It was only a matter of time before a college had the courage to quote its cost of attendance at nearly $100,000 a year. This spring, we get a glimpse of it.
A letter to a newly admitted Vanderbilt University engineering student showed an all-in price — room, board, personal expenses, a high-octane laptop — of $98,426. A student who makes three trips home to Los Angeles or London from the Nashville campus throughout the year can reach six figures.
This charming total is an anomaly. Only a small fraction of students entering college will pay anything close to it anytime soon, and about 35 percent of Vanderbilt students — those who don’t get aid who not based on need or merit — pays full list price.
But several dozen other colleges and universities that reject most applicants will likely reach this threshold within a few years. Their willingness to cross it raises two questions for anyone shopping for college: How did it happen, and is it possibly worth it?
Who Pays What
According to the College Board, the average 2023-24 list price for tuition, fees, housing and food is $56,190 at private, nonprofit four-year schools. At four-year public colleges, students in the state saw an average sticker price of $24,030.
That’s not what many people pay for, though, not even close. In the 2019-20 school year, according to federal data used by the College Board a report in 2023, 39 percent of in-state students attending a two-year college full-time received enough grant aid to cover all of their tuition and fees (though not their living expenses, which can make it difficult to attend school). At four-year public schools, 31 percent paid nothing for tuition and fees while 18 percent of students at private colleges and universities qualified for the same deal.
Those private colleges continue to provide significant discounts for people of all income types. A National Association of College and University Business Officers study private nonprofit colleges and universities have shown that they are reducing their tuition prices by 56 percent from the rack rate during the 2022-23 school year.
Vanderbilt also provides discounts, and its financial aid is extremely generous. This year, this announced that families with incomes of $150,000 or less will not pay tuition in most cases.
However, more than 2,000 students there who don’t get need-based or merit-based aid will soon pay $100,000 or more. Why does Vanderbilt need all that money?
Where Does the Money Go?
At some small liberal arts colleges with large endowments, even $100,000 won’t cover the average cost of teaching a student, according to the schools. Williams College said this spending about $50,000 more per student than its list price, for example.
In other words, everyone gets a subsidy. Perhaps its list price should be more than $100,000, so that its endowment does not offer unnecessary help to wealthy families. Or, perhaps, a price that high will scare off low-income applicants who don’t know they can get a free ride there.
According to Vanderbilt, its spending per undergraduate is $119,000. “The gap between price and cost of attendance is funded by our endowment and the generous philanthropy of donors and alumni,” said Brett Sweet, vice chancellor for finance, in an emailed statement.
No one at school will meet with me to break this figure or call on the phone to discuss it. But to Vanderbilt Financial statement offers clues as to how it spends money. In the 2023 fiscal year, 52 percent of its operating expenses went to faculty, staff and student salaries and wages, along with fringe benefits.
Robert B. Archibald and David H. Feldman, two academics who wrote “Why Does College Cost So Much?,” explained in their book why labor costs are so difficult at these institutions.
“The critical factors are that higher education is a personal service, that it has not experienced much labor-saving productivity growth, and that the wages of the highly educated workers who are so important to colleges and universities have increased,” They said. “These are economy-wide factors. They have little to do with any pathology in higher education.
Critics of the industry still believe that a kind of administrative bloat has arisen, driving up tuition to exorbitant salaries. But what is bloat, really?
Administrators oversee compliance, such as laws that make it possible for people with disabilities to get to and from college and prevent schools from discriminating against women. If we don’t like regulation, we can vote for different legislators.
Similarly, families in a free market can make alternative choices if they want fewer mental health practitioners and their bosses, computer network administrators, academic advisers or career counselors. And yet the first (prescreened) question that Vanderbilt’s chancellor, Daniel Diermeier, answered family weekend this past fall was about whether Vanderbilt should invest more in career counseling after the school’s five-place drop in annual US News rankings.
Is It Worth It?
If many families aren’t exactly lining up for a cut-rate residential undergraduate education, they’re still asking a lot of good questions about value. So is a $400,000 college education worth it?
It depends, and you know the answer is coming, right?
Most college shoppers wonder about earnings results, and possibly search by undergraduate major in federal government College Scorecard website. Data at this program level exist for alumni four years from graduation, although only for those who received any federal financial aid.
Vanderbilt biomedical/medical engineering majors have a median income of $94,340 four years. English language and literature majors earn $53,767.
The results are great, but are they exclusive to Vanderbilt? “You can get an engineering degree at a state flagship university that’s just as important as something you get at Vanderbilt,” said Julian Trevesa financial adviser and college specialist newsletter tipped me off to what was going on there.
I spent several days trying to get Vanderbilt’s vice provost for university enrollment affairs, Douglas L. Christiansen, to talk to me and answer these questions more precisely and more extensively, but I did not succeed. A university spokesperson sent me some generalities in his name. “We are committed to excellence at all levels, from the quality of our faculty, programming, facilities and research labs to the services we provide to support the academic, emotional and social well-being of our students,” the statement said. .
Anticipating a lack of substantive response, I attended a group information session for 125 or so prospective students and asked questions there as well. The senior admissions officer who took the question declined to answer. I’ve never seen that before, and I’ve been to these sessions at dozens of schools over the years.
But really, why should an actor in a competitive market answer that question if a human doesn’t have to? If nothing is publicly available, the amount of industry-wide data on quality — happiness scores, customer satisfaction, learning rates, friendship returns, the strength of career networks — just the price list serves as a sign of excellence, at least to some consumers.
And thousands of applicants respond to the signal each year by volunteering to pay the list price, even though the school rejects most applicants. Or maybe they volunteer because Vanderbilt and schools like it reject most applicants.
So a $100,000 list price is not our highest priority outrage. The spectacle of wealthy people freely purchasing luxury services is nothing new, though it is a perfectly worthy object of investigation (and an understudied phenomenon by academics themselves, ahem).
What is a problem, then? Brent Joseph Evans, an associate professor of public policy and higher education in Vanderbilt’s college of education and human development, began his career as an admissions officer at the University of Virginia. There, he sold the institution to New England boarding school students and teenagers in the Appalachian foothills.
The former group can pay $100,000 a year, even though many of them never make it into the Vanderbilts of the world in the first place. They will surely find their way somewhere.
But the last group? Professor Evans is concerned about their access to any school.
“We should care if they can get into a state university system at a low cost and find a well-paying career that can keep them in the middle class,” he said. “I think sometimes any tension over what elite colleges are doing takes us away from what we should care about as a society.”
