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The top colleges have very complicated pricing schemes and are basically free to middle and lower income students, for example a student to MIT only pays if the

by sct202 6y ago

The top colleges have very complicated pricing schemes and are basically free to middle and lower income students, for example a student to MIT only pays if their family earns more than $90k a year which is above the median household income of $68k.

a-posteriori 6y ago
When I was there, less than 8% of the students were paying full tuition (of which a good chunk were international students). At a certain point, the colleges start to look like perfectly price discriminating monopolists: rather than charging the highest price to each customer, they set a maximum price ceiling and then subsidize the gap to the customer's marginal ability to pay.
- fossuser 6y ago
  The price is so high that even if you’re not paying full price, it’s often still extremely expensive.
- borski 6y ago
  iirc, it was even lower when I went. And this is probably the most common mistake I see made about MIT, etc.; the lack of acknowledgment that the financial aid within top schools runs deep, which simply isn’t as true for smaller or less popular schools. Going to a “top tier” school can, depending on your financial situation, actually cost you roughly what a state school would. You can argue there are too many hoops to jump through, or anything else, but that’s a different argument.
  - throwaway0a5e 6y ago
    > the lack of acknowledgment that the financial aid within top schools runs deep, I think you're confusing depth and breadth. It's like the Harbor Freight coupon. Everyone gets 20% off with a few exclusions. But the people paying less than 80% (to continue the Harbor Freight metaphor) are few and far between.
    - borski 6y ago
      No, I understand precisely what you're trying to say. Based on my (admittedly anecdotal) experience applying to colleges and working (however briefly) in Financial Aid at MIT, it was not a 20% blanket by any stretch; each case was treated individually and there was an explicit focus on ensuring students were not saddled with insane amounts of debt. There were exceptions, particularly for wealthy folks and people who were 'on the line' income-wise, but the majority got significant financial aid. Just to give you an idea, from MIT's stats[1]: * Average need-based MIT scholarship: $47,593 * Students awarded a need-based MIT scholarship: 59% * Students attending tuition-free: 31% * Class of 2019 graduates with no student loan debt: 76% * Average student loan debt for those who borrowed: $23,226 The trope that the expensive schools are the cause of the massive student loan debt problem is just that; a trope. When only 24% of the class graduates with any debt at all, I'm not convinced MIT (and similar) are the problem. This is largely due to MIT and similar schools having massive endowments from which they can draw for Financial Aid; there are cheaper schools, certainly, but they have coffers that are less deep (referring to private schools), meaning students end up having to take more debt. [1] https://web.mit.edu/facts/tuition.html https://web.mit.edu/facts/tuition.html
      - grepthisab 6y ago
        You kind of buried the lede in your last paragraph: This is largely due to MIT and similar schools having massive endowments from which they can draw for Financial Aid; there are cheaper schools, certainly, but they have coffers that are less deep (referring to private schools), meaning students end up having to take more debt. It is reality that expensive schools cause the massive student loan debt problem, but expensiveness isn't totally buried in sticker price but total cost of attendance. Schools like HYSM don't saddle attendees with as much debt despite their high sticker price perhaps because of endowments.
    - NovemberWhiskey 6y ago
      No; that's completely wrong. For example, the median value of scholarships for Yale's class of 2023 with family incomes under $65,000 was $76,925. https://admissions.yale.edu/affordability-details https://admissions.yale.edu/affordability-details
throwaway0a5e 6y ago
You need to look at this from the perspective of someone who has little to no familial safety net and cannot rely on family resources to help them out when things get tough. Boston area schools being "basically free on paper" to middle income families is a reflection of the fact that a student from a ~100k income family has better options for getting ahead in the world than attending these institutions at any cost but these institutions would lose legitimacy without "economic diversity" tokens so they have to reduce the price. Going to Harvard (or similar) if you're not from the kind of people who go to Harvard is a high risk, high reward gamble with years of your life. These schools have to reduce the potential downside in order to get the quality of candidates they want to get from the demographics they want to get them from (i.e. they want to be able to pick the very best people from the "can't afford to attend" demographic). Also it's good PR. If you're the son of a plumber and your options are going to MIT for CS, or UMaine's "we match your local in-state tuition" deal paired with their crappy CS program the Maine one actually looks attractive because you're going to be surrounded by people a heck of a lot more like you (on a life experiences level), you're not gonna be bottom of your class and you won't be running the Boston rat race when it comes to housing, a part time job, commuting, and all the other "life" stuff". If you're the kind of high-achieving individual who goes to Harvard from a middle class background you're all but guaranteed to live more comfortably than your parents and retire comfortably regardless of the choice you make. Rolling a degree from a lesser state school into a stable job at BigCo isn't something you're worried about. The networking value add from Harvard or MIT isn't as much of a value add because you have no frame of reference for it and won't be making the kinds of life choices where it can be most helpful anyway (remember, no safety net, you're gonna be the one that builds it). So if you're gonna "win" no matter what you choose why add the additional risk of Harvard, MIT or some other program you could wash out of?
andrewmcwatters 6y ago
I always think about how absurd these pricing models are. Ah yes, if you're living lavishly at $90k per annum you, too, earn the privilege of paying for your education. I suppose at some point someone has to pay. But you're not rich at $90k. And I just don't see many of those households earning between $90-250k a year wanting to pay for such a privilege. From my perspective, you've got to be either very rich, or very poor going into those schools, because there's no reasonable room for those in-between unless you're taking out significant life-changing debt to do so. And after it's all said and done, you're overwhelmingly statistically unlikely to be making so much that the debt didn't even matter.
- albntomat0 6y ago
  As I understand it, financial aid isn't all or nothing.

