What Are You Paying For?
College vs. The Middle Class—a one-sided and ultimately unfair fight, college has been kicking ass since the early 1990s. In the system of government distributed aid, the more you make, the less you get. Therefore, when it comes to affording tuition itself, it actually makes sense to have less money—which is something interesting to think about.
Free Application for Federal Student Aid:
I sat down for an interview with University of Pittsburgh student Ben Hoffman—a handsome, well-dressed finance major with a professional smile, to get a better grasp on this system of less is more. Ben’s parents are divorced and when he went to fill out his FAFSA for 2013, he chose to enter his father’s information. Being that his dad makes a good living, Ben’s expected family contribution was rather high. Ben comes from a family with seven children, and his father’s income is stretched out between many different obligations. Furthermore, his dad’s high income hurt the amount of aid he received and prevented him from being able to pay off his 2013 spring semester.
After meeting with Ben, I was embarrassed about my lack knowledge on FAFSA. A little over a week later I went to see Colleen Hartner, the functional lead for financial aid at the University of Pittsburgh. She has been working in the Office of Admissions and Financial Aid for 34 years now. Ms. Hartner stressed the importance of meeting with a financial advisor so that you the student can make note of all the important deadlines.
She says, “We have so many advisors downstairs [referring to the financial aid office] and their primary responsibility is to address any concerns that the students have. We don’t even take appointments, you can walk right in and talk to an advisor!”
Ms. Harnter was very beneficial to my research, and led me to this website for a further explanation of our discussion[i]:
1) First, a school develops your COA, or cost of attendance. A cost of attendance includes tuition and fees along with living expenses, books and supplies, transportation and personal costs. A COA is different at every school and varies by student. Factors include your course of study, grade level, residency status, and more. For example, if you attended school in New York City, it would have a greater effect on your COA compared to a cheaper location such as Memphis, Tennessee.
2) Your EFC, or expected family contribution is the amount that you, (and your parents if you are a dependent student) are expected to contribute to the costs of higher education. The number is determined by all the data you supply on The Free Application for Federal Student Aid (FAFSA). Generally speaking, EFC is determined by considering a family’s income and assets, number of family members, and the number of family members in college.
3) Financial need is determined by the difference between COA and EFC. The amount of aid you receive is based specifically on your need. In most cases, the more financial need you have, the greater your eligibility is for gift aid, or money you do not have to pay back. Financial need will also make you eligible to receive federal subsidized stafford loans. A subsidized loan is one in which you can pay back with no interest.
Example:
The cost of attendance at College A is $25,000. After filling out your FAFSA, the federal government has determined your expected family contribution to be $15,000. This means that no matter where you decide to go to school, you will still be expected to pay $15,000. Using the equation COA – EFC = financial need, you can calculate your financial aid to be $10,000. 25,000 – 15,000 = 10,000.
However, if you decide to go to College B where the cost of attendance is only $20,000 your financial need will differ. Remember, your expected family contribution remains the same. 20,000 – 15,000 = 5,000.
What does this mean? Well, because financial need determines your eligibility for gift aid, you would actually receive more aid by attending College A. Although this problem is much too simple to consider whether College A or College B is more affordable, it does provide a clear example of how financial need is determined.
The Struggling Middle Class:
FAFSA makes sense until tuition is able to match a middle class family’s income—especially at more prestigious institutions. Government aid is simply not reaching enough under today’s circumstances of punishing tuition rates. Middle class students are struggling to pay. But what defines this middle class? Depends on who you ask. Even the middle class itself has been divided into high, middle, and low divisions. The American stratification of class can be very complicated—changing frequently and often. Although there is no correct answer to this question, economists have been able to draw some conclusions by asking Americans to define themselves. In 2013, The Wall Street Journal did a poll in which they asked American families to define a middle-income household[ii].
Among households earning $40,000 to $50,000, 48% put the middle-income marker at $50,000 and 9% said it’s below that. Half of all households earning $50,000 to $75,000 said their income bracket counted as middle-income; a third of those households earning $50,000 to $75,000 put the middle-income marker below them. Among households earning $75,000 to $100,000 a year, 39% said being middle-income means earning within their own income bracket. More than half of that group put the marker below their own incomes.
