Affording Harvard: A Case Study
The previous discussion based on David Brook's semi-satirical rant on educational costs has inspired me to think out the problems involved in paying for top-notch university education on a budget. Here is what I have found.
Harvard’s website pegs the estimated cost of attendance at a mind-boggling $42,450. Of that sum, $27,448 is the cost of tuition. That is a lot of money, and Harvard could certainly afford to lower its admission.
Rensselaer Polytechnic Institute, my own alma mater, clocks in even higher, at over $45,000 (including the purchase of a $2,300 laptop), of which $31,000 is tuition alone (a one third increase since I enrolled just 7 years ago). We can decry the price all we want, but I also know from my days as a student fundraiser that tuition collected covers less than two thirds of the school’s annual operating budget (hence the need for student donation solicitors).
What would it take to fund everyone? Obviously, we taxpayers cannot afford to pay the tuition of every student that enters the system. Fortunately, we don’t have to.
Even with generous financial aid packages and years of college savings, students who graduate will be saddled with debt. I have no problem with this. Educating our students is expensive, and I have no problem with the people who gain from this education paying for the opportunity to learn the skills we’ll need to be successful in the world. The problem is that there are people who cannot afford college even with grants and loans. Even attaining $20,000 in aid, and living in cheap off-campus housing, eating cheap food with many roommates, and taking a part time job may not be enough for a student with no savings and no expected family contribution. Let’s see if we can make this work.
Let’s take the most melodramatic case of a graduating high school senior who is raised by a single mother who earns $20,000 / year, has two younger siblings, and no savings. Obviously, the expected contribution of this student is $0 on the FAFSA. Now, let’s say our senior is admitted to Harvard (hey, I warned you I was using the most melodramatic case). How can our student pay the tab?
First off, let’s get a bare-bones room and board case. Harvard estimates $9,280 / year for room and board on campus. Scrap that. How cheap can we get if we move off campus? Well, I know from personal experience that
Now we need to tackle tuition, fees, and “personal expenses,” which Harvard estimates at $33,190, bringing our total cost of attendance to $38,290 per school year.
For starters, high priced schools routinely give out need-based grants that top $15,000 per year or more. Let’s give our student $15,000. We still need to cover $23,290. There are many private scholarships available to students (see “Success Story” below). Let’s say our student is diligent in pursuit of private scholarships, and gets $2,000 / year in aid. We still have to fund $21,290.
Time for a part time job. A college student can find work that pays over $10 or $12 per hour, if he’s lucky. Let’s give our student a job that pays $9 / hour during the school year bartending or some such, and a more lucrative full-time position in the summer involved in construction, or other labor intensive job. Let’s assume a summer break of 15 weeks. Assuming a 20 hour work-week during the school year (I did it), our student makes $180 / week during the school year, and $600 / week during summer break. This gives us a total working income of $15,660 / year. Now, our student will have to pay some taxes, but not much because of his income. Let’s round his yearly income to $15,000. Subtract that from total cost of attendance, and we get $6,290 still uncovered.
In order to give our student at least the threads of a safety net, the federal government should be able to provide him with $8,000 / year in low-interest subsidized loans, covering the remaining gap in expenses, and saddling our student with only $32,000 in debt upon graduation. This loan would result in a payment of only $180 / month, given a 20 year repayment plan and a 3% interest rate.
Of course, our student will not have a comfortable 4 years. He will be poor. He will be uncomfortable. He will be tired. He will be working without the benefit of a safety net. He will be one step away from disaster. Not only that, but we’re assuming an awful lot of contingencies (securing need based scholarships, finding part-time work, getting three roommates, etc). But despite all the problems, he will be working very hard to ensure his future. If he is willing to endure all the uncertainty and hard work, then we should provide him with a chance. Tuition is an attainable goal.
In order to close this post on a note of hope, I’d like to point towards the story of Rebecca Perez, the brilliant daughter of immigrants who managed to fund her college education through her diligent pursuit of private scholarships. I realize that stories like Ms. Perez’s are the exception rather than the rule, and indeed could not be applied on a large scale due to resource constraints, but I do want everyone to realize that even in the most dire of situations, there is hope.