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Thread: Duke Tuition

  1. #1
    Join Date
    Dec 2009
    Location
    North of Durham

    Duke Tuition

    As an alum and parent of young children, I am hopeful that someday my children will have the opportunity to attend Duke if they so choose. Unfortunately, I don't think athletic scholarships will be an option, so I have already started to put away money for tuition. Unfortunately, like many other alums, I am stuck in the middle - not wealthy enough to be able to afford tuition without major sacrifices, but earning too much to qualify for financial aid (or at least a non-trivial amount). As tuition continues to rise at a rapid pace, the number of people in my group will continue to grow. And obviously, with record applications each year, Duke does not need to be worried about this, though out of obligation to their many loyal alums who are in this group, it would be an important topic to address.

    As a result, I found this recent Chronicle article to depict the situation well. I'm not sure what the answer is. I'm curious for other people's thoughts.

    http://www.dukechronicle.com/article...inst-increases

  2. #2
    Quote Originally Posted by CrazyNotCrazie View Post
    As an alum and parent of young children, I am hopeful that someday my children will have the opportunity to attend Duke if they so choose. Unfortunately, I don't think athletic scholarships will be an option, so I have already started to put away money for tuition. Unfortunately, like many other alums, I am stuck in the middle - not wealthy enough to be able to afford tuition without major sacrifices, but earning too much to qualify for financial aid (or at least a non-trivial amount). As tuition continues to rise at a rapid pace, the number of people in my group will continue to grow. And obviously, with record applications each year, Duke does not need to be worried about this, though out of obligation to their many loyal alums who are in this group, it would be an important topic to address.

    As a result, I found this recent Chronicle article to depict the situation well. I'm not sure what the answer is. I'm curious for other people's thoughts.

    http://www.dukechronicle.com/article...inst-increases
    This discussion always brings back a particular memory for me. When I was but a wee lad (about 4), I approached my father (a Duke grad from long ago) while he was doing yard work to ask him if we could have a pool built in our backyard. He put down his tools, walked inside, and proceeded to remove a few dozen documents from a filing cabinet including bank statements, tax documents, stock information, etc. Then he sat me down and asked me if I wanted to go to a good school, like Duke. When I said yes, he read through the documents with me and explained the importance of saving and how compound interest worked. Then we went through several pages of calculations on a legal pad to determine how much he'd have to save to send my brother and me to Duke.

    Needless to say, I never asked for a pool again, nor much else. Dad did send my brother and me to Duke, though.

    I think the problem will continue to get worse for about ten years, but beyond that time frame it's anybody's guess. The dynamics of higher education are going to change radically in the relatively near term. The early stages of the change are already visible. Many graduates find themselves saddled with debt and poor job prospects not so much because of the high cost of the education, but because of the disconnect between the cost and the proper incentives to lead them to select appropriate majors. Government-backed student loans have driven prices higher, but more importantly have created that disconnect and destroyed much of the market signaling that should exist in education. Meanwhile, cheap (or free), high-quality online courses are proliferating and gaining respect. They could radically alter the landscape of education for technology-related fields with solid pay. Many engineers and scientists still require physical tools that have usually only been available in expensive university (or industry) labs, and they will require university education a while longer. With the resurgence of "hacker" culture and local clubs with some of that equipment, I expect even that barrier will fall in time. At that point, the price of tuition will have to drop if universities expect to retain students, as the added opportunity costs on top of tuition will just be too high to ignore. In my opinion, expensive, private research institutions will face the largest challenges in this regard, so Duke might have something to be worried about after all, if not so much in the next couple of years.

    How does all that affect planning for college? Beats me.

  3. #3
    Quote Originally Posted by BLPOG View Post
    This discussion always brings back a particular memory for me. When I was but a wee lad (about 4), I approached my father (a Duke grad from long ago) while he was doing yard work to ask him if we could have a pool built in our backyard. He put down his tools, walked inside, and proceeded to remove a few dozen documents from a filing cabinet including bank statements, tax documents, stock information, etc. Then he sat me down and asked me if I wanted to go to a good school, like Duke. When I said yes, he read through the documents with me and explained the importance of saving and how compound interest worked. Then we went through several pages of calculations on a legal pad to determine how much he'd have to save to send my brother and me to Duke.

