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> What exactly does "net tuition" exclude? Financial aid comes in many forms - grants, loans (multiple kinds), work study. Excluding some of these might be fair

by bhupy 6y ago

> What exactly does "net tuition" exclude? Financial aid comes in many forms - grants, loans (multiple kinds), work study. Excluding some of these might be fair. Excluding others would be chicanery. The source explains it better than I can: The amount that students and their families have to pay for enrollment, “net price,” is generally much less than the published price (“sticker price”), for two primary reasons. First, students often receive grant aid from federal and state government programs. The Pell grant program allocates up to $6,345 per year to students enrolled fulltime in postsecondary education. Students from the poorest families receive that full amount, and the award size declines as family income and wealth increase. Second, private colleges and universities sometimes give discounts to students based on their perceived ability to pay. This practice has the benefit of allowing students to enroll who otherwise would not be able to afford to do so. But it can also be viewed more pessimistically as price discrimination, which is generally perceived as a predatory behavior when exercised by for-profit companies. Essentially, colleges charge students the highest price that they would individually be willing to pay, up to the sticker price, in order to maximize revenue. > Want to guess how tuition has increased at Texas A&M or Ohio State vs. a legion of tiny schools that barely achieve accreditation? The source includes that information as well: > students at public four-year colleges have seen their net costs go up significantly because of increases in tuition that were not offset to the same extent by aid and scholarships. The average annual net cost at a four-year public college has grown by almost 81% beyond inflation over the past decade, to $3,870. On its own, that looks really bad, but once you account for the change in ROI, the net outcome looks a little different. The upfront cost is higher today, but the long run benefit is even higher.

notacoward 6y ago
> The source explains it better than I can That doesn't completely answer the question. It addresses discounts and grants, but there's more to it than that. > On its own, that looks really bad Yes, it does, and that's still no accounting for differences in size. Even state schools vary widely. Eastern Michigan University is not University of Michigan by a long shot. > once you account for the change in ROI That matters little to someone trying to figure out how they're going to afford a house while they're still paying off student loans. It mostly kicks in much later, and money later is not the same as money earlier. If you really want to consider that increased ROI, you also have to consider how it's offset by lost opportunities for saving and compounding interest because people are buried when they first get out of school. Also, if college is no less affordable, why are they so buried? Graduating with more student-loan debt than income was practically unthinkable when I went to school. It's commonplace now. Why? This whole empathy-lacking "it's no harder than it used to be" argument just doesn't pass the smell test.
- bhupy 6y ago
  > That doesn't completely answer the question. It addresses discounts and grants, but there's more to it than that. Discounts are huge. "Discounts" is just another way of saying that the university charges different prices based on how rich you are, and the sticker price is basically a fiction. It's essentially total price discrimination, except we only learn the true prices after we reveal our income level. It's certainly a problem worth solving. > Yes, it does, and that's still no accounting for differences in size. Even state schools vary widely. Eastern Michigan University is not University of Michigan by a long shot. You'd be surprised, the difference isn't as wide as you think it is. The Wall Street Journal put together a tool to let you compare the median debt + earnings per college and degree -> https://www.wsj.com/articles/which-college-graduates-make-the-most-11574267424 https://www.wsj.com/articles/which-college-graduates-make-th... Eastern Michigan University + Engineering Median debt: $12,643 Median earnings: $48,900 University of Michigan + Mechanical Engineering Median debt: $17,525 Median earnings: $74,200 In both instances, earnings exceed debt. Also keep in mind, those numbers are total debt, not tuition. You can play around with the tool and select different universities and different majors. It's behind a paywall, but if you don't have access, I can pull the numbers for whichever university you'd like to compare. > That matters little to someone trying to figure out how they're going to afford a house while they're still paying off student loans. No, the implication is that the salary for college graduates is almost always above the median wage. The calculus is whether the wage increase is higher or lower than the monthly cost to pay off the degree. If it's lower, then the degree is not worth it. > Also, if college is no less affordable, why are they so buried? Graduating with more student-loan debt than income was practically unthinkable when I went to school. It's commonplace now. Why? Because it's one thing to say that student loan debt is commonplace, and another thing entirely to suggest that unpayable student-loan debt is commonplace. Consider that almost 100% of homeowners have mortgages (and hence are in debt), but most of them pay them off, and end up with an asset at the end of it. College degrees are (for the most part) exactly like that. The median student loan debt is $17,000 (https://www.forbes.com/sites/zackfriedman/2020/02/03/student-loan-debt-statistics/ https://www.forbes.com/sites/zackfriedman/2020/02/03/student...) — but paying that off is like paying off a car loan for a Toyota Corolla, only college degrees aren't a depreciating asset (depending on the major). > This whole empathy-lacking "it's no harder than it used to be" argument just doesn't pass the smell test. I wouldn't ascribe intent, but data like this is important to understand what the reality is for the majority of people. While there absolutely exists adverse situations where someone is riddled with hundreds of thousands of dollars in student debt with no employable skill to help pay that off, it doesn't represent the majority of college graduates. The news also has a bias for reporting on the most exceptional cases, you never really hear about the successes. Importantly, this doesn't mean that we shouldn't help those that are struggling. It just means that we don't need to upend the entire system to do so.

