Some private colleges are advertising price cuts on their full-price tuition - and it's just one way that college is a whole different game for the ultra-wealthy
MediaNews Group/Orange County Register/Getty Images
- Pricey private liberal arts colleges are slashing tuition prices so they don't get overlooked by students who want a more affordable school, reported Tara Siegel Bernard for The New York Times.
- But these changes only reduce the school's advertised rates, which wealthy students typically pay - and at the same time, they're decreasing tuition discounts.
- That means that wealthy students are benefitting the most from the price cut.
- This isn't the only advantage the ultra-wealthy have when it comes to college.
- Visit Business Insider's homepage for more stories.
College is more expensive than it's ever been.
Tuition has more than doubled since the 1980s. And it's not just affecting the students bearing the weight of student-loan debt - it's also posing a problem for the colleges themselves.
Mostly private liberal arts colleges are at risk of being overlooked by applicants who want more affordable schooling, reported Tara Siegel Bernard for The New York Times. So, these smaller, pricey schools are slashing their tuition prices - but it's reducing their advertised rates, which only the wealthiest students typically pay, she wrote.
In 2017, 12% of freshmen paid full sticker price at private colleges, according to the National Association of College and University Business Officers. The average private-college freshmen received grants to cover 56% of their tuition.
But the same private colleges offering price cuts are also decreasing the discounts they offer to everyone else - so the new sticker price ends up more closely resembling what most students are already paying, Siegel Bernard wrote.
On average, one college per year decreased its tuition from 1987 to 2011, but that number jumped to 18 colleges in 2018, Siegel Bernard wrote. In the 2017-2018 school year, she reported, the private Mills College in Oakland, California, cut its tuition from $44,765 to $28,765.
Students in the middle class suffer the most from high college prices, even when discounted, according to Bernard Siegel: They can't afford the full price, but qualify for less need-based aid than lower-income students do. High prices can also lead schools to recruit wealthy students who can afford the full price, taking spots away from applicants who earn less, she added.
It's not the only way colleges are trying to attract students in the face of sky-high tuition. Both private and public colleges are employing a price-match guarantee move - offering to match the cost of tuition of competing universities to incoming students, according to Melissa Korn of The Wall Street Journal.
The ultra-wealthy get a leg up for college early on.
But that's not the only advantage ultra-wealthy kids have when it comes to college.
Their parents start their path to college young, by enrolling them in "Baby Ivies," private preschools and kindergartens that cost around $50,000 a year - if they're accepted, reported Suzanne Woolley and Katya Kazakina for Bloomberg.
For the college admissions process, some rich parents take part in a whole "shadowy" world where they can buy greater chances for their kids to be accepted into elite schools, reported Dana Goldstein and Jack Healy of The New York Times.
According to Goldstein and Healy, that includes paying up to $1.5 million for a five-year package of college admissions or making donations to schools that exceed $10 million - all of which is legal.
But some parents go to more extreme, illegal cases - consider the recent college admissions scandal, in which 33 parents were accused of paying a collective $25 million dollars to fabricate their children's credentials during the college admissions process in hopes of getting them accepted to elite schools.
Meanwhile, student-loan debt continues to get more crushing for the middle- and lower-class students who won't benefit from the price cuts. The national total student debt is over $1.5 trillion and the average student loan debt per graduating student in 2018 who took out loans is $29,800, according to Student Loan Hero.
- Startup funding hits a 5-year low in July-September quarter
- Mobile phone exports from India cross Rs 45,000 cr in April-Aug period, Apple leads
- Twinkle, Akshay pose with UK PM Rishi Sunak in London
- Troubles mount for Indian airlines, even in good times
- Malayalam survival drama '2018:Everyone is a Hero' is India's official entry to Oscars