Colleges and universities are non-profit entities and paint themselves as caring for the best interest of your child. But let’s be honest, they are a huge business and it’s good to remember that.
My local school district found itself in a controversy last year when they sponsored a seminar by a for-profit specialist in college financial planning. This person made the comment that colleges were a big business and you had to bear that in mind when speaking with them and reviewing their material. The word leaked out and the next thing anybody knew, the local colleges – state and private – were sending angry letters to the editor decrying this viewpoint and steadfastly maintaining their care for the welfare and best interest of the student. From what I understand, that session won’t be happening again.
But this financial planner was correct. The cost of tuition has gone up significantly faster than the rate of general inflation and no one can provide an adequate rationale for justifying this. Indeed, is this a big business? It might be not-for-profit, but it acts like any major corporation. Consider the state of Pennsylvania. The state financing agency is the Pennsylvania Higher Education Assistance Authority, hereafter referred to lovingly as PHEAA. This group has gained recent notoriety for a lack of accounting controls on spending with executives making paid trips to the California wine country and the corollary perks of cigars and wine excursions. Even when the information was divulged by a local newspaper using the Freedom of Information Act, PHEAA turned around and spent almost $100,000 to take their employees and families for a day at the local amusement park. Indeed, the head of PHEAA makes an annual salary of $285,000, which is more than the governor of Pennsylvania.
And the Chancellor of the state university system, comprising fourteen universities, is pulling down $325,000 annually.
There is an institutional bias toward keeping the gravy train rolling, at least for the powers that be.
Likewise, many colleges and universities are competing not only for faculty, but also in terms of the plushness of the facilities. One local private college even offers a Mongolian Grill for the students. And this is generally matched by the upgraded student commons facilities. These institutions have a vested interest in assuring that the steady flow of students and funding come through their ivied portals.
So when you read the materials and meet with the Admissions and Financial Aid people, be prepared to negotiate as hard as you can and be prepared to walk if you must. There are other institutions available and they need your child and money more than you need them.