kiplingers etc points the out as a revelation. I worked with our University and crafted a plan where both went for maybe 10% more than going to UConn(my alma mater). This can be done by anyone and for those who say "go to state U it is cheap" remember the unfunded liability for pensions and bonding to be paid is now in the trillions. Someone is paying for it or will pay for it.
3
It's bizarre that the United States provides private universities the power to redistribute income and wealth, but not the government.
The government represents the people, not private universities. It's the government which should be deciding how income and wealth are redistributed.
College cost is just another colossal example of a democracy deficit in America.
16
Affluent = $186,000 income, $300,000 home equity, $75,000 cash, and $375,000 investments.
The good news is that I can tell my friends and relatives I am affluent.
The bad news I live in a small house with 15K taxes, drive a couple of modest cars, and am expected to fork out over 60K annually for tuition, room and board, and books.
91
Erik said it perfectly... upper middle class families asked to pay the full, nearly 300,000 cost of a child's undergraduate education. We have 3 children, live in a small home, drive old cars and pay high taxes.
39
If you live in Westchester (or Manhattan like I do) and own your home, chances are your taxes also will jump this year as your property tax and mortgage deductions are now capped. Yes, there are many truly wealthy people in these places. But there are also many people living very middle class lives who are described as rich because there is no indexing for cost of living. A $500,000 home where I grew up in PA is lovely. A $500,000 home in Manhattan is called a studio.
8
An interesting question would be the acceptance rates of these different income classes.
45
These subsidies don't happen without the generosity of alumni. Pay it forward.
28
Thank you for this article. It has been difficult to convince people that colleges with large endowments have sliding scales of payment (communist!). It is even harder to convince parents that a state school out of state, a small poorly-endowed private school, a small Bible college or a for profit trade school will be much more expensive than an in-state state school or Ivy type.
13
I can confirm. One of my kids attended an ivy and we didn't pay much more than another who attended a public in-state school. We were middle class at the time.
24
Go big (ivy) or stay home (good instate public college).
1
For students who hope to learn something for a real job, there might be little difference between ivy and first- or even second-tier state schools.
I'm confused by these categories. Most of us don't fit into them so neatly, especially as regards investments. Determinations of a family's wealth are based on one year snapshots, and do not take into account the years of struggle that might have preceded that year. They don't take into account cost of living in different parts of the country or house values based on location. According to the estimates my family received, we were able to spend over half our annual take home pay on tuition. We were in the lower range of "upper middle class" and had only been in that position a few years.
58
A more apt headline for this article might be "Top Colleges Are Cheaper Than You Think (Unless You're Vaguely Comfortable)." $186K per year is not affluent if you are left with $135K (ater FICA, federal income tax and state and local income taxes)and then expected to shell out more than half of it (nearly $70K) every year to pay for two children's education over the next eight years. Two public school teachers in expensive metro areas would fall into this category. Are school teachers affluent?
With few exceptions, the schools on this chart are charging this family the same rate as the very rich. Notice the overlap of the dots representing the 'affluent' and the 'very affluent'. They are paying the same, full price. And so are the top five percent who do not appear on the chart.
This gouging of the barely upper middle class is why flagship state universities are overflowing with students from this economic strata. The contemporary rich, private university financial aid system is working for the truly rich who don't need it and for the lower to barely middle income families who end up paying less than they would have at a public instituion. It does not work so well for those who are slightly higher up the economic scale.
173
This is exactly true. The children of upper middle class families do not have the option of going to private schools unless the families make (very) unwise financial decisions to send them. The poor and the very affluent have the most doors open to them.
9
Very well said. My own daughter was recently accepted to a number of elite schools. She was excited and hopeful. Ultimately we were informed we'd need to pay the entire 300,000 for her undergraduate degree. Her financial aide package consisted of unsubsidized student; the 'invest in yourself' option, which I found slightly disgusting.
She's attended a flagship state university and will graduate with no debt.
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I mean -- I hear you to a degree, but your example above assumes no savings over the past 21 years towards college expenses for the hypothetical students.
