College Costs Are Dollars Well Spent

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Would Ronald Daniels please answer the following questions:
1) In our hypothetical $50K/year sticker price scenario, are you talking cost (what it actually costs to deliver the education) or Price (what the student pays)?
For example, imagine it actually costs $40K, and students pay that on average, then those who pay full sticker price are underwriting the others, and those being underwritten still cost $40K even if they don't pay a cent. The money could have been spent by others elsewhere. Imagine every student paid zero because some wealthy individual underwrote every student to the tune of $100,000 at a university where the faculty was getting rich because cost was no object and students slacked off because it wasn't their money. The costs could be astronomical but the price could be zero, and you could make the case the guy underwriting the whole thing is a victim of fraud.
So what are we talking about? And do you admit that in my hypothetical, fraud is being committed?
2) Is value relative or absolute? I have an employee who has >$100K in debt to a grad school for an Masters in Journalism where courses cost $5,000 a pop. I've sent her to Gotham Writer's Workshop courses that are as long, as rigorous, more effective, and better taught by professionals (not academics) and they cost $395. She still has a problem saying her degree is not worth it and that the debt is ruining her life despite the fact that she left it off her resume when she applied, and she breaks into tears when we discuss it. I can tell you that no matter what anyone says, paying $5,000 for something that might even be worth $10,000 is foolish when the same thing can be had for $395. That's $4,605 in subsidy to something that isn't delivering value, only cost. (PS. Gotham runs at a profit, and the teachers report they are better treated by them than at the grad schools where they also teach as adjuncts).
Ronald, Your response, please.
3) How does one get at the truth at John's Hopkins? Are sample sizes of one big enough. Why not ask EVERY one of your grads. What if only 10% say it wasn't worth it, and only 1% say their lives were ruined, that may well be good enough to win a bet, but is it good enough for you? Do you adjust for psychological factors? Many victims of con artists don't admit their mistakes; indeed con artists rely on this.
I bought a Prius for $21,000. Had I paid $50,000 and thought it was worth every penny, then discovered I could have it for $21K, is my dealer being ethical? If a defect in the Prius only hurts 1% of the customers, is that OK?
Since I hold our institutions of higher education to higher standards than our manufacturing firms given their commitment to the truth, please give me answers to these questions.
Regards,
Brooke Allen

Brooke Allen of NJ 9:43AM March 27, 2011

I attended an expensive private school in the early 90s, graduated 40K$ in debt (it seemed like a lot back then), landed a terrific job on graduation, and payed off all of my loans in 3 years. Granted, I majored in engineering, and I lived frugally those 3 years, nonetheless, I think the answer is "it depends."
My 40K$ debt was after major financial aid packages, primarily in outright grants. I also had to play "chicken" with the admissions office as on years 2, 3 and 4 they always dropped my grants way down thinking it was too late for me to switch to another school. I'd kill at least a week a year threatening to bail if they didn't restore my grants, even showing admissions letters from my home state university. Eventually I won, but few other students did. The aid packages are often much juicier the freshman year to entice students, but schools can be quite sneaky thereafter.
Without the aid, my debt would have been around 90k$ which was near the price of a cheap house in a not too expensive neck of the woods at that time, about the same as 200k$ now. Point is, I wouldn't gamble if I was majoring in philosophy, but I think its still a good bet if you study something with solid job prospects and focus on loan repayment on graduation instead of getting addicted too early to the money. Incidently, I had many liberal arts friends who struggled with their loans for years, and ultimately "gave in" and went to law school or something else that paid the bills. I also had a couple that flunked out, dropped off the grid, tried for years to file for bankruptcy, and ultimately just worked underground jobs.

Davinder Singh of WA 3:23PM August 30, 2010

My Hopkins education and the name and reputation of the University opened many doors for me during my career. However, now the costs of attending Hopkins must be evaluated more carefully compared to the benefits of a public university. I am proud to be an alumni of JHU. I visited the campus with my son several years ago, but he decided to attend Mary Washington University, a Virginia public institution. He and we are very happy he made that decision and now he has no college debt hanging over him. I happen to believe the education there was just a good as Hopkins was for me.

kw of VA 10:44AM August 29, 2010

Anyone who pays 200,000 dollars for a degree is too stupid to have one. There are actually morons who pay that much for a degree in Sociology?

