The real cost of an Ivy
It seems like a lot of people talk about private vs. state schools and whether the extra tuition is worth the cost. I think people are really missing something obvious, FINANCIAL AID.
If you're worried about the extra tuition, your family probably qualifies for almost full financial aid. When I did the math, going to an Ivy vs. an in-state school, even with a special merit scholarship, was a no-brainer because the Ivy was 50% cheaper after financial aid.
Most of my friends also had significant financial aid. Very rarely will your family not qualify for financial aid - I still have 40k/year in financial aid even though my family earns very low six figures.
So if you're thinking of college applications, seriously consider going to an Ivy, if not for the experience, but FOR THE COST.
If you're already at an Ivy league school and you're riding that financial aid, give yourself a pat on the back.
I don't have any hard facts on this, but I would think that most people getting into the top schools families' make more than low 6 figures combined.
Please correct me if I am wrong.
I'm not sure about the above, but it's definitely pretty likely. But if my family earned 200k/year, I don't think college tuition would be such a big deal that I'd choose Berkeley over an Ivy based on cost.
Well, let me explain something to you little buddy. My family makes over 200k/year and they did when I was going to college. That did not mean that they had the money to pay for my education, nor that they would.
So, going back to your original point. If your family makes that much, it is very likely that you will get no aid at all. In that case, going to an in-state public school would be much cheaper than a private school.
Takeaway: Just because you got money from a private school, don't for fucks sake start thinking that private schools are cheaper than public schools.
My family is well above the threshhold for every financial aid program at the Ivies. Guess where my brother is going anyways, despite getting into Wharton and likely having had the SATs to get into Harvard?
The thing is that most of the kids shrewd enough to realize they want to go to an Ivy League school aren't coming from families that earn $120K/year. They're coming from families that earn two or three times as much and have parents that are hard-working professionals. Those parents also know that money is a finite resource and needs to get spent on good values, that income ultimately reverts to competence, and that the PV of the added competence from a private school degree isn't $120K- especially in this kind of market.
IMHO, if you live in a state like Virginia, Michigan, or California, you'd have to have a three inch hole in your skull to spend an extra $120K on school. Particularly if your state school has a great program in something you're interested in studying.
The ROI on a $40K in-state degree from a school like Michigan for business is roughly 50%/year- $40K over four years turns a kid capable of earning $60K/year into a kid capable of earning a mean of $100K/year.
The ROI on the additional $120K invested to put a kid through Wharton is probably in the single digits. Maybe that student will now earn $110K/year. Meanwhile, the parents can expect to earn more on their retirement savings tax-free while that extra $10K is obviously net-of-tax.
For graduate degrees, private schools start to make a lot more sense when it comes to ROI, but if you can pay in-state tuition for a top-ten program and the alternative is 4x as much for a top two or three program that will maybe net you an extra $10K/year on average, you'd have to be crazy to go to the top 2-3 program- especially if it means going deep into debt.
I'm gonna be attending an Ivy. My family is middle class, in fact my parents are immigrants, so while there are definitely rich people at Ivy's, I wouldn't say everyone drives a Porsche, vacations in the Hamptons and last name is Gates/Buffett/Rockefeller/etc.
@ibdreamer I think you're missing the point
The point made by everyone except the OP is that the financial aid programs at Ivy's are poorly structured. The people who get screwed are upper middle class...I bet if you look at the populations of those schools you'd see an uneven distribution of kids who are upper middle class who got accepted and didn't attend in favor of a cheaper school. I agree if you come from a middle class background you'll do great financially...
HYP ivies have ridiculous financial aid programs for upper-middles. Actually, since the true cost at one is 80K, even paying the full nominal sticker at 50K is getting de facto aid. Don't know about the others but HYP comes out to be cheaper than some publics, in a perverse twist.
How can it cost $80K/year to teach students?
Illinois's costs per student are $15K/year, even in departments that rank stronger than HYP like Engineering. That winds up getting priced at $20K/year for out-of-state students and $10K/year for in-state students.
This is a very inefficient system for training students, IMHO. Why not place an excise tax on these endowments and use that to fund more engineering, science, and mathematics degrees from state schools that meet certain threshholds of quality and cost-effectiveness?
