Why do tuition rates continue to climb even in this economy? Forum

[dr123]

For what it's worth, engineers don't pay a dime for their post graduate education. In fact, you get a living stipend to boot, and you're *still* underpaid, since you're essentially doing the work of a paid faculty member.

MS is not usually funded?

MBA possibly? I know a lot of engineers with MBAs

[XxSpyKEx]

I think perceived potential salaries have to be a driving force of tuition raises. It can't just be the ease of access to student loans because that same ease of access to student loans is there for other post gradaute degrees as well, and yet, most graduate degrees don't cost as much as law school does. Additionally, there are a ton of graduate degrees out there that will accept just anyone and do not require a particular specialization where salaries are low for pretty much all grads and so it tuition (e.g. masters in health sciences and masters in public policy). Also, there is a smaller pool of applicants for medical schools since they don't just take anyone; yet, the cost of med school is very high, which suggests perceived salaries play a role in tuition increases. The biglaw increases in salaries that have occured over the past decade or two certainly played a role in the increased perception of starting salaries for law school grads (i.e. in 1990 when nearly no one was graduating making $160k /year, it was impossible for law schools to try and "fudge" their numbers to make it appear that the median salary of all grads at their t4 was $160k year (you need at least one person who makes that much money who reports his salary to be able to do that while not outright lying about the number)).

[MyManKanye]

For what it's worth, engineers don't pay a dime for their post graduate education. In fact, you get a living stipend to boot, and you're *still* underpaid, since you're essentially doing the work of a paid faculty member.

MS is not usually funded?

MBA possibly? I know a lot of engineers with MBAs

MS degrees are usually covered. Some schools/engineering disciplines have separate programs for MS and PhD (i.e. if you get the MS you don't get a PhD). In these cases, usually the MS programs are either part of a 5 year BS/MS program or are in a smaller field of engineering. They are often paid out of pocket. Some programs are very cushy though. I know a girl (part hispanic) who has an amazing resume and has been offered tuition plus what amounts to about 70k per year in stipends/fellowships to attend a top 5 graduate program in engineering. If you do well in engineering UG you will make money going to school. Its also not really being underpaid since you don't have to do the ugly work professors do kissing ass trying to get grant and research money (the reason they have these MS students doing teaching and research work is so the professors can spend more time securing grant money).

As far as MBAs go, it used to be the case that lots of Fortune 500 engineering companies would pay all or part of their engineers tuition to go part time to get an MBA. This led to the MBA being largely worthless in these companies since everyone had one unless it was from somewhere amazing. With the economy the way it is this has largely ended (at least at the companies I've been associated with).

On topic though. I've always believed law school to cost what it does because it was the traditional bastion of the old money elite. If your dad was rich and wore a velvet robe than you went to a law school and got a job at his firm or his friends. Since it was all Monopoly money to them and the job was a prestige job law schools were able and expected to price it out of the range of many people.

Today, I believe it is a combination of just going along with the trend of tuition increases (hoping no one notices that it was heavily overpriced to begin with) and subsidizing scholarship applicants. Schools have high sticker prices so when one student goes for sticker he pays for another other URM or high end student that the school lured in with money. Its kind of absurd because the higher tuition rates are the more money they have to give out and the higher the sticker needs to be, a vicious cycle.

[kapachino]

For what it's worth, engineers don't pay a dime for their post graduate education. In fact, you get a living stipend to boot, and you're *still* underpaid, since you're essentially doing the work of a paid faculty member.

MS is not usually funded?

Depends on the program and/or the school. Columbia can be quite frugal when it comes to funding its grad students.

[Ignatius Reilly]

For what it's worth, engineers don't pay a dime for their post graduate education. In fact, you get a living stipend to boot, and you're *still* underpaid, since you're essentially doing the work of a paid faculty member.

MS is not usually funded?

It depends...its best to apply to phd programs and just leave with the masters

[well-hello-there]

I think perceived potential salaries have to be a driving force of tuition raises. It can't just be the ease of access to student loans because that same ease of access to student loans is there for other post gradaute degrees as well, and yet, most graduate degrees don't cost as much as law school does. Additionally, there are a ton of graduate degrees out there that will accept just anyone and do not require a particular specialization where salaries are low for pretty much all grads and so it tuition (e.g. masters in health sciences and masters in public policy). Also, there is a smaller pool of applicants for medical schools since they don't just take anyone; yet, the cost of med school is very high, which suggests perceived salaries play a role in tuition increases. The biglaw increases in salaries that have occured over the past decade or two certainly played a role in the increased perception of starting salaries for law school grads (i.e. in 1990 when nearly no one was graduating making $160k /year, it was impossible for law schools to try and "fudge" their numbers to make it appear that the median salary of all grads at their t4 was $160k year (you need at least one person who makes that much money who reports his salary to be able to do that while not outright lying about the number)).

That's why I'm willing to take on obscene amounts of debt. I sure hope the perception turns out to be true.

