What will Duke education cost in 18 years?

[kybluedevil]

I'm a Duke alum, with a 6month old. College calculators tell me I need $600,000 to send little man to the Gothic Wonderland.

I fear elite schools are pricing out the middle class. Most Duke alumni can't save $1500/month per kid to give kids same education they received.

This saddens me.

[fuse]

You'll need to be Kreskin to figure out what Duke will cost in 18 years :-)

Duke was about $20-25k/year 20 years ago.

It's about $60k/year now.

300% in 20 years, so $180k/year in 18 years.
$720k is my guess. I hope I am very, very wrong.

[bjornolf]

You'll need to be Kreskin to figure out what Duke will cost in 18 years :-)

Duke was about $20-25k/year 20 years ago.

It's about $60k/year now.

300% in 20 years, so $180k/year in 18 years.
$720k is my guess. I hope I am very, very wrong.

Guess my kids aren't following pops.

[davekay1971]

NC State is looking very good right about now. Carolina...not so much.

[Jarhead]

If you would like for your offspring to attend Duke in a bunch of years money is not the top issue. The big question -- are they admissible? If so then money becomes a minor point. As colleges continue to refine their financial aid policies you will find that you can afford Duke as long as your family and career are stable. Admission is the key.

[davekay1971]

If you would like for your offspring to attend Duke in a bunch of years money is not the top issue. The big question -- are they admissible? If so then money becomes a minor point. As colleges continue to refine their financial aid policies you will find that you can afford Duke as long as your family and career are stable. Admission is the key.

Cost is still an issue. Financial aid may mean some scholarships, but there will also be lots of debt, or simply money spent by either parents or by the newly minted adult college student from investments their parents made toward their education. Either way, it's unlikely grants and scholarships will bridge the gap between $60,000 per year for Duke and $15-20,000 per year for in-state public education. We can certainly discuss whether the superiority of the Duke education (or superior name brand of the degree) warrants the difference, but the financial difference is real and will financially impact either the student or family in some way, unless the family is wealthy enough to brush off that difference without much impact.

Just using myself as an example: my parents, both of whom worked for the Navy and were therefore financially stable but not rich, put together a college fund starting from when I was born. They were good investors and by the time I went to college I had enough to pay for Duke, and no more. I had the option, of course, of going to other colleges (Maryland would have been my in-state option), and if I had money left at the end of college it would be mine to use for a nest egg, for higher education, whatever. I went to Duke, got a lovely education and majored in econ and poly-sci. I decided after college to become a doctor and did my pre-med work (now being in-state in North Carolina) for $250/course at NCSU and (dear God it pains me to admit) UNC. The Duke degree was nice, but my med school application cared only about MCAT scores, recommendations, and pre-med course performance, which consisted entirely of NCSU and UNC courses. The moral of the story for me looking back, is that I could have ended up in med school coming out of a much cheaper education.

I don't regret my path or my time at Duke, but I do look back at college as a step on a path to a career. Great colleges like Duke can get you there, but, if you have some knowledge entering college of what you want to do after college, you can achieve the same ends from "lesser" schools, frequently leaving yourself better off financially down the road. I'm not struggling financially now that I'm out of training and working, but I am still paying of med school loans that I would not have, had if I'd gone public education all the way through.

For my kids, I am saving and obviously I'll encourage them and support them wherever they decide to go, but I am counselling them that they should look at all aspects of the college decision: quality of the university, quality of the education program in their field of interest, where the college is located (would you rather spend your winters in Boston or Durham?), the nature of the student body (can you live with these people for four years?), cost of the education (I'm trying to gift them with the same kind of funding my parents did for me) and, that I will disown them if they go to Chapel Hill...expect for a few easy As to fluff the transcript, of course.

[77devil]

Duke has been out of reach for much of the middle class for sometime. The student body has become an economic barbell. Families are wealthy enough to pay full boat or able to qualify for substantial financial aid. There is not so much in between. Real wages in the U.S. have been essentially flat for 40 years hence the growth of two working spouse households to compensate. Duke tuition (and other private institutions more or less) has increased 7% a year compounded. The middle class was largely squeezed out.