by sct202 6y ago

a-posteriori 6y ago

When I was there, less than 8% of the students were paying full tuition (of which a good chunk were international students). At a certain point, the colleges start to look like perfectly price discriminating monopolists: rather than charging the highest price to each customer, they set a maximum price ceiling and then subsidize the gap to the customer's marginal ability to pay.

fossuser 6y ago
The price is so high that even if you’re not paying full price, it’s often still extremely expensive.
borski 6y ago
iirc, it was even lower when I went. And this is probably the most common mistake I see made about MIT, etc.; the lack of acknowledgment that the financial aid within top schools runs deep, which simply isn’t as true for smaller or less popular schools. Going to a “top tier” school can, depending on your financial situation, actually cost you roughly what a state school would. You can argue there are too many hoops to jump through, or anything else, but that’s a different argument.
- throwaway0a5e 6y ago
  > the lack of acknowledgment that the financial aid within top schools runs deep, I think you're confusing depth and breadth. It's like the Harbor Freight coupon. Everyone gets 20% off with a few exclusions. But the people paying less than 80% (to continue the Harbor Freight metaphor) are few and far between.
  - borski 6y ago
    No, I understand precisely what you're trying to say. Based on my (admittedly anecdotal) experience applying to colleges and working (however briefly) in Financial Aid at MIT, it was not a 20% blanket by any stretch; each case was treated individually and there was an explicit focus on ensuring students were not saddled with insane amounts of debt. There were exceptions, particularly for wealthy folks and people who were 'on the line' income-wise, but the majority got significant financial aid. Just to give you an idea, from MIT's stats[1]: * Average need-based MIT scholarship: $47,593 * Students awarded a need-based MIT scholarship: 59% * Students attending tuition-free: 31% * Class of 2019 graduates with no student loan debt: 76% * Average student loan debt for those who borrowed: $23,226 The trope that the expensive schools are the cause of the massive student loan debt problem is just that; a trope. When only 24% of the class graduates with any debt at all, I'm not convinced MIT (and similar) are the problem. This is largely due to MIT and similar schools having massive endowments from which they can draw for Financial Aid; there are cheaper schools, certainly, but they have coffers that are less deep (referring to private schools), meaning students end up having to take more debt. [1] https://web.mit.edu/facts/tuition.html https://web.mit.edu/facts/tuition.html
    - grepthisab 6y ago
      You kind of buried the lede in your last paragraph: This is largely due to MIT and similar schools having massive endowments from which they can draw for Financial Aid; there are cheaper schools, certainly, but they have coffers that are less deep (referring to private schools), meaning students end up having to take more debt. It is reality that expensive schools cause the massive student loan debt problem, but expensiveness isn't totally buried in sticker price but total cost of attendance. Schools like HYSM don't saddle attendees with as much debt despite their high sticker price perhaps because of endowments.
  - NovemberWhiskey 6y ago
    No; that's completely wrong. For example, the median value of scholarships for Yale's class of 2023 with family incomes under $65,000 was $76,925. https://admissions.yale.edu/affordability-details https://admissions.yale.edu/affordability-details

throwaway0a5e 6y ago

You need to look at this from the perspective of someone who has little to no familial safety net and cannot rely on family resources to help them out when things get tough. Boston area schools being "basically free on paper" to middle income families is a reflection of the fact that a student from a ~100k income family has better options for getting ahead in the world than attending these institutions at any cost but these institutions would lose legitimacy without "economic diversity" tokens so they have to reduce the price. Going to Harvard (or similar) if you're not from the kind of people who go to Harvard is a high risk, high reward gamble with years of your life. These schools have to reduce the potential downside in order to get the quality of candidates they want to get from the demographics they want to get them from (i.e. they want to be able to pick the very best people from the "can't afford to attend" demographic). Also it's good PR. If you're the son of a plumber and your options are going to MIT for CS, or UMaine's "we match your local in-state tuition" deal paired with their crappy CS program the Maine one actually looks attractive because you're going to be surrounded by people a heck of a lot more like you (on a life experiences level), you're not gonna be bottom of your class and you won't be running the Boston rat race when it comes to housing, a part time job, commuting, and all the other "life" stuff". If you're the kind of high-achieving individual who goes to Harvard from a middle class background you're all but guaranteed to live more comfortably than your parents and retire comfortably regardless of the choice you make. Rolling a degree from a lesser state school into a stable job at BigCo isn't something you're worried about. The networking value add from Harvard or MIT isn't as much of a value add because you have no frame of reference for it and won't be making the kinds of life choices where it can be most helpful anyway (remember, no safety net, you're gonna be the one that builds it). So if you're gonna "win" no matter what you choose why add the additional risk of Harvard, MIT or some other program you could wash out of?

andrewmcwatters 6y ago

I always think about how absurd these pricing models are. Ah yes, if you're living lavishly at $90k per annum you, too, earn the privilege of paying for your education. I suppose at some point someone has to pay. But you're not rich at $90k. And I just don't see many of those households earning between $90-250k a year wanting to pay for such a privilege. From my perspective, you've got to be either very rich, or very poor going into those schools, because there's no reasonable room for those in-between unless you're taking out significant life-changing debt to do so. And after it's all said and done, you're overwhelmingly statistically unlikely to be making so much that the debt didn't even matter.

albntomat0 6y ago
As I understand it, financial aid isn't all or nothing.