[r6_philly]

For what it's worth, engineers don't pay a dime for their post graduate education. In fact, you get a living stipend to boot, and you're *still* underpaid, since you're essentially doing the work of a paid faculty member.

MS is not usually funded?

Depends on the program and/or the school. Columbia can be quite frugal when it comes to funding its grad students.

Right, but the quoted person speaks as it is generally funded. Most of the MS programs I looked at in top programs are not funded, only the PhD is. If you are on the MS program, there is not even guarantee you can get on the PhD track. It reads like the MS-only tuition is used to fund the PhD track.

[EarlCat]

The biglaw increases in salaries that have occured over the past decade or two certainly played a role in the increased perception of starting salaries for law school grads

http://daviddfriedman.blogspot.com/2011 ... hange.html

[well-hello-there]

http://daviddfriedman.blogspot.com/2011 ... hange.html

the NYT article that mr. friedman opens up his article with has been thoroughly debunked as NOT applying to people who go to top law schools AND who are not douchebags. http://www.top-law-schools.com/forums/v ... 2&t=143622

If you go to a non-top law school, then landing a biglaw job IS the exception. Otherwise i'd say it is the rule.

[XxSpyKEx]

I think perceived potential salaries have to be a driving force of tuition raises. It can't just be the ease of access to student loans because that same ease of access to student loans is there for other post gradaute degrees as well, and yet, most graduate degrees don't cost as much as law school does. Additionally, there are a ton of graduate degrees out there that will accept just anyone and do not require a particular specialization where salaries are low for pretty much all grads and so it tuition (e.g. masters in health sciences and masters in public policy). Also, there is a smaller pool of applicants for medical schools since they don't just take anyone; yet, the cost of med school is very high, which suggests perceived salaries play a role in tuition increases. The biglaw increases in salaries that have occured over the past decade or two certainly played a role in the increased perception of starting salaries for law school grads (i.e. in 1990 when nearly no one was graduating making $160k /year, it was impossible for law schools to try and "fudge" their numbers to make it appear that the median salary of all grads at their t4 was $160k year (you need at least one person who makes that much money who reports his salary to be able to do that while not outright lying about the number)).

That's why I'm willing to take on obscene amounts of debt. I sure hope the perception turns out to be true.

They don't for the vast majority of law students...

http://daviddfriedman.blogspot.com/2011 ... hange.html

the NYT article that mr. friedman opens up his article with has been thoroughly debunked as NOT applying to people who go to top law schools AND who are not douchebags. http://www.top-law-schools.com/forums/v ... 2&t=143622

If you go to a non-top law school, then landing a biglaw job IS the exception. Otherwise i'd say it is the rule.

Not ITE it isn’t (unless your definition of a “top law school” is yale). A LOT of people strike out at OCI nowadays… Just check out some of the numbers that people have been posting from their schools. Even at school like Columbia and Harvard, there are only somewhere around 70% of all OCI participants that got biglaw SAs in the c/o 2011 (meaning the total % of the class getting biglaw is lower, and the percentage that had a biglaw offer at graduation is going to be much lower – I’d be surprised if more than 50% of the classes at t6 law schools have biglaw offers at graduation in my class (i.e. c/o 2011)).

[EarlCat]

http://daviddfriedman.blogspot.com/2011 ... hange.html

the NYT article that mr. friedman opens up his article with has been thoroughly debunked as NOT applying to people who go to top law schools AND who are not douchebags. http://www.top-law-schools.com/forums/v ... 2&t=143622

If you go to a non-top law school, then landing a biglaw job IS the exception. Otherwise i'd say it is the rule.

But top law schools are the exception. So, what, 10% (?) of law school have decent job prospects. How is the article debunked?

The point was the Adam Smith quote anyway--showing that the illusion that law is the road to success is nothing new.

[Ignatius Reilly]

For what it's worth, engineers don't pay a dime for their post graduate education. In fact, you get a living stipend to boot, and you're *still* underpaid, since you're essentially doing the work of a paid faculty member.

MS is not usually funded?

Depends on the program and/or the school. Columbia can be quite frugal when it comes to funding its grad students.

Right, but the quoted person speaks as it is generally funded. Most of the MS programs I looked at in top programs are not funded, only the PhD is. If you are on the MS program, there is not even guarantee you can get on the PhD track. It reads like the MS-only tuition is used to fund the PhD track.

no one told you to pass the quals

[well-hello-there]

http://daviddfriedman.blogspot.com/2011 ... hange.html

the NYT article that mr. friedman opens up his article with has been thoroughly debunked as NOT applying to people who go to top law schools AND who are not douchebags. http://www.top-law-schools.com/forums/v ... 2&t=143622

If you go to a non-top law school, then landing a biglaw job IS the exception. Otherwise i'd say it is the rule.

But top law schools are the exception. So, what, 10% (?) of law school have decent job prospects. How is the article debunked?