I go to one of HYP, and first of all, the kids in the engineering programs at HYP are incredibly smart. Like insanely smart. They were the number one kids in their high schools, and this is not the case in most state school engineering programs (even the good ones).
Financial aid here is insane - for people who don't have a lot of money, they get incredible aid for their tuition. Certainly cheaper to go here than a lot of other places for many students. True, for someone with a lot of money, it is more expensive to go to HYP than their state school, but those people probably have parents who can afford it and think it's important to pay for the best possible education.
Most importantly, the value of an elite private school is not the expected payoff in nominal dollars (although that too is much higher than you give it credit for - my mom always tells me my inheritance is my education), but rather the experience you get at a place like HYP that you can't get anywhere else. You are surrounded by the best professors and peers in the country, and that's priceless.
You're damn right it's inefficient. Too much overhead, overpaid administrators and secretaries, ornate gardens and stonemasonry on faux gothic architecture, etc.
When I was a grad student STEM professors had to pay the university a 50-60% cut out of their extramural research grants to pay for the aforesaid luxuries and subsidize money-losing departments.
It was cheaper for me to go to a top private, non-Ivy school than it was to go to any state school. Many of the 'top' schools, especially the Ivies, have absurdly great financial aid packages for pretty much everyone who is upper-middle class and below financially.
Upper-middle class families definitely get screwed when it comes to the private institutions. They're kind of at the point where they are ABLE to pay for it, but it puts a strain on their finances, and that's the case with my family. My dad is over 60 and he still works around 60 hours a week when he's in the US and about 80-90 when he's travelling overseas to try and make the money to pay for my and my siblings education. Luckily both of my siblings that went to private institutions got fairly large scholarships which definitely helped pay for their education.
Obviously, the advice above doesn't make sense for everyone. But I think for a lot of people it does. I'm still surprised that with 200k/year you don't qualify for any financial aid because one of my friends does get financial aid, though he also has a sister attending college at the same time.
I agree with most people here that if you have to foot the entire bill, paying for private school isn't worth it if you can get into a good state school. Ironically, a lot of firms I'm looking at don't even recruit from my school but recruit from illinois, berkeley, etc.
Private schools are definitely inefficient. I go to a private Jesuit school which spends a substantial amount on landscaping. Is it necessary? Probably not. However, the school can get away with a high price tag because students can easily get federally backed student loans (I remember reading somewhere that the value of student loans outstanding is larger than credit card debt outstanding in the USA).
The value of a college education is obviously different for every person. Some pay more for an private education because they believe it will add value in ways that cannot always be calculated via ROI, such as the social network opportunities, the potential career paths, the physical location of the school, etc.
Public schools can offer these opportunities as well, but it really depends on the state.
Financial aid can also be dangerous in some circumstances. I knew some people on sport and academic scholarships that were worried that if they had a bad semester they could lose their funding.
^so true. while ivy league schools can give funding based solely on financial aid, i've heard that athletes that quit their sport get signficant cuts to their financial aid the next year mysteriously
Didnt read much of the above but I'll just say I go to a state school on full scholarship / grants so tuition is completely paid for and I get $2200 a quarter in my bank account none of which has to be repaid. Pretty cool. And it's not an athletic scholarship. Family income is mid 60s.
Dunno if the $40k in financial aid you mentioned above includes loans or not.
^ Sorry, I forgot to mention that all financial aid @ ivy league schools is in the form of grants and scholarships. So you never have to pay them back.
Imagine what we could do if we simply put a 10% tax on the returns of the Harvard Trust Fund and distributed that to state school Materials Science programs. The proceeds would be something on the order of $300 million/year. $300 million at Berkeley would probably net you enough materials science researchers to develop carbon nanotubes with a specific strength/mass ratio that would work well for a space elevator. Or enough research in the field of virology to cure AIDS. Dollar for dollar, money spent at Berkeley nets you much more research in the hard sciences than it does at Ivy Leagues.
Even if there are schools that produce much more engineering output than HYP, it doesn't mean they are better per student. My school is almost all liberal arts, and the few kids who do engineer are each incredibly productive (and same with out engineering professors), it's just a relatively small department.