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When our first child attended an expensive university 10 years ago, my husband and I were both govt employees and the cost was ~$50K. We got no financial aid. When our second child went to a similarly expensive university two years later, we assumed that having two kids in school would make a huge difference in our aid application. It did not; we did not qualify for aid. We were expected to be able to pay more than half of our income in college costs.
This system is broken, not only for the expectation that people like us should pay these excessive bills and subsidize the majority of students. The cost of college has been rising faster than the rate of inflation despite the heavy reliance of most schools on grossly underpaid adjunct profs and grad students to do their core function - teach. This whole system needs to be investigated and reformed.
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All Academic, is the name of the new curriculum, new school. I have been working-on its development for many years now. Corporations and Higher Education, at the Top Level/World Level, are involved. Example: A successful Student should finish All Academic school/university, with a Brilliant IQ Score... or at least has a high probability. Some jobs require this IQ Score. More people in the population need to achieve it.
Exactly, and it's just another piece of the puzzle of anger and destructive voting out there: Denying upwards social mobility, or at least a realistic path thereto, to average hard working children of lower middle class and below families. People will put up with a lot of struggle if they know their children will have a better future for it, but the American dream today is a mirage.
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When you say that a family making $175,000 a year can afford a $70,000 yearly college bill, I wonder about your math. That's more than a third of their income. I think this is another case where the middle class must bear the highest financial burden.
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Yes, and $70k is actually more than half that family’s after-tax income. Basically forces debt onto the middle class. It’s for a good cause, but would be better just to bring down the actual underlying cost of college.
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I strongly agree with this comment. It's crazy to imagine that $70K would not take a serious bite out of an income of $175K with a net worth of $500K, even if that "net worth" definition excludes retirement savings. It also glosses over the issue of future means and demands; many people achieve this level of affluence precisely because they themselves have deferred childbearing early on in life. By waiting to have children until your mid-thirties, you've established a more financially secure early environment for them. But, you end up facing college bills at an age when you're also facing retirement. That $70K annual bill, when you're 60 years old, hurts a whole lot more than when you're 40 ... because you won't have two more decades of your highest earning years, to recoup the loss. Spending that kind of money in your 60's means you'll never get it back, and borrowing to finance college is even more unrealistic at that age.
I don't begrudge a system that allows those of us with financial means to help subsidize those with lesser means, but it's pretty dismissive to suggest that $$175K, isn't disruptive.
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I don't think it's strange math at all. Families are expected to save for college before their kid goes to college--that's why a family making $175K a year should be able to afford an annual $70K bill:
$70,000 x 4 years (let's assume the student graduates on time) = $280,000
$175,000 x 18 years (let's assume that the student is a typical child and they're ~18 when they graduate high school and go to college) = $3,150,000
$280,000 / $3,150,000 = 8.9% of what the parents have made over the past 18 years--and that's if they stored this money under their mattress, didn't invest it in a 529 or some other plan.
I agree that depending on where the family lives, making $175K a year might be a lot or it might be very little. And of course, they might not be making $175K a year every year--I'm assuming they started out lower and got raises... But roughly, a family needs to save about 9%. That's not a crazy amount. It may seem like a crazy amount for American households because we, as a country, are notorious for having almost no savings.
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I would be interested to hear how retirement savings are treated in determining "real price tags". I will have a college student in my early 60's. If I don't have a lot of accumulated assets and savings by then, I'm in trouble. Do I get penalized for saving for retirement? Also, income brackets in a vacuum, without reference to cost of living/region, are effectively meaningless. Rich in Montana is barely getting by in New York.
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It was easy to miss in the article but they did point out that "Modified Net Worth" generally excludes retirement savings from the financial calculation. At least one of the schools my son was applying to in 2008 asked for the model and year of the family cars. And all of them gave an opportunity to explain any special financial burdens such as high medical bills or a special needs child in the family.
I don't believe they made clear whether the overall "income" they used for analysis is your total income or your "taxable" income. At this point I have wiped THAT detailed input item for the FAFSA from my memory!