The point was the Adam Smith quote anyway--showing that the illusion that law is the road to success is nothing new.

it has been proven that the two people profiled in the article are in fact, douchebags. Furthermore, it is a fact that job prospects at top law schools remain quite strong.
I'll agree that top law schools are the exception and that the article does apply to non-top law schools.
big fan of adam smith too.

[well-hello-there]

Not ITE it isn’t (unless your definition of a “top law school” is yale). A LOT of people strike out at OCI nowadays… Just check out some of the numbers that people have been posting from their schools. Even at school like Columbia and Harvard, there are only somewhere around 70% of all OCI participants that got biglaw SAs in the c/o 2011 (meaning the total % of the class getting biglaw is lower, and the percentage that had a biglaw offer at graduation is going to be much lower – I’d be surprised if more than 50% of the classes at t6 law schools have biglaw offers at graduation in my class (i.e. c/o 2011)).

well that sux.
in a few years, I sure do hope I don't miss the biglaw boat

[porgie]

Easy money = bubble formation, people willing to pay inflated prices, etc. Refer to housing market from 2000 to 2007ish coupled with the accessibility to easy money.

The more disturbing realization of all this isn't how the government overtly subsidizes the university system while passing on the risk (debt) to students, but how people with bad grades (or lets say "lower") subsidize those with higher grades.

A person that made it into their "reach" based on thier numbers is frequently compelled to attend said school whilst paying sticker (reliance on rankings only amplify this dynamic) which then allows said school to offer scholarship to students with higher numbers.

And, on a side note, if someone who's received a substantial URM boost helping them get into a school with students who have done substantially better throughout their academic career, guess who will likely end up "subsidizing" the latter students ranking upon graduation? Who then is more likely to get the top jobs?

It's a tough, unforgiving world out there... and the university system isn't much different then the business world in several of these respects.

It would be interesting to calculate how much the cost of attendance would be if no financial aid was given and compare it to the actual rate sticker-students are paying. The problem, also, with this approach of subsidizing need-based aid by raising rates is that it's a never-ending problem. By creating need-based aid, the schools charge more, and then a greater number of students need aid (the ones who could've afforded the tuition if no need-based aid was given, but can't afford the rate that it takes to subsidize other students).

I also agree w/ MTAL about the larger demand for subsidized education. If you take out $150K in undergrad for a degree in English, you're a fool b/c the expected return on that degree probably isn't high enough to really justify those loans. But for some reason, not many people find it bothersome to pay $40K out of pocket for an English degree from a state school, and pass the remaining cost onto state taxpayers (I'm from CA where the high cost of public education has become extremely burdensome). It's the same problem w/ most public goods...detaching the cost from the benefit will skew people's choices.

When this bubble bursts, it'll be interesting to see if people blame the government or blame the lenders for this problem since people tended to mostly blame the lenders for the housing crisis.

[bigben]

As far as I know, the availability of student loans hasn't been affected by the crash. If anything, I would assume the government's continued centralization of the industry has made funds easier to get.

Centralization? The venue for financing has changed (direct lending instead of direct lending with the name of a bank slapped on), but there hasn't been any meaningful changes in the actual vehicle.

Yes, however, further government control over lending just puts us one more step toward enshrining unlimited higher education loans as an entitlement that will be politically difficult to eradicate.

[bigben]

People were making unwise, irrational decisions long before federal educational lending was available. I hate to be the one to break it to you guys--especially the econ majors--but people are likely to continue to make poor financial choices.

Precisely. Except that now, they can continue to make them on a scale far FAR surpassing previous amounts, to the tune of 180-200k over the span of 3 years.

People were signing papers left and right a few years ago with a lot larger amounts with even less realistic expectations (housing). Do you really think they learned anything? It was the banks' fault after all.

Yes, and the banks took a hit for their foolish behavior (except where we bailed them out). Lending should be dependent upon whether the education is a good investment financially. If it doesn't work out, borrowers should be allowed to file bankruptcy. The end result is that there won't be as many loans available, and tuition will drop drastically. Programs will become more practical and vocationally oriented. They will also become much more part time so that people can work their way toward valuable education outside of work and over their lifetime. There will be much more emphasis on cash-flowing education. In fact, there is no reason that all higher education shouldn't be paid for through cash flow. There is no need for billion dollar facilities. Most knowledge is available online for free. For example, here: http://www.khanacademy.org/

See also: http://smartpei.typepad.com/robert_pate ... d-too.html

[too old for this sh*]

One variable being blamed, at least with State schools, is the various budget cuts at the State level. As the suckling of the government teat begins to dry up, the schools must secure their funding somewhere. Alumni can only bled dry so many times...as a result, the next wave to bear the brunt is the incoming student body. And it would likely take at least three to five years of decreased apps and admits in order to see any sort of a reversal...after all, a single down session can be blamed on various regional factors as opposed to the fact that applicants decided to cry "uncle" and voice their displeasure by reducing where they applied.

[androstan]

It's an arms race to spend more to boost USNWR ranking and overall "plushness" to increase desirability and attract more competitive candidates.