by bhupy 6y ago

notacoward 6y ago

> The source explains it better than I can That doesn't completely answer the question. It addresses discounts and grants, but there's more to it than that. > On its own, that looks really bad Yes, it does, and that's still no accounting for differences in size. Even state schools vary widely. Eastern Michigan University is not University of Michigan by a long shot. > once you account for the change in ROI That matters little to someone trying to figure out how they're going to afford a house while they're still paying off student loans. It mostly kicks in much later, and money later is not the same as money earlier. If you really want to consider that increased ROI, you also have to consider how it's offset by lost opportunities for saving and compounding interest because people are buried when they first get out of school. Also, if college is no less affordable, why are they so buried? Graduating with more student-loan debt than income was practically unthinkable when I went to school. It's commonplace now. Why? This whole empathy-lacking "it's no harder than it used to be" argument just doesn't pass the smell test.

bhupy 6y ago
> That doesn't completely answer the question. It addresses discounts and grants, but there's more to it than that. Discounts are huge. "Discounts" is just another way of saying that the university charges different prices based on how rich you are, and the sticker price is basically a fiction. It's essentially total price discrimination, except we only learn the true prices after we reveal our income level. It's certainly a problem worth solving. > Yes, it does, and that's still no accounting for differences in size. Even state schools vary widely. Eastern Michigan University is not University of Michigan by a long shot. You'd be surprised, the difference isn't as wide as you think it is. The Wall Street Journal put together a tool to let you compare the median debt + earnings per college and degree -> https://www.wsj.com/articles/which-college-graduates-make-the-most-11574267424 https://www.wsj.com/articles/which-college-graduates-make-th... Eastern Michigan University + Engineering Median debt: $12,643 Median earnings: $48,900 University of Michigan + Mechanical Engineering Median debt: $17,525 Median earnings: $74,200 In both instances, earnings exceed debt. Also keep in mind, those numbers are total debt, not tuition. You can play around with the tool and select different universities and different majors. It's behind a paywall, but if you don't have access, I can pull the numbers for whichever university you'd like to compare. > That matters little to someone trying to figure out how they're going to afford a house while they're still paying off student loans. No, the implication is that the salary for college graduates is almost always above the median wage. The calculus is whether the wage increase is higher or lower than the monthly cost to pay off the degree. If it's lower, then the degree is not worth it. > Also, if college is no less affordable, why are they so buried? Graduating with more student-loan debt than income was practically unthinkable when I went to school. It's commonplace now. Why? Because it's one thing to say that student loan debt is commonplace, and another thing entirely to suggest that unpayable student-loan debt is commonplace. Consider that almost 100% of homeowners have mortgages (and hence are in debt), but most of them pay them off, and end up with an asset at the end of it. College degrees are (for the most part) exactly like that. The median student loan debt is $17,000 (https://www.forbes.com/sites/zackfriedman/2020/02/03/student-loan-debt-statistics/ https://www.forbes.com/sites/zackfriedman/2020/02/03/student...) — but paying that off is like paying off a car loan for a Toyota Corolla, only college degrees aren't a depreciating asset (depending on the major). > This whole empathy-lacking "it's no harder than it used to be" argument just doesn't pass the smell test. I wouldn't ascribe intent, but data like this is important to understand what the reality is for the majority of people. While there absolutely exists adverse situations where someone is riddled with hundreds of thousands of dollars in student debt with no employable skill to help pay that off, it doesn't represent the majority of college graduates. The news also has a bias for reporting on the most exceptional cases, you never really hear about the successes. Importantly, this doesn't mean that we shouldn't help those that are struggling. It just means that we don't need to upend the entire system to do so.