    Needless to say, I never asked for a pool again, nor much else. Dad did send my brother and me to Duke, though.
    IMO, you're very lucky to have such a great father!

  4. #4
    Join Date
    Feb 2007
    Location
    New Jersey
    Next year I will have a high school senior and freshman, neither of which will have the grades to get accepted to Duke. For me, here's the article's money quote, for better or worse:

    "Roberts acknowledged rising tuition costs mean some families will be forced to pick different colleges if they cannot afford full tuition and are not offered financial aid, but he also said that the consumer price index—which measures inflation—is an average, and the high-priced talent pool at Duke and its peer institutions have to cost more than other goods and services."

    The cost and aid given has made choosing a college (and having a college choose you) more of a game than ever before. The stark reality is that if you can't afford Duke for your child even if they have the resume to be accepted, then there is a school that might be a smidge "lower" that will offer you substanital amounts of money to have your kid go there. I put "lower" in quotes because I have yet to understand what that means other than the perception that people have for the school and the perception the school has for itself relative to other schools. I do not think it has anything to do with the actual level of education, which I think has more to do with what the student puts in than the reputation of the school, but I guess that's another discussion. If your kid can get into Duke, but you have to pay full price, then there's a reasonable chance that a school like Wake Forest (just as an example due to its geographic proximity to Duke), which is an excellent school but is "lower" than Duke, will offer scholarship money or more financial aid to have a kid like yours.

    It's really just a matter of supply and demand. Duke may not need your kid enough to pay to have them, but a "lower" school most assuredly will. Until the system changes, that's the cold, harsh reality of the current situation, like it or not.
    Rich
    "Failure is Not a Destination"
    Coach K on the Dan Patrick Show, December 22, 2016

  5. #5
    Quote Originally Posted by CrazyNotCrazie View Post
    As an alum and parent of young children, I am hopeful that someday my children will have the opportunity to attend Duke if they so choose.
    My cousin's family could not afford to send him to Duke. The US Navy paid for my cousin's entire Duke education, including Duke Med. Where there's a will, there's a way.

  6. #6
    I think tuition was about $25K per year when I was there, and that seemed like a ton of money at the time. I had no idea it was up to $50K. Wow. I have four kids, so it would be pretty close to $1 million to educate them at Duke after you take room and board into account.

  7. #7
    Quote Originally Posted by CrazyNotCrazie View Post
    I'm not sure what the answer is. I'm curious for other people's thoughts.
    Most finance geeks will say 529. Unlike most, I also recommend people consider Roth IRAs invested in broad-based domestic index funds.

  8. #8
    Join Date
    Feb 2007
    Location
    Santa Cruz CA
    Quote Originally Posted by BLPOG View Post
    This discussion always brings back a particular memory for me. When I was but a wee lad (about 4), I approached my father (a Duke grad from long ago) while he was doing yard work to ask him if we could have a pool built in our backyard. He put down his tools, walked inside, and proceeded to remove a few dozen documents from a filing cabinet including bank statements, tax documents, stock information, etc. Then he sat me down and asked me if I wanted to go to a good school, like Duke. When I said yes, he read through the documents with me and explained the importance of saving and how compound interest worked. Then we went through several pages of calculations on a legal pad to determine how much he'd have to save to send my brother and me to Duke.

    Needless to say, I never asked for a pool again, nor much else. Dad did send my brother and me to Duke, though.

    I think the problem will continue to get worse for about ten years, but beyond that time frame it's anybody's guess. The dynamics of higher education are going to change radically in the relatively near term. The early stages of the change are already visible. Many graduates find themselves saddled with debt and poor job prospects not so much because of the high cost of the education, but because of the disconnect between the cost and the proper incentives to lead them to select appropriate majors. Government-backed student loans have driven prices higher, but more importantly have created that disconnect and destroyed much of the market signaling that should exist in education. Meanwhile, cheap (or free), high-quality online courses are proliferating and gaining respect. They could radically alter the landscape of education for technology-related fields with solid pay. Many engineers and scientists still require physical tools that have usually only been available in expensive university (or industry) labs, and they will require university education a while longer. With the resurgence of "hacker" culture and local clubs with some of that equipment, I expect even that barrier will fall in time. At that point, the price of tuition will have to drop if universities expect to retain students, as the added opportunity costs on top of tuition will just be too high to ignore. In my opinion, expensive, private research institutions will face the largest challenges in this regard, so Duke might have something to be worried about after all, if not so much in the next couple of years.