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More of that endless whining from NYC about "oh oh oh we should be treated differently because we CHOOSE to live in an expensive area
How about Just Move - move to where housing costs less.
You could try my county - beautiful here although the 2,000,000 tourists in the summer do get under foot.
Median priced house = $425000 (no granite countertops, just formica etc)
But then you need a car - actually TWO cars so you each have one to get to work. No public transportation here - you drive EVERYWHERE & the large grocery store is a 40 mile round trip (Ditto pretty much any shopping for necessities is that 40 mile round trip)
And in NYC you do NOT have to have a car so this a huge new cost to make housing work here
Car payment - $650 per care per month
Car insurance (most expensive in the US) - about $6000 per year PER CAR
Gasoline - figure $200 per month per car
Maintenance - $2000 per year per car
Now you are spending $3033 a month to have 2 cars.
So $2500 in mortgage, taxes & insurance for the $425K house + $3033 for 2 cars = $5533 per month in housing & transportation
$5533 per month to live here. Wanna bet you are not spending even close to that in NYC?
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As the article states, most colleges do not count retirement savings in their calculations. And most private colleges, while they do their own evaluations and will ask for more info, begin with the FAFSA. The FAFSA takes your age into account.
If you live in an expensive area, your home equity may be the bigger problem. Some colleges count a portion of home equity as available to pay for college, assuming that you will take out a home equity loan. Speak with a financial planner. You might be making choices now about paying down your mortgage vs. fully funding your retirement. It might make more sense to max out every possible retirement vehicle before paying down your mortgage if it looks like you will be eligible for aid. Also, you want to be cash-poor when kiddo is a rising senior, because that's the tax year you will be using on the FAFSA. Planning to buy kiddo a car or computer for college? Do it then so your cash is depleted.
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As a middle class family we paid "only" $35,000 dollars tuition PER YEAR for our son's university at a flagship state school ten years ago. Our daughter just graduated from a highly competitive Dutch university for a TOTAL of $31,000 -- and that was the price for non EU students.
It continues to be obscene how unaffordable and out of reach eductation is in the US. As Americans we need to start thinking about what we actually value. Based on our choices, it sure looks like we don't value children, education, health or families.
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It reflects different national priorities.
In the 60s, a college student could easily work their way through school.
Now, apparently, America can't afford that. The money is needed for other things.
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A few years ago I visited Iceland. The young man at the hotel front desk identified himself as an American, so I asked why he was there. He was working a few hours a week while in medical school, and the tuition in Iceland was $500/year.
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True..in the past we valued higher education. I came from a poor family but received a free education in one of New York City's many free and excellent ones.
Even middle-class students attended in large numbers, but back then as a much poorer nation we had different values, such as affordable college and universities across the land.
Today, for example, the once proud midwest universities are being starved out of existence.
As an elderly professor, I know whereof I speak. I wonder how many individual professors are speaking up.
Ther e
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Interesting data regarding income but really focus on the savings for defining the categories. The take home message is that if you live frugally, saving money even if your income is in the middle-class range, you will be penalized in college aid. Long ago folks with similar but higher income than us told us they weren't saving at all for college and lo and behold, they were right as they get rewarded with aid. Spend what you would have 'saved' on private school, tutors, enrichment activities, new cars, eating out and the like and you too will be rewarded with college aid and not be suckers for paying full price tuition.
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I hate to fully endorse this, but you might be right. At least, go ahead and invest in your kids pre-college. You will have to earn little enough to qualify for aid. How much that is may surprise you if you are a pair of teachers or government employees as other commenters here have noted.
How does 529 saving affect these calculations?
As a professor with over 20 years experience at both public and private, elite, colleges and universities, this article, which seems to be encouraging people to get into a private college, is nauseating. Why are private colleges considered the best? Because they were all founded on, and to a certain degree continue to operate on, the basis of exclusion. Not excluding the academically unprepared, but excluding the socioeconomically and racially different. Parents want to send their kids someplace like the gated community they came from.
