Recent news from the college search / admissions / finance front, all of it touching on money matters and some of it, all about money matters…
1. Two academicians write in the Wall Street Journal about how parents should Get Smart About College, including recognizing their own biases. This is definitely worth reading and they make a number of good points. Unfortunately, their arguments about the ability of graduates to pay off debt need to be stacked up against another report from the WSJ this week (see #2 below).
The way people think about debt, for instance, may leave them borrowing too little, rather than the right amount. Or it could lead them to pick colleges where they have a worse chance of graduating. …
… If parents understand more about the decision biases they share with the rest of the human race, they may be able to plan and save more effectively and to help their children make more constructive choices. They should actively question all of their assumptions and be open to planning, choosing and supporting their children even in ways that don’t immediately feel “right”—like taking on more debt for a higher-tier school.
2. Thanks to a tweet from Robert Bruner, Dean of the UVa Darden School of Business, here is a chart from the WSJ‘s Real Time Economics, showing new data from the Census Bureau and the average wages growth over the past 10 years. :
3. What does that Census Bureau data mean for college grads? Jeffrey Selingo writes for The Chronicle of Higher Education about ‘the lost decade of wages.’ Yes, it confirms that a college degree can provide ‘lifetime economic benefits,’ but the article also discusses the anger of college graduates who cannot find jobs. See this about college costs relative to household income:
Perhaps the number that should be most disturbing to colleges in the Census report is that the income of the typical American family has dropped for the third year in a row and is now roughly where it was in 1996, when adjusted for inflation. Meanwhile, the inflation-adjusted price of a public four-year colleges is about 1.8 times what it was in 1996.
Rising family wealth during the 2000s, helped greatly by inflated home prices, allowed colleges to continue to pump up their prices. The census numbers and the nonstop bad news on housing show those days are over. Add to that the fact that there are likely to be substantial cuts in federal student aid in the name of deficit reduction in the coming years.
And, for a glimpse of how aware college board members might be of the problem:
A higher-education admissions and marketing consultant who specializes in the private-college sector told me recently that his firm does many retreats for trustees and senior college leaders that in part highlight the average household income for the state where the college is located.
“The wealthy board members are very surprised and cabinets [of college leaders] are silently reflective and nod in agreement,” he told me. He always asks the college officials if they could afford their prices if they didn’t get the tuition remission. “Almost always they say no.”
4. Meanwhile, has anyone been following the discussion of forgiving student debt as a way of boosting the economy? I haven’t, simply because of lack of time to pay attention to every darn thing. This from the WSJ‘s Idea Market crossed my desk today: Forgiving Student Loans: Worst Stimulus Idea Ever? That’s a very short piece, responding to a Freakonomics contributor’s assertion that it’s a terrible idea. It will only take a moment to read the post; further enlightenment on the impact of student debt on the lives of college grads, however, can be found by scanning the comments in response (50 at last count).
5. Finally, to quote a friend: “File this one under, Duh!” Inside Higher Education just released their study of admissions practices and found that universities are more focused on finding students who can pay the full, non-discounted tuition and fees. Here’s the article, and here are a couple of paragraphs:
The pressure to add to tuition revenue also shows up in very high proportions of admissions directors who see recruiting more out-of-state students as an important admissions strategy (53 percent at public doctoral institutions and master’s institutions). Likewise, more than 30 percent of admissions directors across all four-year institutions said that recruiting more international students was an important admissions strategy. While some state universities have had success over the years at attracting out-of-state students, many experts warn that this isn’t a strategy that can be carried out instantly — and that not every state university is seen by 18-year-olds nationwide as a desirable location.
Lucido says it is important for colleges to be honest about their motivations for going for more out-of-state or international students. In many cases, he says, “this isn’t about globalization or increased educational diversity. They need the money.” He praises the University of California System (a system that could have tremendous diversity within its own state) for being forthright about this motive, but says that many others are not. (Very few colleges, even among the minority of institutions that meet the full need of admitted applicants, extend that policy to international students, so recruiting outside the United States frequently focuses on those with the means to pay.)
We looked at this same issue with Virginia public universities here, when one legislator argued our state schools should admit more in-state students at the same time the legislation continues to cut public funding.
6. Finally, finally, in breaking news: UVa announced today the University will offer a four year program providing students the opportunity to earn a bachelor’s degree in three years and a master’s degree in the fourth. Here’s the news blurb. Here’s the UVa website on 3+1. The money connection: a traditional five year program for the cost of four. Of course, it also helps keep students on campus for four years instead of three or three and a half, after entering with a number of college credits from high school. Win/win?
Any thoughts? What have you been reading? As always, your comments are welcome…
- You: Universities Seeking Out Students of Means (nytimes.com)
- The Dumbing of America: Effects of the Economy on American Post Secondary Education Practices (biojobblog.com)