[fuse]

If you would like for your offspring to attend Duke in a bunch of years money is not the top issue. The big question -- are they admissible? If so then money becomes a minor point. As colleges continue to refine their financial aid policies you will find that you can afford Duke as long as your family and career are stable. Admission is the key.

I'll respectfully disagree.
Yes, cost doesn't matter if you are not admitted.

Whatever the ceiling is for Duke being free plays into your point.

At 240k or 720k, any portion of that can be a crushing hole to dig out from under.
Graduate at 22 with 200k in debt?
Pay it off in 20 years, have no retirement savings and spend the next 40 years working to catch up for a decent retirement lifestyle?

Education gets you a degree(knowledge), a credential, and a network.
Duke certainly is tops in all three areas.
The ROI on the network and credentials better be beyond question to invest that kind of money.

[flagellaman]

I'm a Duke alum, with a 6month old. College calculators tell me I need $600,000 to send little man to the Gothic Wonderland.

I fear elite schools are pricing out the middle class. Most Duke alumni can't save $1500/month per kid to give kids same education they received.

This saddens me.

Jarhead alluded to the fact that the key is to get in. Yes, the key is to get in....and if you are middle class (whatever that means) there is still plenty of hope.

Duke, all the Ivys (I believe), Stanford, Northwestern, MIT, etc...in the past 10 years or so, they have completely changed the way they offer financial aid. I just went through this exercise with my daughter (who is now a junior at Harvard) and discovered a pot of gold at the end of the rainbow.

The colleges are realizing that there are tons of exceptionally bright students out there who are going to be our country's future, but they are poor and cannot afford (under the old system) the $60,000 per year (current) for tuition, room and board, and everything else to go to an elite university.

So, here's the good news...

This holds true for these elite universities. If your family income is $65,000 or less, you go for free! Just get in. If your household income is somewhere between $65,000 and $180,000 (I believe middle class is in here somewhere), the college does not expect the family to fund any more than somewhere between 1% to 10% of your family income (sliding scale), provided you have normal assets (whatever that means). If your family income is over $180,000, there's still financial aid to be gained. Just apply and see what happens!

Just get in! That's the key.

[weezie]

It's relatively important to also show sustained loyalty when donating to Duke. The amount doesn't have to be high/year, just consistent. A couple hundred bucks once a year does garner attention.

And if that's not depressing enough, check this out:
http://www.businessweek.com/articles...or-hefty-price

[Bluedog]

Duke has been out of reach for much of the middle class for sometime. The student body has become an economic barbell. Families are wealthy enough to pay full boat or able to qualify for substantial financial aid. There is not so much in between. Real wages in the U.S. have been essentially flat for 40 years hence the growth of two working spouse households to compensate. Duke tuition (and other private institutions more or less) has increased 7% a year compounded. The middle class was largely squeezed out.

I would edit that to upper upper middle class. The median household income in the U.S. was about $60k in 2012...That would make Duke FREE (admittedly, with $5.5k/yr in loans to be repaid, but that is reasonable). But I agree that it has become a barbell with upper class and middle/lower class students with the upper middle getting squeezed.

[Reisen]

Just as I saw ZERO chance of the mid 2000's real estate bubble continuing indefinitely, I see ZERO chance of the college tuition bubble continuing indefinitely. I have a 4 y/o and a 5 week old, and I'm certainly not planning on spending over a million dollars for their combined college tuition.

I'm far more worried about the local preschool / daycare charging me $50k a year combined for the two, so my wife can work.

[kybluedevil]

Interesting posts...

So most agree that funding college tuition will fundamentally change in 15 years? Should we save less to 529s then?

A cautionary tale: I know many classmates who went to Duke U, then graduated from PRIVATE medical schools. They are saddled with 8% loans for the next 30 years of their life. Essentially, their grad school debt exceeds their mortgage.

As many Duke alumni pursue grad school, the question is this:
If your kid knows he wants to be a doctor/lawyer/etc, does private undergrad have a better ROI than free state school?

