solaris1 wrote:
Very encouraging to hear that Northwestern considers Princeton a comparable university. Princeton's endowment funds 80% of its financial aid, because Princeton does not let its students take out ANY student loans (all financial aid is 100% grants) and gives international students the exact same consideration for financial aid as for domestic students. Northwestern does not, because it probably depends more on federal student aid programs.
That's just not a very valid comparison there.
They arent comparing the program but how the huge drop in endowments will impact how they will be operating going forward. Most universities dont actually touch the principal, so when they have been getting 30% gains for the last few years its actually been pretty easy for places like HBS, Princeton, and Yale to spend like crazy. However, with a 30% decrease in their endowment and no gains these days these schools are going to either have to cut way back or suck it up and spend tons of money from their endowment.
If you look at how endowments are spent, scholarships are a relatively small portion...most of it goes towards funding professors, yes that does help keep tuition lower since those people are basically subsidized and they dont need tuitions to cover those salaries. 67% of Kellogg's spending related to their endowment was on professors but only 14% was on scholarships...and Kellogg is pretty generous, if you look at last years thread the vast majority of us heading there got scholarships small but still nice (usually in the 5-15k range).
Also I think you are buying the hype about certain schools not making students take out loans since they only give out grants. I can tell you that my expected contribution on the FAFSA was pretty high and that Kellogg gave me a grant/scholarship that pretty much was the difference between tuition and what I could pay according to the government. Thats what those schools do, most students take significant loans too since their families might have expected contributions but they can't really afford that.
Tuition at top schools is out of control and part of the reason its so high is because the very top schools set their tuition so only a few people can afford it 100% and then they use scholarships to adjust it downward for each person so everyone pays the max they can afford...so basically the school (producer) gets 100% of the suprlus but the students (consumers) get 0%. Since HBS and those schools set the bench mark other schools can charge really high tuition too even if their students have to take more loans.
Look at it this way, you show up at Best Buy to buy a new TV. The sticker price is 10k which they set so that only 2% of purchasers would be willing to pay that but then they offer to run your financials and see what the max you can afford. It says you can pay 6k, so magically that becomes your sticker price since they will offer you a special discount. Of course you really only have 2k in your TV savings account, so they offer to lend you the 4k difference so that you can buy that TV.
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Kellogg Class of 2010...still active and willing to help. However, I do not do profile reviews, don't offer predictions on chances and am far to busy to review essays, so save the energy of writing me a PM seeking help for these. If I don't respond to a PM that is not one of the previously mentioned trash can destined messages, please don't take it personally I get so many messages I have a hard to responding to most. The more interesting, compelling, or humorous you message the more likely I am to respond.