[dkarl]

“Some 40 percent of students pay list price,” Trachtenberg says. “These are people from wealthy families; I have no compunction about charging them list price. They can afford it.” But the school’s financial aid numbers make it clear that the picture is a little more complicated.

It doesn't outright say so, but it seems that Trachtenberg is relying on the canard that students attending on loans are not actually paying full price, which is absurd.

I actually had a college send me an embossed certificate in the mail awarding me a "Faculty of Arts and Sciences Scholarship." It was a low-interest loan. I felt like they were making fun of me. It was humiliating. I really wanted to go to that school, and it was like getting an embossed "Fuck you" in the mail.

[hugh3]

Isn't a loan at below-market rates equivalent to free money?

[dkarl]

Oh, yay, I would have got a few percent off the list price that I was 70% away from affording.

They could have given me that money up-front, right? Only that would have been too honest. The fact that they called a loan a "scholarship" is all you need to know about how much respect they had for kids' understanding. They rely on kids not knowing what it's like to pay off loans. Or on kids wanting to cash in on their degree after college, which I had no desire to do.

[hugh3]

I don't get it. Unless the total cost of college was more than you're planning to make over your entire career (which I doubt) then how are you 70% away from affording it?

[dkarl]

Being able to pay for something eventually is not a reasonable way to decide what you can afford. Try a mortgage calculator and see how much you can "afford" by that definition. It's insane. Nobody should dedicate half their life to paying off college unless the whole purpose of college for them is to land a high-paying job afterwards. $120k (fifteen years ago) might be a reasonable fee for meeting a bunch of rich people and getting insane management or banking job offers afterwards, but I wasn't interested in that.

[hugh3]

Fair enough, but it still seems to fall into the category of "more than I'm willing to pay" rather than "more than I can afford".

[barrkel]

That's the wrong calculation. What you need to compare is the total cost of college + any expected premium from that attendance, with the opportunity cost - the next best thing you could be doing with that time.

In software, especially in the US, the calculation is not obviously in favour of college attendance for motivated autodidacts: the cost of attending is very high compared with the subsidized rates in other countries, while you can get experience cheaply by building things others use, and leverage that into a startup or job offers. Meanwhile, one of the key advantages for having a degree in a software-related discipline outside the US is that it makes getting a US visa far easier. But if you're already in the US (legally etc.), that doesn't apply.

[brudgers]

If you have complete discretion about how to spend it, yes. On the other hand a low interest loan from an institution which can only be spent on tuition and fees, generates additional revenue for the institution in the form of interest or sale of the debt.

The homebuilding industry figured that out a long time ago.