Blogs:

Cost of higher education in America is rising quicker and faster than the inflation the past decade, as it has been highly publicized. Definitely this matter has to be analyzed seriously as it is a cause of great concern. However, it is important to ensure that the analysis is refined and is not based on the cost of the highest priced universities and their projected tuition fee rise over the next ten or twenty years. This is exactly what a lot of alarmists are up to.

The annual cost estimates they produce are alarming to say the least. Parents and students are frightened with figures that claim that families will be down by $170,000 a year for a two year Ivy League education and by $625,000 for a four year education. Naturally there is a strong feeling that no one other than the elite and the very rich can afford to study in universities.

Arguments of such critics only seem to reinforce myths regarding the benefits and cost of attending some of the best universities and colleges in our country. No doubt, tuition fees have risen to a great extent and something drastic has to be done to curb the rising cost of higher education.

Most of the cost critics target the elite Ivy League private institutions like the Cal Tech, Johns Hopkins, Northwestern, the University of Chicago and MIT. You can see that the tuition fee charged by these universities in indeed phenomenally high. For example sticker price of Princeton undergraduate education is $48,580 for the year 2010-11. Fee charged by Columbia is even higher than Princeton and exceeds $50,000. Average students cannot afford this kind of fee structure.

However, if you look at it carefully, you will find a huge difference between the discounted price offered to students and the sticker price. Some of the elite universities and the Ivy League schools admit students without considering their financial capability through practices like “full need financial aid” and “need blind admissions”. These institutions only analyze the potential of the students and their ability to contribute significantly to the college and towards society later.

Most of these universities thus do not base their decisions on their capacity to pay. After admitting the students, financial aid packages are customized permitting them to continue with their college or university education. Packages are customized predominantly based on the financial standing of the student’s family and their ability to afford the tuition costs.

Students who come from families under $200,000 income are offered minimal loan support and scholarship aids. There are some deserving students from very low income families who benefit from practically free college education.

Discount price offered by these universities and colleges depend entirely on the endowment levels. Financial aid packages are supported by these endowments at the undergraduate level. Endowments thus go towards enhancing opportunities for the gifted students who cannot otherwise afford education in these elite institutions.

Logically,  Congress’s suggestions on taxing the endowments will result in the reduction of the  number of needy students attending these universities and colleges.