Everyone has a different opinion for what it means to be middle-class. Interestingly enough, most people defined their own bracket as middle class. However, only 9% of all Americans believed middle class to be lower than $30,000 and only 7% said it was more the $100,000. Therefore, it may be safe to put the middle class anywhere between $30,000-$100,000. But as I stated before, within the middle class exist different styles of living (high, middle, and low). Only 20% of all American households make more than $100,000 a year (roughly 62 million) according to the U.S. Census Bureau[iii]. I know all these numbers seem like a lot, but look at it like this:
1) Low-Middle Class: $30,000-$50,000.
2) Middle Class: $50,000-$80,000.
3) High-Middle $80,000-$100,000.
4) These three divisions account for nearly 80% (roughly 250 million) of all American incomes.
In its most recent survey of college pricing, the College Board reports that a “moderate” college budget for an in-state public college for the 2013–2014 academic year averaged $22,826[iv]. A moderate budget at a private college averaged $44,750. In a separate study, The U.S. Census Bureau has determined that lower middle or working class families’ make anywhere between $32,000 and $50,000 a year—which closely relates to the Wall Street Journal study we just worked through. You can see the problem here, right? Many colleges, especially private, cost more in tuition than working/lower-middle class families make a year. Even a family who makes $35,000 a year sending their student to a public university for $20,000 is in big trouble. That’s over 50% of the family’s income! In a 2013 New York Times article[v], Mark Kantrowitz, an expert on financial aid, answered select reader questions about the Free Application for Federal Student Aid. When asked, “In general, at what income does one become ineligible for need-based financial aid?”
Kantrowitz replied, “The financial aid formulas are so complicated that there is no simple way of expressing thresholds on eligibility for need-based aid. The only way to determine whether you are eligible for need-based aid is to apply. Conversely, if you do not apply for financial aid, you definitely won’t get any aid.”
Regardless of what your family makes, apply—the government wants to help.
After shuffling through all these statistics, I still felt like something was missing. I understood the mathematics behind it, but was lacking a social property. I stuck my head in a few doors around the University of Pittsburgh’s sociology department hoping to find some help on the matter. I got the chance to speak with Dr. Mike Epitropoulos, a professor at the University of Pittsburgh who specializes in Political Economy, State Theory, Social Movements, and Sociology of Development. His office was small but colorful—decorated by books, and maps of southern Italy. Our initial discussion was short—he wanted more time to look over my questions. About a week later he emailed me this statement:
Clearly the students and their parents who take on the commitment to pay tuition and any student loans are going to be directly affected. Beyond that, you have to look at social class and inequality. Students of wealthier families will have an easier time and those of middle and working class families will have a harder time. It’s that simple. Over the past three decades, many student aid programs—including many more outright ‘grants’ – have been eliminated by increasingly conservative US administrations (both Republican and Democrat). This only hits the middle and working classes to any real degree.
Remember, this working (lower-middle) class ranges from $32,000-$50,000 a year, and the average cost of tuition at an in-state public college is a little over $22,000.
He continued to write: Many analysts are now warning that the student loan crisis is a new form of ‘debt slavery’ that will keep under-and un-employed young people from protesting or from openly challenging the terms of their debt. Others warn of the revival of the classic, “Class Reproduction Thesis,” where the children of the rich will be the ones who become the educated, and subsequently get the important, and better-paying jobs.
Education is the key to success in this country. Take a look at this chart (2009 recession).
A degree has some serious influence on your future income. The higher your degree is, the higher your income. Plus, those without a degree have a higher unemployment rate. However, for nearly 80% of America, affording education isn’t some walk in the park.
When I asked Dr. Epitropoulos for his opinion on the valuableness of a degree, he went on to write: Anything you learn is good. Can you change a tire? Can you make an omelet? Today’s youth are in a tough spot. How valuable is a BA? Besides the expected return in terms of wages you will get from a job, there is the debt that you incur to get it—the opportunity cost. However, can you afford not to get a degree? The standard is raised, and so, unless you’re consistently kicking ass in your business or job, you will be in a pool of applicants with—on paper—more education than you.