Georgia Tech could certainly do more with $300mm are far as engineering goes, but that doesnt mean the money is better spent there than it is in Harvard's liberal arts programs.
We already fund state universities to the tune of a few dollars a year per taxpayer- and they've created the middle class, the world wide web, the dynamo, and chemotherapy. If we were simply to push it in the right direction, we could do even more and turn this into a country that makes stuff again.
Of course it does- at least on an ROI basis. $300 million at Ga. Tech= 5000 students doing $70-100K/year worth of philosophizing. $300 million in Harvard's philosophy program= 1000 students doing $40K/year worth of philosophizing or anthropologizing?I have a better idea- let's start spending less money on schools which graduate a thousand students a year at a cost of $320 million and start funding schools that graduate thousands of higher quality students- despite the fact that, as you say, they don't start off as smart as HYP students- at a cost of $60K/student? That provides a MUCH better ROI for the economy and, at a very tiny cost, redistributes the most important part of democracy- opportunity.
At the public research-I schools, the professors sacrifice teaching quality to focus on research. The top students at a top public can go toe-to-toe with the top students at HYP, but the average quality of the students is at HYP is higher because they lop off the lower end in terms of admission statistics. Some leftward outliers come up and prove themselves geniuses, however, so HYP does lose the false negatives based on low SATs, slackerly attitude in high school, "angular focus," etc. Case in point: Robert Laughlin, of physics fame. Plenty of others too.
At HYP, the professors coddle the students more. Most at P, some at Y and the least at H. H is most like the publics in that the students are expected just to bask in the faculty's greatness. P is the most coddling.
HYP students are incredibly arrogant, but they are very talented. Whether their arrogance is justified by their actual abilities is a subjective question. I think that arrogance is repulsive, personally, and it lessens a person.
At the end of the day, it is an adolescent prestige game. Put it all aside. We are all wormfood in the end. We may not all be born equal, but we sure as hell die equal.
Yeah, this topic definitely needs to get studied more extensively.
Without taking scholarships / fin aid into consideration, 4 years of going to a state school can be cheaper than 1 year at a private institution, especially if you're an in-state resident, go through CC for a couple of years and / or live at home.
But when it comes to financial aid, I'll actually argue that federal and state programs for public school kids aren't super generous. I know plenty of in-state residents who were 1) independents 2) making
Harvard has a $38 Billion endowment. 6,000 undergraduate students. This gives $6,000,000 endowment per undergraduate student. If you take a 5% annual rate of return, it gives you $300,000 per undergraduate student per year. A very small fraction of that actually gets awarded as scholarships. The Business School, Law School, and Medical School are generating immense amount of money in the form of Federal Research grants, alumni donations, and tuition. The endowment just keeps growing by $4 billion - $6 billion every year and exceeds the GDP of many countries.
I figured the ROR was closer to 6-10% and called it $3 Billion.
All I'm saying is- let's just tax the capital gains at a lower rate than individuals would pay. This way, everyone wins. Harvard gets more encouragement to pay out its endowment fund and we get stuff like space elevators and AIDS cures from the public ivies.
Why should harvard have to pay out its endowment? Good funding is what has allowed it be one of the best universities for hundreds of years, and it's critical to allow harvard to continue to attract the best professors and best students.
Also, I'm not sure if I agree with your assertions about all good things coming from "the public ivies".
I believe it was the book "Millionaire Mind" that first publicized en masse the findings that those who were accepted into an Ivy League school but who opted to attend a state university actually were approximately equally accomplished by the time they were like 40 or something. Basically, what it's saying is that intelligence and ability will allow for success no matter where you attend college. What it may also be implying is that state university intellect (myself, for example) will not necessarily be as successful as its peers if it were given a false admission into, say, Harvard (like if applications were accidentally switched).
The point is, if you're smart enough to get into Harvard then you're smart enough to succeed without it. And the point the book was making was that if your kids get into Harvard and aren't given financial aid, it may make more sense for him or her to go to the state university.
+1 SB to my teatotalling VT friend. :D
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