It was only a matter of time before a college would have the audacity to list its tuition at nearly $100,000 a year. This spring, we get our first look.
A letter to a newly admitted Vanderbilt University engineering student listed a total price — room, board, personal expenses, high-octane laptop — of $98,426. A student who makes three trips to Los Angeles or London from the Nashville campus during the year could hit six figures.
This impressive amount is an anomaly. Only a small fraction of college students will pay anything like that soon, and about 35 percent of Vanderbilt students — those who receive neither need-based nor merit-based aid — pay full list price.
But a few dozen other colleges and universities that reject the vast majority of applicants will probably reach that limit within a few years. Their willingness to wade through it raises two questions for anyone shopping for college: How did this happen, and can it be worth it?
Who Pays What
According to the College Board, the 2023-24 average list price for tuition, fees, room and board was $56,190 at private, not-for-profit four-year schools. At four-year public colleges, in-state students saw an average sticker price of $24,030.
It’s not what many people pay, though, not even close. As of the 2019-20 school year, according to federal data used by the College Board in a 2023 report, 39 percent of in-state students attending two-year colleges full-time received enough grant money to cover all their tuition and fees (though not their living expenses, which can make transitioning to school extremely difficult). 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.
These private colleges continue to provide huge discounts for people of all income types. A study by the National Association of College and University Business Officers found that private nonprofit colleges and universities cut their tuition prices by 56 percent off the rack during the 2022-23 school year.
Vanderbilt also provides discounts and its financial aid is extremely generous. This year, he announced that families with incomes of $150,000 or less would not pay tuition in most cases.
But more than 2,000 students there who don’t receive need-based or merit-based aid will soon pay $100,000 or more. Why does Vanderbilt need all this money?
Where the money goes
At some small liberal arts colleges with huge endowments, even $100,000 would not cover the average cost of educating a student, according to the schools. Williams College says it spends about $50,000 more per student than its list price, for example.
In other words, everyone gets a subsidy. Perhaps his list price should also be over $100,000 so that his endowment does not provide unnecessary assistance to wealthy families. Or, perhaps, such a high price would scare off low-income applicants who don’t realize they might be getting a free ride there.
According to Vanderbilt, its spending per undergraduate is $119,000. “The gap between the award and the 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 would meet me to break this number down or call to talk about it. But Vanderbilt’s financial statements offer clues about how it spends money. In fiscal year 2023, 52 percent of its operating expenses went to faculty, staff and student salaries and wages, plus 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 were 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 all-important higher education workers at colleges and universities have skyrocketed,” they said. “These are factors at the economy level. They have little to do with any pathology in higher education.”
Critics of the industry still believe a kind of administrative bloat has been created, driving up tuition with exorbitant wages. But what is bloat, really?
Administrators oversee compliance, such as laws that have allowed people with disabilities to get to and from college and prevent schools from discriminating against women. If we don’t like the arrangement, we can vote for different legislators.
Similarly, families in a free market can make alternative choices if they want fewer mental health professionals and their bosses, computer network administrators, academic advisors, or career counselors. And yet the first (discounted) question Vanderbilt Chancellor Daniel Diermeier answered at Family Weekend this past fall was whether Vanderbilt should invest even more in career counseling after the school’s five-point drop in the annual US News ranking.
Worth?
If many families aren’t exactly in line for a residential undergraduate education at a reduced rate, they still ask a lot of good questions about value. So is a $400,000 college education ever worth it?
It depends, and you knew the answer was coming, right?
Most college shoppers wonder about income scores, and it’s possible to search by undergraduate degree on the federal government’s College Scorecard website. This program-level data exists for graduates who are four years after graduation, although only for those who received any federal financial aid.
Vanderbilt biomedical/medical engineering majors have an average salary of $94,340 after four years. English language and literature majors earn $53,767.
Those are good results, but are they exclusive to Vanderbilt? “You could get an engineering degree at a state university that’s just as valuable as something you’d get at Vanderbilt,” said Julian Treves, a financial adviser and college expert whose newsletter updated me on the goings-on there.
I’ve spent a few days trying to get Vanderbilt’s associate provost for university enrollment, Douglas L. Christiansen, to talk to me and answer these questions clearly and at greater length, but to no avail. A representative of the university 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 the absence of a substantive response, I attended a group briefing for about 125 prospective students and asked there as well. The senior import official who received the question declined to answer. I’d never seen it 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 this question if the person is not absolutely necessary? Without publicly available, industry-wide quantitative data on quality — happiness scores, customer satisfaction, learning metrics, friendship performance, strength of career networks — list price alone serves as a mark of excellence, at least to some buyers.
And thousands of applicants meet the mark each year by volunteering to pay the list price, even though the school rejects the vast majority of applicants. Or maybe they volunteer precisely because Vanderbilt and schools like it reject the vast majority of applicants.
So a $100,000 list price is not our highest priority outrage. The sight of the rich freely purchasing luxury services is nothing new, even if it is a perfectly worthy object of scrutiny (and a phenomenon that has not been studied by academics themselves, ahem).
What is problem then? Brent Joseph Evans, 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 boarding school students in New England and teenagers in the Appalachian foothills.
The former team might be paying $100,000 a year, though many of them won’t be joining the Vanderbilts of the world in the first place. Surely they will find their way somewhere.
But this last group? Professor Evans is concerned about their access to any school.
“We should care if they get into a low-cost state university system and find a well-paying career that can keep them in the middle class,” he said. “I think sometimes any tension about what elite colleges are doing takes us away from what we should care about as a society.”