The main point here is the idea of opportunity cost. In order to become competitive in the job market, it makes sense to have a college degree. The counter argument of course is, that this degree will end up costing you thousands and thousands of dollars not to obtain a job, but to have the opportunity to compete for one. Nothing is guaranteed. Dr. Epitropoulos reminds us that the standard had risen—meaning big time corporations want graduate students from top ranked Universities. It’s your resume vs. theirs.
What Are You Paying For?
Education is a wonderful thing, but some of it may not be so essential. Dramatically positioned in the back of my linear algebra class, I thought if a comet were ever to hit the earth, the perfect time would be now. In the front row sat an older man with long slicked back blonde hair that fell just to the back of his collar. He was the only one who ever seemed to raise his hand. He even answered the rhetorical questions. What was a 50-year-old man doing in my algebra class? I had to know his story. After class I introduced myself and explained my report regarding college tuition and other general concerns I had. He agreed to an interview and we sat down moments later.
David Glatts is 52-years-old and in college for the first time. David went to three years of nursing school, and then anesthesia school for two and half more years where he became a certified anesthesiologist. He came out with almost six years of education, but no college credits. David was successful—making $200,000 a year and living comfortably. David is an exception to our system of college degree and income relation, but remember, he still had direct training for six years—paying 1/4th the cost of tuition today. David said, “You can get your RN from community college for $6,000, and you’ll get paid the same as someone who went to a private university. The tuition for nursing school when I went was $1500 for three years, and anesthesia school was free. And my starting salary in 1984 was $100,000, and when I finished, I was making $200,000 a year.” After David divorced his wife, he lost a great deal of money (over $300,000) and found that the more he worked, the more money she got.
David said, “At the time of the divorce, she [referring to his wife] was getting like 5,000 dollars a month in child support and alimony.”
He also had to put two children through college, which took another toll on his bank account. After everything was said and done, he was tired, fed up, and wanted a break. David decided to stop working and come back to school. He went from making $200,000 a year, to taking out loans to enroll in first year general education courses. David is currently majoring in Health Services—hoping to run a hospital one day.
Before our interview, I had been thinking a great deal about course specificity to career choice. In this climate of drastically high tuition rates, should students be forced to take an abundant amount of general education classes?
I asked David, “In your entire career, have you ever needed to know what a vertical asymptote was?” I was referring to the graphing problem we worked on in class. David paused then said, “A what?” I restated the question reminding him of today’s lecture. He then continued, “Oh no, I’ve never seen anything like that necessary in life.” Although he did follow up and say, “I’ve never felt education is a waste of money, even if I take a class that I don’t think I’m going to use or need. I think what they are trying to do is give us a broad education. When I went to nursing school everything was strictly nursing applications and I missed writing and literature and even math sometimes.”
Yet, his story got me thinking. A man making $200,000 a year just told me he’s never used the math I struggle through every night. Plus, he’s in a major way more related to science than my Communications degree. David went on to talk about how he enjoyed taking new literature courses, but in the end, most of his general education classes were not benefitting his direct career path.
In reality, I only need to take 60 credits worth of communication classes to graduate. The other 60 is spent on math, quantitative reasoning, science, social science, philosophy and the list goes on and on. Wouldn’t it make more sense to re-design the system in a way for students to take direct career specific courses? Imagine how beneficial it would be if major companies could help design a part of the curriculum. Do you really think a PR firm wants to know if I can locate a horizontal asymptote? To follow up on this idea, I sent out a math problem from class to a number of professionals in different fields. Here’s a copy of the email:
I am doing a report for my Intermediate NonFiction class on the cost of college tuition. My argument is that Universities require us to take too many “general education” courses that do not directly prepare or relate to our specific field of study. These courses require us to remain in school longer—which demands more money, and are not essential to our careers.
I am conducting a case study of my own that tests the knowledge of successful business men and woman about subjects I am required to know for my general education classes here at the University of Pittsburgh. I would like to see if these problems remain relevant to people in diverse fields of corporate America.