    How does all that affect planning for college? Beats me.
    Colleges and government are the only places where cost and productivity have not truly benefited from technology yet. Both are controlled by workforces who have a vested interest in the status quo. Introduction of productive technology will make it harder for the majority of them to hang on to high paying jobs. I just had a child graduate with a bachelor's degree. She took multiple online courses during this process, but we got no price break for doing so.

    However, some universities are starting to change this. For example, you can get a bachelor's degree from BYU-Idaho for ~$20K tuition total for the equivalent of a 4 year program. Sooner or later this will put downward pressure on college tuition rates, just didn't happen fast enough for us.

  9. #9
    Join Date
    Feb 2007
    Location
    Steamboat Springs, CO
    Well, I don't know where Duke tuition will go,... but I know where it's been. When I was at Duke in the early 1960's, tuition was about $1,000 per year. When my daughter was at Duke 30 years later, tuition was $17,000 a year. Now 20 years later it is at $50,000.

    It is only fair, of course, that we take inflation into account. Using a constructed CPI index, we have:

    1962 $8,000
    1993 $28,000
    2016 $50,000

    Hmmm....

    Kindly,
    Sage Grouse
    Last edited by sagegrouse; 06-13-2016 at 06:52 PM.
    Sage Grouse

    ---------------------------------------
    'When I got on the bus for my first road game at Duke, I saw that every player was carrying textbooks or laptops. I coached in the SEC for 25 years, and I had never seen that before, not even once.' - David Cutcliffe to Duke alumni in Washington, DC, June 2013

  10. #10
    Quote Originally Posted by BigWayne View Post
    Colleges and government are the only places where cost and productivity have not truly benefited from technology yet. Both are controlled by workforces who have a vested interest in the status quo.
    I agree.

  11. #11
    Join Date
    Feb 2007
    Location
    Forest Hills, NY
    Here's what I have been seeing in response to this significant cost issue (even in HS where my prep school (not a boarding school) - where I am now a trustee - is $37K per year -- granted, in NYC).

    I have seen a greater number of students starting in community colleges and transferring, or starting in state schools and transferring. The degree is from the terminal school, but you've saved one or two years of a much greater tuition.

    Someone above mentioned technology - I don't think we are close to MOOCs or fully online degrees (eg, the for profit schools) superseding the traditional bricks and mortar institutions in the near future. I do see, however, that more online course offerings will be given by the traditional institutions, ultimately, perhaps with price breaks. The risk to the school is cannibalization of the classroom student enrollments in such cases. The benefit is perhaps a wider net of potential candidates (higher Q, lower P) (I am a prof and teach a few online courses as well as classroom sections.)

    The prime institutions are tuition inelastic and seem immune to price pressures. However, more and more articles have been appearing relating to the ROI of higher education. It will be interesting to see if those affect college choice and thus the "all that the market can bear" pricing.
    Last edited by duke74; 06-13-2016 at 07:02 PM. Reason: Typo.

  12. #12
    Join Date
    Nov 2007
    Location
    Vermont
    a year or two ago I did a simple exercise based on the tuition plus room and board when I was at Duke (1967-71), which was $3,000.

    Using the basic inflation rate, I roughly calculated that at that rate of increase, tuition, room and board today would cost about half of what
    it actually costs, approximately $30k vs $60k.

    As the poster above mentioned, Duke and other top schools can continue to charge this.
    However, the traditional notion that it was always a wise monetary decision to go to college is being challenged.

    Emerging from a much less prestigious school with a mountain of debt may (emphasis) not be the best choice, which is
    most unfortunate. In no way and I criticizing any level of school, I'm just noting that huge debt coming out of
    some schools may be economically untenable....which is unfortunate, since everyone who merits it should be able
    to have the experience of college.