Why are we the only first-world country where higher education is privatized, where federal monies flow to places like Harvard, Princeton, and all their little followers? Support public colleges and universities, make them cheap or free.
Also, its shocking that the writer would make such an ignorant statement about the lower graduation rates and public (and disgusting that he lumped them together with for-profit institutions.) The picture is much more complicated and nuanced than this.
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So you prefer the only admission criteria to be "are they breathing?
Bottom line is the socioeconomic difference DO Matter. They matter in exposure to ideas and the world. They matter in terms of social skills
ANd they matter HUGELY in terms of "networking" (aka who do you know) which is huge necessity for having a career. The poor students do not bring anything to the table for their better off classmates. Their family does not have contacts - at least not that matter in careers needing college. They only 'take' in terms of the network -they do not and can not 'give'
It matters HUGELY if you can get into a highly selective school. A study of earnings 10 years after graduating showed
"the top decile of earners from all schools had a median salary of $68,000. But the top decile from the 10 highest-earning colleges raked in $220,000—make that $250,000 for No. 1, Harvard—and the top decile at the next 30 colleges took home $157,000. (Not surprisingly, the top 10 had an average acceptance rate of 9 percent, and the next 30 were at 19 percent.)"
The more selective the school- the higher the earnings in life.
https://www.theatlantic.com/magazine/archive/2018/06/the-birth-of-a-new-...
The greater the selectivity of the school, the greater the income of its graduates.
PS you will never ever persuade me that 5th tier schools like Western MI University are even close to the academic and intellectual rigor of schools in the top 2% of selectivity.
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First, while you are correct that "we the only first-world country where higher education is privatized", the US is also considered to have the best higher education system in the world. If you look at any ranking of top global colleges, it's dominated by American schools. Maybe there's a connection between the high degree of choice in the US (including private schools) and the high ranking. On the other hand, per PISA, we generally have a pretty low ranking in K-12 schools compared to other countries. Maybe the lack of choice is likewise predictive of poor quality ?
Last, let me anticipate your vehement rejection of what makes a school the best - "on the basis of exclusion". Sure, there's an element of perceived scarcity and pedigree that may not correlation with educational quality. But regardless of the reason, there is a benefit to a school's reputation.
When my daughter was applying to colleges, she had two friends with similar academic profiles going through the same process. One became wait listed at Columbia and eventually got accepted. The other (who wanted to major in math) got accepted to NYU. But it would have cost her parents dearly. Instead, her parents bribed her to go to the more affordable state school - Rutgers. But it turned out to be myopic. Though Rutgers was cheaper, fewer of its graduates found lucrative careers than the equivalent students at NYU. Right or wrong, name recognition means something.
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you need to read "where you go is not who you'll be" by frank bruni.
What costs the most about college is being able to live and eat while you devote your time, energy, and attention to studying. It's not just about tuition. Most of my student loan money goes to paying for my apartment and food and all the other little things that are required for minimal living. And, it's still not enough. The days when you could work your way through college are gone--please stop saying this. Elite universities are located in places where the cost of living is outrageous. So, even if it's cheaper for people from the lower or middle class to attend a top college, the cost of living likely remains out of the reach for most Americans and still in the reach of kids whose parents pay for their housing, food, car and the other things that help build elite, cultural capital.
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If you grew up in NYC and still live at home, you can commute to Queens College for about $7300 a YEAR including books. That is achievable on a retail salary if one plans out a strategy to work for a while, pay for a semester, attend school and then repeat this pay-as-you-go process. It may take an extra year or two to graduate but it can be done and you'll come out with no debt at the end. I know people who have done just that. Having parents who contribute makes it an even sweeter deal. So no, those days are not gone.
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Can we please stop talking about income brackets in America as if cost of living is the same everywhere? A family making $75,000 in NYC spending upwards of $3000 a month in rent does not have the same available cash as a family making $75,000 in Portland, Maine spending $1800 a month on rent. "Affordability" is a relative concept and should be looked at as such.
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