If you don’t mind, I would like you to take a moment and look at this problem below. Without any Internet, or outside help I would like you to try to answer this problem:
f(x)= x + 3 / ((2x^2) – 5x – 3)
1) Find the real zeros of the denominator
2) Find the horizontal or oblique asymptote
3) Find the zeros of the function. The zeros are found by determining the zeros of the numerator
4) Find f (0)
Please try to solve the problem and send me your answers. If you don’t know the answer, that’s okay—I need your complete honesty to make for a good case study.
The first person I sent it to was my aunt, Patti Temple Rocks, the Managing Director at GolinHarris (Chicago). She manages the agency’s largest office—45 million dollar revenue. She replied:
“I love this idea—and have nothing even close to a clue in terms of how to answer this problem! And while I do wish I had a little deeper knowledge of accounting so I could read company balance sheets—being able to solve this problem is not something I would need to do today…or ever. For what it is worth I think you are completely right in your thesis! Let me know how it goes—sounds like a great project. I keep wondering when someone is going to question the value of the cost of college today!”
The next person I asked was Susan M. Harchelroad. Susan teaches at the University of Carlow and is a registered nurse with a master’s of science and nursing. She wrote:
“I am sorry to say that I cannot answer any of these questions. Medication calculations are relevant to my practice—and I rely on my smart phone and medication calculations apps to guide my practice. I do believe that a core of education is essential to a well-rounded college education. The core should be relevant to all disciplines. Maybe math for some majors should be centered on everyday essential skills—like balancing a checkbook. You need to know just about your major—but you need to understand a little bit about the world too. You live and work in a large world—and the more you know about it the more effective you will be.”
Susan makes a couple interesting points here, but the fact that neither of these two successful women had any clue concerned me. It’s clear that some of the courses we are enrolled in, that middle class families are struggling to pay for, have no real benefits to specific career paths. Wake up America!
I also sent this email to John Jacko, the VP and CMO of Kennametal, Jeremy LaCasse, the Acting Assistant Head of Cheshire Academy, Cameron Fisher, a camp director at Shady Side Academy, and my high school math teacher Susan Whitney. Can you guess who got the problem right?
Mrs. Whitney wrote, “Frank, if I can expand a bit on your thesis and the premise of your research, please indulge me. I think your project is interesting and enlightening. Of course, as a math teacher I always hear, when are we ever going to use this—you may have asked me this too, from time to time, sophomore year! But in reality, I believe college is not for job training as much as it is for a journey through the world of knowledge, to find out as much as you can about what is out there from the world’s foremost experts, while at the same time honing our problem solving skills, writing skills and research skills. That’s my two cents.”
I cannot disagree with anything Mrs. Whitney says here. However, I can argue that the idea of exploring the world of knowledge is much too expensive right now. Students need to get in and graduate as fast as possible. How many working class students truly have the opportunity to explore multiple majors? If you have the money to take extra classes, that’s great. Knowledge is a beautiful, powerful, and wonderful thing, but right now, it’s too expensive!
Linear algebra may be a necessity for math teachers all over America, but not for most corporate executives, or even college instructors. Patti Rocks runs a major division for GolinHarris without having to worry about the position of any algebraic asymptotes. I also strongly agree with Susan Harchelroad—if colleges are going to have students take math-related courses, they should be more resourceful. College should teach students about taxes, bank accounts, budgeting, or in other words, valuable life tools. The system needs to be redesigned.
Middle Class Testimonies:
After doing extensive research on the cost of tuition, I wanted to look at the affect it was having on the middle class student. I started by interviewing a close friend of mine, Mary Miller, who I can usually find passed out in library on Tuesdays and Thursday nights. Mary works anywhere between 15 and 25 hours a week at deStefino, a salon on the South Side.
She told me, “I need a sugar daddy…I really do because if I just had like an extra $300 dollars, my life would be so much better.”
Mary doesn’t spend time complaining. She always tries to stay positive and turns her everyday struggles into little jokes to keep her smiling.
