Home > So are colleges exempt from the law of supply and demand?

So are colleges exempt from the law of supply and demand?

September 27th, 2009 at 03:02 pm

I guess we'll see, but I suspect that they are exempt - they certainly seem to have been so far. I know that state colleges are bursting at the seams as kids and parents shun the high priced private colleges (and very rightfully so). And I would imagine Community Colleges are booming also.

So how will the high priced private colleges deal with declining enrollments? And I'm not really sure if they have that or not - I guess all I know for sure is that state colleges are very full.

I guess the only real economical choice a student and parent have in the short term is to move down from state to community colleges for at least the first two years. There are just a handful of reasonably priced private colleges that I know of. There should be a thriving bunch of them. But maybe it takes real work (and a healthy endowment) to keep costs down and only a handful of colleges have that. A problem for me is that if my kid prefers the large university, the affordable private choices are about nil. There are a few small colleges that hold costs down, but they are pretty boring places!

As you may be able to tell, this drives me crazy! To have my life savings evaporated in a few short college years exasperates me to no end.

9 Responses to “So are colleges exempt from the law of supply and demand?”

  1. disneysteve Says:

    I've got no answer, and with an 8th grader who will head off to college in 5 years, I'm concerned, too.

    What has basically happened over the years is ongoing competition for students between all the schools. If one builds a new physical fitness complex, the others need to. If one makes the whole campus WiFi accessible, everyone else has to. If one upgrades their cafeteria to have a carving station, gourmet salad bar and panini press, so do the rest of the schools in that area. The one-up-manship has gotten out of hand and greatly escalated costs. As a result, schools are far nicer than they were when I was a student in the 80s and offer all kinds of amenities that we never dreamed of having, but the fees are way higher. The school I attended was about $10,000 in 1986 and is now over $40,000.

  2. ceejay74 Says:

    Yeah, my alma mater is an incredible place, but since it started out as a women's college in the 20s, their endowment is very small. (The older alums' donations tend to go to their husbands' colleges.) Even a middle-class income can get some financial aid to supplement the cost, but it's still one of the top two most expensive colleges in the country. I can't wait to have more money; one of my main charitable goals is going to be supporting this unique place of learning.

    As for public universities, tuition just keeps going up and up too! My husband gets in-state tuition prices and it's still $10K+ per year just for tuition.

  3. homebody Says:

    Be careful Ralph. I am not going to get into a parents paying/not paying for college discussion, because I did pay for OD's first college degree, but DH and I were only 40 and 41 when she went off to finish at Sac State after a 2 year stint at our local JC. If it was now and I had to tap a 401K, I would not do it and I think you need to think long and hard before you do. We have close friends whose son graduated June 2008 from a UC and he just took his MCAPs and is trying to decide whether to apply for medical school now for next fall or retake the test and wait. Meanwhile they have not cut him off financially and they are trying to figure out how to do that. They have another in college and one a freshman in HS. They are in their early 50s and are kind of in a panic at this point. Remember what you do for the first, the rest expect! I know of what I speak!

  4. ralph Says:

    Uh, homebody, you are 3 years late to the party! The second is more fiscally minded than the first, but she still wants to go to an expensive four year college. My situation sounds very similar to your friends' - panic! The first keeps talking medical school. I need to tell the second that #1 has big loans to pay off, so if she wants to avoid that, it's community college.

  5. scfr Says:

    When I toured a new dorm at my alma mater, I was shocked by how luxurious it was. The rooms were HUGE, and had private bathrooms in the rooms! (What happened to toting your personal items down the hall each morning to the communal bathroom?) I asked the administrator who gave me the tour why they were so lavish, and he replied that other schools did it so they had to offer rooms just as nice to attract students.

    And the dining rooms now serve organic, locally-sourced foods!

    Sadly, I lost my desire to donate to my alma mater because it didn't feel right helping fund such a luxurious lifestyle for the students. I still give, but not as generously as before.

    No wonder tuition costs continue to climb.

    I feel for you, and hope you and your family get through the college years relatively unscathed.

  6. ceejay74 Says:

    My college's amenities are nice but not overly luxurious. The main costs are the small endowment and the amazing 8:1 student to teacher ratio, which gives students unparalleled one-on-one access and attention. That I can definitely support, and plan to once my finances look better!

  7. LuxLiving Says:

    Are you coming back to us Ralph?

  8. ralph Says:

    Yup, still here, Lux. Thanks for asking! See today's post for my latest sad story. Argghhh!

  9. Jerry Says:

    I started out at a local community college (paying for it myself, but living at home), transferred to a state university for undergrad (although I also had private school options), and then went to a private graduate school program. Starting out at a CC isn't especially fun, and it's not the campus experience we dream of... but it is cheap, and doing well there can lead to success almost anywhere. The best thing for kids to do is to work their tushies off, get excellent grades and make the most of their talents, and then get the wonderful insurance policy of... a scholarship! Failing that, there are always student loans.

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