Sam of TX 1:06PM August 27, 2010

It's amazing that even during a recession, tuitions are still climbing at rates many fold in excss of higher education.
For those who are middle class, often the financial aid is given as loans. The universities are subsidizing the poor based on the middle and upper class who can 'afford' to pay based on the calculations they use. What happens is the poor get scholarships/grants, and the middle class get loans - which have to be repaid.
At what point can you really argue that tuition at a private university is really worth it. I am a Hopkins alum, and graduated with debt, and accumulated more debt in medical school. I can afford to pay off my debts, but had I not ended up in a good paying career, there would have been no way to have lived and paid off my debts....ie teaching.
Universities are going to have to take a hard look at how to start cutting....otherwise, there will be no one who can afford the 'full freight' tuition, leading to less financial aid.
Finally, with all the money in these universities endowments, why can't they subsidize all tuition with that?

JS of DE 3:56PM August 26, 2010

The annual increases in college tuition is fueled in part by easily acquired federally guaranteed student loans, much like the easy credit that was available during the housing bubble fueled rising home prices. It is unethical for colleges and loan agencies to collude and induce young people to take on loans that some will never be able to repay. If it were not for the easy availability if student loans, universities would have to find other sources of revenue to cover operating expenses (Hopkins is actually a good example) and tuition would generally be lower.

calmd of CA 12:00PM August 26, 2010

Why don't all college students just do what Chris Tremblay did and find a school that gives degrees away?
Washington post wrote about a one year wonder
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/19/AR2006091901779.html
Then we have another amazing 1 yr wonder Chris Tremblay:
http://www.aegeancapitalllc.com/aegean/management5.html
Mr. Tremblay says he graduated in 1 year also with all A's. He pretends it was prestigious University of ND when it was shuttered Notre Dame College in Manchester, NH. With college so expensive, and time consuming, it's disturbing that an individual and company can pass off that he completed 4 years worth of classes, satisfying all the prerequisites, and pay for 4 years of college all in one year, and graduate summa cum laude. He was a 32 yr old divorced father during Notre Dame, eventually arrested and disbarred. So much for summa cum laude.
The school was either a diploma mill, fraud upon society and upon every legitimate college graduate, or Mr. Tremblay is a truly amazing individual who should tell the world how he accomplished such a fete. Why did Suffolk Law school enroll such a fraud? Did his fake grades inflate the overall gpa of the school and prevent some other legitimate applicants from enrolling? Harvard Law promptly rejected him. Very disturbing that our legal system allows such frauds.

kevin sullivan of MA 1:35AM August 24, 2010

I majored in Chemistry. My sister majored in Nursing. Both of us went on to earn graduate degrees.
In the blue-collar neighborhood in which we grew up, a next-door neighbor whose kids went to work right out of high school (getting a head-start on us in the job market) kept asking my mother what good college educations were. Within a decade of us going into the workforce, my sister and I were earning substantially more than his three kids put together. I egged her on, but my mother was too classy to say, "THAT is what good colleges educations are."
Of course, if we had majored in areas where it's hard to find jobs and those available don't pay a lot, we wouldn't have much of an argument outside the fact that good college educations teach you to think for yourself better and you tend to make better life decisions because of it.

The_Mick of MD 7:27PM August 20, 2010

As long as those precious 53% of Full paying "suckers" continue to pay, the system will work for JHU. But right now, in this recession, the economic model has broken down for full payers with a very low ROI for any job that is not Alleopoathic med school, T-14 law school of top 10 MBA school. For the engineers, future acadmenicians and corporate middle managers, a good state school degree is now a better investment.

fred armbruster of VA 9:24PM August 18, 2010

I was in a situation at a public university where my family could not afford to pay the expected contribution (middle-class getting the short end of the financial aid stick as mentioned earlier, among other case-specific reasons). I took loans for the rest on top of my need-based loans. Loans + loans = a lot of loans, and in the end, the cost of my college education will be much more than the sticker price once interest is factored in. It is hard to put a final value on education and opportunity, and one should not treat it as something to find after sifting through the bargain bin. However, after reviewing graduate school applicants from undergraduate schools all across the nation, the final college product is frighteningly diverse in terms of student quality, and the cost or reputation of the institution need not correlate to the quality of the student product!
I now pay a couple hundred dollars a month for my student loans and will be doing so for the indefinite future. Rather than being able to have mom and dad pick up the tab, the entire burden was placed on me directly. I had choice things to say at the time as I worked late shifts in menial jobs, but looking back now I realize that it made me get the most out of my experience. I am one of the public school alumni on the JHU faculty that Daniels speaks of, and I am pursuing as my life’s work something that I love to do. My couple hundred dollars a month is well-worth it for the excellent education I received, and most certainly worth the job satisfaction. The sub-par Arts and Sciences faculty salary scale relative to our peer institutions is another matter altogether.
The caveat to this story is that it works best if you follow a traditionally employable course of study.

Dr of MD 5:34PM August 18, 2010