I truly believe starting your career debt free far outweighs >>> ROI of "elite education" when grad school costs included.

[kmspeaks]

Jarhead alluded to the fact that the key is to get in. Yes, the key is to get in....and if you are middle class (whatever that means) there is still plenty of hope.

Duke, all the Ivys (I believe), Stanford, Northwestern, MIT, etc...in the past 10 years or so, they have completely changed the way they offer financial aid. I just went through this exercise with my daughter (who is now a junior at Harvard) and discovered a pot of gold at the end of the rainbow.

The colleges are realizing that there are tons of exceptionally bright students out there who are going to be our country's future, but they are poor and cannot afford (under the old system) the $60,000 per year (current) for tuition, room and board, and everything else to go to an elite university.

So, here's the good news...

This holds true for these elite universities. If your family income is $65,000 or less, you go for free! Just get in. If your household income is somewhere between $65,000 and $180,000 (I believe middle class is in here somewhere), the college does not expect the family to fund any more than somewhere between 1% to 10% of your family income (sliding scale), provided you have normal assets (whatever that means). If your family income is over $180,000, there's still financial aid to be gained. Just apply and see what happens!

Just get in! That's the key.

The calculations here can get a little screwy though. For example, between my sophomore and junior year of college my brother and sister graduated from high school and my dad lost his job. So even though my parents now had 3 children in college and had lost more than half their yearly income the Expected Family Contribution on my FAFSA increased. My sister and I were unaffected because all of our aid was merit based, mostly academic and a small amount for softball/volleyball, but my brother wasn't so lucky. He went to a state school, was denied any need based aid, and my parents couldn't come anywhere close to giving him the EFC so he graduated with about $80k in debt. The strange part is he was a much better student than my sister but in my experience (both with initial applications out of high school and again 2 years later when I decided to transfer) private schools were much more forthcoming with merit based academic aid than state schools.

[budwom]

A year or so ago I took the time to do the math (my math, anyway). When I was at Duke, graduating in 1971, tuition was around $3k, including room, board, tax, tip, etc.

I wondered, what would Duke cost today had tuition increased at the basic rate of inflation. (3% range?)...

The answer was somewhere around $25k, or basically half of today's fully loaded cost (tuition, room, board et al).

Very complicated issue. Yes, much more aid available now (though not to everyone)...back then, your family could have upper middle class income
and afford to pay full tuition. Obviously today's tab requires a lot more income, no matter how early you start saving.

[flagellaman]

The calculations here can get a little screwy though. For example, between my sophomore and junior year of college my brother and sister graduated from high school and my dad lost his job. So even though my parents now had 3 children in college and had lost more than half their yearly income the Expected Family Contribution on my FAFSA increased. My sister and I were unaffected because all of our aid was merit based, mostly academic and a small amount for softball/volleyball, but my brother wasn't so lucky. He went to a state school, was denied any need based aid, and my parents couldn't come anywhere close to giving him the EFC so he graduated with about $80k in debt. The strange part is he was a much better student than my sister but in my experience (both with initial applications out of high school and again 2 years later when I decided to transfer) private schools were much more forthcoming with merit based academic aid than state schools.

KMSPEAKS, yes, the calculations can be a litte screwy because the colleges are using your last full year of tax returns to determine how much financial aid to provide. To determine aid for my daughter's junior year at Harvard (2014-2015), our 2013 calendar year tax returns were used. So, if during 2014 your family income drops severely, you need to let the college know what just transpired. They may make adjustments...

FWIW, we are paying less for our daughter to go to Harvard than it would be for us to pay in-state tuition at University of Washington (assuming we are Washington residents) or any of the University of California schools (assuming being a California resident), or Texas or North Carolina state schools.

But everyone's situation is different...

[duke79]

I'm a Duke alum, with a 6month old. College calculators tell me I need $600,000 to send little man to the Gothic Wonderland.

I fear elite schools are pricing out the middle class. Most Duke alumni can't save $1500/month per kid to give kids same education they received.

This saddens me.