Transportation is expensive—especially in a city where the cost of parking sucks the dollars from your pocket like a vacuum. Mary sacrifices the luxuries of a car and walks 30 minutes to and from school three days a week. But Mary also wants to stay in shape, so she views this as a positive thing. In reality, she has no time to work out between school and her job, so a power walk is the next best thing.
Mary says, “The exercise helps me monitor my cheese and bread intake.”
When I asked Mary if the cost of tuition was a big percentage of her family’s income she said, “My parents have been saving and saving from when I was in grade school. At this point, their savings for college are coming to an end, and they have to start taking it out of their own income. Any extra money that they have goes towards my tuition, not to luxuries or other expenses. My parents have been wanting to move away from Pittsburgh, but can’t until they are done paying for my schooling.”
Mary only has one day off a week between school and the salon. She works exceptionally hard, and that has been a common trait I found in all my interviewees. Her parents are trapped by the rising cost of tuition and are spending all they have to keep Mary out of debt. As a close friend of mine, I can say she lives quite frugally and it seems unfair.
I also spoke to another University of Pittsburgh student, Laura Kelly, who works three jobs to afford the cost of daily living. Laura is employed by the school working as an RA (Resident Assistant), a Path Finder—giving tours for Pitt, and works in SORC (The Student Organization Resource Center). Laura made it clear to me that she truly did not have the funds to go out like most college students do. But like Mary, she’s turned some burdens into positives. For example, she has made work easier by making close friends. Many of her closest girlfriends work along with her, and that makes the three-job rotation less stressful.
I asked Laura, “Without this, without your three jobs, would it be hard for you to go through college?”
She replied, “Uhh yes. Well, it would just be hard for me later in life, because I would have to take out loans and I’d have to live kind of differently. I don’t know what it’s like to be in college without a job.”
As an RA, Laura gets free room and board and without that, her family would not be able to pay for schooling without the aid of loans. Laura has to give up a great deal of social luxuries and like Mary, wishes she could simply relax and kick her feet up more often. Sadly, Laura can’t even think about attending school job-free because tuition is simply too high. However, not every middle class struggle is the same. Let me take you back to the night of January 17th 2014.
I woke up around 8pm with my feet on the living room table and my arm asleep—smashed between the couch cushion and my chest. All the lights were out except for a purple glow coming from the lava lamp sitting on the windowsill. I wasn’t hung-over, but I felt like it. I went over to the kitchen sink and drank some cold water from the faucet. My roommate’s door was closed but I called out just to be sure, “Hello…Johnny, you home?” Feeling extraordinarily lonely, I put my shoes on and checked my wallet. I had a total of thirty-five dollars; twenty-two of that I was willing to spend. I sat back down on the couch and let my senses stabilize. I turned my phone on:
- Two missed calls
- Four texts messages
- Two emails
- Voicemail from dad
I was more thirsty than lonely but had no interest in the semester old ginger ale expiring in the fridge. One of my text messages simply read, “Mi Ranch.” For those who don’t know, Mi Ranchito is the fake ID capital of the world. To get into Mi Ranchito your ID doesn’t even need to say over twenty-one…it just needs a few convincing holograms. I wasn’t necessarily dressed for a night out, but I was much too thirsty to care. The air was cold as I crossed through the back alleys from South Bouquet to Atwood. I stopped in at Doggin’ It for a cold soda then walked about half a block down the street to the bar. The line wasn’t very long, probably due to the fifteen-degree winter night. The bar pushed out about five feet from the wall and was maybe two and half surfboards long.
Sitting at the end of the bar was a beautiful girl with long black hair. She was a friend of a friend, but I followed her on all the social media outlets. Her twitter bio reads “~~hawian princess~~” and believe me, she was. With long black hair and eyelashes she truly resembled Disney’s version of Pocahontas. Surrounded by a group of boys mesmerized by her charm, her spell. Drink after drink the boys in the fraternity collection shirts tried winning her heart. She hadn’t paid for a drink all night, or maybe in her life. It was a system of fake interest and persuasion. She would put her hand on one of the boy’s arm and smile and laugh until they offered to buy her a drink. She moved from boy to boy never spending a dime. It was a mastered skill I had to know more about.