  13. #13
    Quote Originally Posted by budwom View Post
    a year or two ago I did a simple exercise based on the tuition plus room and board when I was at Duke (1967-71), which was $3,000.

    Using the basic inflation rate, I roughly calculated that at that rate of increase, tuition, room and board today would cost about half of what
    it actually costs, approximately $30k vs $60k.

    As the poster above mentioned, Duke and other top schools can continue to charge this.
    However, the traditional notion that it was always a wise monetary decision to go to college is being challenged.

    Emerging from a much less prestigious school with a mountain of debt may (emphasis) not be the best choice, which is
    most unfortunate. In no way and I criticizing any level of school, I'm just noting that huge debt coming out of
    some schools may be economically untenable...which is unfortunate, since everyone who merits it should be able
    to have the experience of college.
    Yea, I've done this same exercise from when I was Duke from 1975 to 1979. I come up with the same number, more or less, that you did, if you assume the "average" rate of inflation, as measured by the CPI, from 1980 to 2016. The tuition, room and board would by in the low $30,000 range, if it had just kept up the general rate of inflation. We've had this discussion before on this Board and there are many theories as to why the cost of attending many private colleges and universities (and even state universities) has skyrocketed so much. No need to re-hash all the arguments here, but I think it comes down to the simple fact that certain schools realized they could raise their costs aggressively without negatively affecting applications or the quality of the student body (just look at the increase in applications to Duke over the past 30 years). If you run a business and can raise the price for your products or services every year by 6, 7, or 8 per cent and not affect demand for your products or services, why not do it? Of course, many of the colleges will also tell you that they have dramatically increased financial aid (which does include a healthy dose of debt for many students), so that the real, out-of-pocket cost of attending for many students is much lower than the "list price". Furthermore, what the schools have also done is place a lot of financial burden of running the schools on the backs of the more affluent parents. At almost all the top private colleges and universities, approximately 50% of the students receive no financial aid, so their parents (or grandparents) are paying the full amount, that, in turn, helps to subsidize the costs for the remaining 50% who receive financial aid. Sort of like a modern-day version of Robin Hood. We live in an affluent society (for many) and there are quite a few families who can afford to pay $65,000 (plus assorted extra costs) to send their kids to private colleges.

    I think you're right that many kids and parents are already questioning the value of attending a "less prestigious" private college or university, if they have to take on a mountain of debt, to pay for it (and I'm not sure it really makes sense either). I think it is especially true for those people who live in a state with a strong public university or community college system. I was talking with a friend of mine who has a daughter who is a junior in high school. They have already had two kids who have finished college. One went to a private university (equivalent to Duke) and the other attended the state university (which I would say is "fair" in the state in which I live). The one who went to the private university, now working for a non-profit and not making much money, is struggling just to pay her student loans. The mother told me that they may not even let their youngest child apply to any private colleges and just require her to go to the state university, because of the money issues. I think we will begin to see more and more of this and I'm predicting many smaller, private colleges with small endowments will fail over the next 30 years or so.
    Last edited by duke79; 06-14-2016 at 10:56 AM.

  14. #14
    Quote Originally Posted by duke74 View Post
    I have seen a greater number of students starting in community colleges and transferring, or starting in state schools and transferring. The degree is from the terminal school, but you've saved one or two years of a much greater tuition.
    I strongly agree and frequently give this advice. IMO, this logic works even better for kids aiming for advanced/professional degrees.

    When I'm interviewing Harvard MBAs, I very seldom ask questions about their undergraduate work. If they can succeed at HBS, then why be critical of someone minimizing their undergraduate cost?

  15. #15
    Join Date
    Nov 2007
    Location
    Vermont
    One unfortunate byproduct of all this (among many) is that, quite understandably, a lot of students and their parents are staying away from liberal arts education, opting
    instead for courses of study oriented more towards an immediate job...things like IT, accounting, et al. Fine choices for many, I'm sure, but I had the luxury of
    being a history major and took a lot of liberal arts courses, and I'm thrilled that I did. I got exposed to a lot of great stuff, some of which I actually still remember. For many today I fear that is an unaffordable luxury unless you know you're going
    to law school or something....but that's often not the case for kids who have to borrow a lot of money just to get an undergraduate degree.