I crunched some of the numbers. If we assume a current cost for room, board and tuition of $62,000 (and I think this number seriously underestimates the true cost of college today; e.g., does not include spending money, transportation costs, books, clothing, etc. Although some kids hopefully earn some money with summer jobs or jobs during the school year), and we assume college costs increase at 3% per year (compounded), then the cost would be around $82,000 per year 18 years from now. If we assume costs increase at 5% per year, then they yearly cost would be around $120,000 per year, obviously a big difference given the compounding effect over 18 years. To accumulate enough money to fully pay for four years 18 years from now (and assuming the 3% annual cost increase), you would need to save $1,350 per month for a new born child, assuming a 5% rate of return on your saved monies - obviously a daunting task for most young parents. The numbers are truly scary.

[Bostondevil]

I crunched some of the numbers. If we assume a current cost for room, board and tuition of $62,000 (and I think this number seriously underestimates the true cost of college today; e.g., does not include spending money, transportation costs, books, clothing, etc. Although some kids hopefully earn some money with summer jobs or jobs during the school year), and we assume college costs increase at 3% per year (compounded), then the cost would be around $82,000 per year 18 years from now. If we assume costs increase at 5% per year, then they yearly cost would be around $120,000 per year, obviously a big difference given the compounding effect over 18 years. To accumulate enough money to fully pay for four years 18 years from now (and assuming the 3% annual cost increase), you would need to save $1,350 per month for a new born child, assuming a 5% rate of return on your saved monies - obviously a daunting task for most young parents. The numbers are truly scary.

Thanks for crunching those numbers, duke79, but do any of us believe those numbers are sustainable? There's going to be a correction in college costs/financial aid/student loan debt sometime and I suspect it's coming sooner rather than later. Certainly before Baby reaches college age.

[fuse]

The correction will likely impact schools outside the top 25 or without a significant pedigree.

No one is going confuse an online degree with a degree from Harvard, and it is the online courses and community colleges that will offer an education at a reasonable expense.
What you'll miss is the credential and the network.

I believe Dartmouth is leading the charge in protecting their revenue.
Some college students are leveraging 2 years of community college to reduce their education cost.
I believe Dartmouth is the first school on record indicating it will not accept transfer credits.

[77devil]

A year or so ago I took the time to do the math (my math, anyway). When I was at Duke, graduating in 1971, tuition was around $3k, including room, board, tax, tip, etc.

I wondered, what would Duke cost today had tuition increased at the basic rate of inflation. (3% range?)...

The answer was somewhere around $25k, or basically half of today's fully loaded cost (tuition, room, board et al).

Very complicated issue. Yes, much more aid available now (though not to everyone)...back then, your family could have upper middle class income
and afford to pay full tuition. Obviously today's tab requires a lot more income, no matter how early you start saving.

Budwom, I'm afraid your math is off and the situation is actually worse. Coincidentally, I did the math this morning in a post on the Duke vs. UNC thread on the main board. I used the actual CPI deflator from the BLS but your assumption of 3% per year is close enough. I started with my freshman year in 1973 when tuition was $2,200. If you rerun the numbers, you will find that early 70's tuition(I used tuition only because I couldn't remember room and board) is about 8 grand in current dollars. Duke tuition for the past academic year was North of 40K. Is a Duke education with the ancillary benefits 5X better than in our era? No way.

I think the question the OP asks above about grad school is interesting and provocative. My two children are currently attending top notch and expensive business schools. Both went to private universities including Duke. Had they known grad school was in their future when applying to college, I think attending Penn State Honors would have prepared them just fine and saved Mrs.77devil and me a boat load. But how many children at 17 know for certain or even with confidence what their future holds? And things change once in college. Remember all the pre-meds at Duke who washed out after a semester of organic, if not freshman, chemistry. Now we're helping pay for grad. school because we are fortunate enough to be able to. I think grad school inflation may be worse. I can't remember what I paid for B school, and I lived with my parents for a year to save money, but Wharton all in is now $110 K per year(including reasonable off campus living expenses). Ouch.