About a week later on January 22nd, I caught up with Olivia Issertell for an interview on her money saving strategy. We met in her neatly kept dorm room. Olivia sat on her bed back against the Biggie Smalls poster, which absolutely tied the room together. Her laugh was contagious and I could tell she enjoyed company. Olivia told me that she hasn’t had a dollar on her debit card in weeks. She uses her charm on boys to live a normal social life. With no coinage in her purse, Olivia has been able to eat and drink every weekend like Cash is her middle name. She says, “I use my girlish charm and my friends buy me drinks. I haven’t had a debit card all semester but I’ve gotten satisfyingly shwaysted every weekend…and got pizza almost every night.” Olivia has a 3.7 and plans to go to law school after graduating with a degree in Political Science. Olivia survives on a very strict budget only spending about ten to twenty dollars a week focusing most of her time on school.
Olivia showed me that although money can be tight, there are other ways besides working, sleeping, and school. She rebuts the idea of total struggle and promotes a more, dare I say, innovative style of living? But Olivia also made it clear to me that her dad rarely finds an extra dollar to give her and it’s been a rather tough semester.
A Passive Generation:
Is there anything we can do to slow down the cost of tuition?
I asked Dr. Epitropoulos for his opinion on the matter. I proposed, “According to “Tuition Rising” a book by Ronal Ehrenburg[i], tuition has been rising at a rate faster than inflation since 1993. In your opinion, are colleges doing this simply because they can?”
He replied, “Universities are being run more like corporations than the classic model of educational or non-profit institution. The American student today has no appetite to challenge or protest tuition hikes like they did in the past. A passive population that goes along to get along doesn’t pressure or threaten any cost on the universities for increasing tuition. Articles and tweets and blogs are of minimal resistance. At the end of the day, however, tuitions are raised because they can be raised.
How many student-lobbyists do you know? Dr. Epitropoulos makes a very compelling argument here. If a lack of pressure on Washington is the problem, why aren’t we at the knocking on Obama’s door? Maybe we want to care, but we just can’t find the time?
Yes our generation is struggling to pay, but we aren’t necessarily fighting back.
Susan Harchelraod also commented on this discussion saying, “It would be interesting to see a student body [referring to any university] put off class for a week until they found out where their tuition money was going. I know that endowment money is not spent to specifically fund students.”
She’s right. Ehrenburg writes, “Schools only spend around 4% of their endowment a year on current projects. They spend the return they get from their investments. This is known as an endowment payout, or the amount that the university has decided to spend from the endowment during that year. The return could be larger than what they are willing to spend—inflation protection.” (37)
Not all, but many schools in America have endowments well into the millions. Maybe it’s not the government we should be targeting, but the schools themselves.
Ehrenburg writes, “Certainly those of us who believe that increasing access to higher education for students from low-income families should be a high public priority can argue for increases in grant aid expenditures.” (83)
However, education is not the only thing competing for government aid. Yes we can argue that the government should raise their aid contribution, but other factors are competing for federal funds like Social Security retirement, Medicare, and Medicaid systems. Students should turn their interest towards the university itself to bring down tuition. Asking the government constantly to help is not proactive. Pointing fingers is not a solution either. Million dollar endowments that could be used to fund students are being kept for inflation protection. Challenge your school to address these concerns. If not, the middle class will continue to struggle and we will simply, “Go along to get along.”
Original Post: April 2014
[i] https://site.ebrary.com/lib/pitt/docDetail.action?docID=10328789
[i] https://studentaid.ed.gov/fafsa/next-steps/how-calculated
[ii] https://blogs.wsj.com/economics/2013/09/13/how-do-you-define-middle-class-people-who-make-what-i-do/
[iii] https://www.bankrate.com/finance/personal-finance/100-000-income-no-big-deal-anymore-1.aspx
[iv]https://www.collegedata.com/cs/content/content_payarticle_tmpl.jhtml?articleId=10064