  16. #16
    Quote Originally Posted by budwom View Post
    One unfortunate byproduct of all this (among many) is that, quite understandably, a lot of students and their parents are staying away from liberal arts education, opting
    instead for courses of study oriented more towards an immediate job...things like IT, accounting, et al. Fine choices for many, I'm sure, but I had the luxury of
    being a history major and took a lot of liberal arts courses, and I'm thrilled that I did. I got exposed to a lot of great stuff, some of which I actually still remember. For many today I fear that is an unaffordable luxury unless you know you're going
    to law school or something...but that's often not the case for kids who have to borrow a lot of money just to get an undergraduate degree.
    IMO, the degrees that help generate lucrative careers will be able to command large tuitions for many moons. Technology will help drive down the cost and increase access to the other degrees. The number of undergrad history majors may actually increase. You might educate thousands without leaving your house. DBR already has a sufficient staff to educate millions on the Civil War.

  17. #17
    IMO the monstrous inflation is the result of the availability of easy, government guaranteed loans. The easy money was quickly absorbed by increased salaries, building and general overhead. As a result the charges to the consumers (the students) skyrocketed. My entire education at Duke cost less than 10% of the present one year cost at Duke!

  18. #18
    Join Date
    Nov 2007
    Location
    Vermont
    and the ever increasing size of some of the schools's (gigantic) endowments raises a lot of questions about whether more should be used to
    lower tuition. Unfortunately, those schools are the ones much in demand despite the high tuition, so no reason to expect a change.

  19. #19
    Quote Originally Posted by Indoor66 View Post
    IMO the monstrous inflation is the result of the availability of easy, government guaranteed loans. The easy money was quickly absorbed by increased salaries, building and general overhead. As a result the charges to the consumers (the students) skyrocketed. My entire education at Duke cost less than 10% of the present one year cost at Duke!
    Yea...I think you make a good point and Bill Bennett, the Education Secretary under President Reagan, expressed this opinion way back in the 1980's. The availability of easy, government-backed loans allowed kids and their parents to borrow much more money than they every could have, otherwise, and the colleges took advantage of this to increase tuition to pay for soaring budgets. It worked great for the colleges and universities but not so well for the students and their parents and, eventually, the federal government (when some of the $1.3 trillion of student debt goes into default). If there had never been these government backed student loans, could the colleges have raised tuition by so much? I think not.

  20. #20
    Join Date
    Dec 2009
    Location
    North of Durham
    Quote Originally Posted by budwom View Post
    and the ever increasing size of some of the schools's (gigantic) endowments raises a lot of questions about whether more should be used to
    lower tuition. Unfortunately, those schools are the ones much in demand despite the high tuition, so no reason to expect a change.
    There has actually been an uprising of those who believe that schools with huge endowments should be perceived differently. Private universities benefit from tax-exempt status and some contribute more back to their local communities than others for fire, police, roads, etc. (they obviously support the local economy by shopping in stores and such, but that is a different argument). I believe the state of Connecticut is considering legislation to make schools that have endowments over $1 billion (i.e. Yale) be less tax-exempt. I know Harvard has made efforts to tap into its endowment more by minimizing or eliminating loans for those receiving financial aid. I think that schools with very, very large endowments should use more of their endowment to moderate tuition increases, but, like with many other nuances we are discussing, the group of schools with the largest endowments tends to intersect pretty closely with the schools with very strong demand profiles and thus they don't really need to respond.

    On the other hand, as noted in some other replies, the private schools that have less demand are likely going to go through a weeding out process. They still have many of the same costs as the other schools, but the ROI of going to these schools might not make sense for many. It is a shame that going to college has boiled down to an ROI calculation for many, but with the mountains of debt many students are graduating with, it is a necessary evil in many cases. There has been a slight uptick in the number of financially distressed private colleges, and this is likely to become a trend.

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