April 25, 2025 • 16 mins
Tuition at US colleges and universities is higher than ever. But an exclusive new Bloomberg analysis reveals that the cost of a four-year degree is particularly burdensome for middle class students and their families.
On today’s Big Take podcast, Bloomberg’s Francesca Maglione and Paulina Cachero join David Gura to break down the real cost of attending the most selective colleges and universities in the US — and how that cost changes depending on how much a family makes.
Read more: Top Colleges Are Too Costly Even for Parents Making $300,000
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
More than three decades ago, not A Raja Viswanathan was
a student in India hoping to get a graduate degree
in mechanical engineering in the United States.
Speaker 1 (00:17):
I applied to a bunch of schools in the US
for my graduate studies from India and I got admission
into one of the Californian schools, actually to Stanford University.
Speaker 2 (00:30):
Not A Rajan got what seemed like the opportunity of
a lifetime, but then came the price.
Speaker 1 (00:35):
Tag for graduate studies. They said, all told, it will
come to fifty two thousand dollars, and at that time
it was more than our house itself. So even if
my father sold off the house and was prepared to
live in these streets, it would not be possible for
me to attend.
Speaker 2 (00:55):
His family couldn't foot the bill. So not A Rajan
chose a more affordable path. He got his Masters from
the University of Maryland and later an MBA from the
University of Michigan, two state schools, and for the last
thirty three years nat Rajan has lived in the US.
He and his wife raised their family in the suburbs
north of Los Angeles, today, he says, their after tax
(01:19):
take home pay is about one hundred and eighty five
thousand dollars. When it came time for their two sons
to go to college, they wanted to be able to
provide them every opportunity, but they'd also decided early on
they didn't want their sons to go into debt to
pay for college.
Speaker 1 (01:34):
For graduate studies, I can understand taking out a loan,
but for undergrad I want them to graduate loan free.
Speaker 2 (01:43):
But both boys had a prestigious and expensive private school
high on their lists, the University of Southern California.
Speaker 1 (01:50):
We kept an open mind, saying, if you get in,
then we will consider definitely. But because it is a
private schools how are we going to pay for it?
Was the question which was always lurking in the back
of our minds.
Speaker 2 (02:03):
Their older son wasn't accepted to USC. He ended up
going to UCLA last year. Their younger son, Ayush, got
some news.
Speaker 1 (02:11):
So he called us on the phone and he was
all excited and he said, diamond and I'm in. Of course,
there was a packet which I've been mail after that.
I still have the letter.
Speaker 2 (02:22):
That acceptance letter also contained other information that not a
Rajan says, dampened their excitement pretty quickly when.
Speaker 1 (02:29):
We saw that the estimated tuition plus living expenses came
to around ninety seven thousand dollars per year. Then we
knew that it was not something that we could accomplish
on our own, so it would be more than roughly
around fifty five percent of the tekon PI.
Speaker 2 (02:48):
The school did offer Ayush some financial aid five thousand
dollars a year.
Speaker 1 (02:53):
But ninety two to ninety seven thousand I didn't see
much of a difference.
Speaker 2 (02:57):
The family appealed, explaining that their older son was in
medical school and between his living expenses and what USC
was going to charge for Aush to go there, the
family would end up spending seventy percent of their take
home pay on the boys' education. But no luck.
Speaker 1 (03:13):
We had probably around five ten minutes of conversation at best.
Speaker 2 (03:19):
So not A Rajan and his wife began running the
numbers to see whether they could pay for USC. Ayusha's
college savings account certainly wasn't going to cover it.
Speaker 1 (03:27):
Now.
Speaker 2 (03:28):
Arajan took out a loan on his four oh one K,
but that's still wasn't going to be enough, they wondered,
what more they could do. Could they sell their home,
maybe move to a less expensive state. And as the
cost of college rises, middle class families all over the
US are asking these kinds of questions. I'm David Gera,
(03:49):
and this is the Big Take from Bloomberg News Today.
On the show, an exclusive Bloomberg analysis of the real
cost of attending the most selective colleges and universities in
the US and while staying in the state might not
be the most affordable option. Bloomberg's Paulina Ccerro and Francesca
(04:14):
Maglioni have been looking at the rising cost of higher
education in the US and what it means for students
and their families. Francesca says colleges and universities typically announce
what they call their sticker price around this time every year.
Speaker 3 (04:27):
What they look at is their tuition costs and additional
fees like books, room and board and things like that,
and so they call that the cost of attendance or
the sticker price. That number nowadays is ninety five thousand
dollars for some colleges, one hundred thousand dollars for others.
That price kind of scares a lot of people when
they see it, and colleges are always adamant about telling
(04:48):
people that with financial aid, most people don't actually.
Speaker 2 (04:51):
Pay that what percentage of students end up paying that
full sticker price.
Speaker 3 (04:55):
In reality, half of students pay that price. That's still
a lot of people. Well, when you're talking about ninety
five thousand dollars at some of these schools, when.
Speaker 2 (05:04):
You look at that sticker price, how do these colleges
and universities justify the cost being as high as it is.
Speaker 3 (05:09):
Colleges will say inflation has made the cost go up.
Speaker 1 (05:12):
For sure.
Speaker 3 (05:12):
COVID wasn't easy for these colleges as well, and they'll
say that that's what it takes to educate their students.
The way they justify the price is through financial aid.
That's how they say, we have these wealthy students that
can then help us educate these less wealthy students. But
they're reaching kind of a breaking point where even the
students that are considered wealthy in the college's eyes don't
(05:34):
feel like they can actually afford to pay that big
sticker price.
Speaker 2 (05:37):
I also asked Paulina how colleges and universities determine how
much financial aid to offer.
Speaker 4 (05:43):
So when students are applying for financial aid. Everyone uses
the application for federal aid culture. I remember that, yes,
So basically what happens is families put in information about
their finances, how much money their parents make, are they
from a home with parents that are together or divorced,
your home equity, any investments that you might have, to
(06:05):
try and create a picture of what this family's income
looks like. And then the fastest spits out a score
called the student eight index and gives that to schools. However,
different schools have their own financial aid offices that calculate
how they distribute aid in very different ways. And beyond
you know the different forms, each school has their own
(06:26):
formula for determining what family gets how much aid.
Speaker 2 (06:30):
There are all sorts of tools that help students and
families figure out how much college will cost. Paulina and
Francesca took two of them, a calculator called my Intuition
and another called Meadow, and use them to show how
financial aid gets distributed.
Speaker 4 (06:46):
Readers can go to our story and you can select
your income. We have eight income profiles ranging from seventy
five thousand dollars to four hundred thousand dollars and see
the college is stacked up against each other and how
much you would pay after financial aid and get arrange.
Speaker 2 (07:02):
So you look at it more holistically, So who's benefiting
from financial lad or getting most of it? And what's
the point at which it begins to kind of diminish
or go to zero.
Speaker 4 (07:11):
Basically, when you make seventy five thousand dollars household income,
you pay around ten percent of your income towards college costs.
But then once you hit one hundred and fifty thousand,
you start paying twenty percent of your total income. And
families making anywhere from two hundred thousand to four hundred
thousand are expected to pay the same financial burden. So
(07:33):
that's like twenty percent across the board.
Speaker 2 (07:35):
I asked this selfishly as a New Yorker in a
city that's very expensive to live in. Is that something
that they take into accounts or of what the cost
of living is like in a particular geography.
Speaker 4 (07:45):
So, actually, most schools don't make regional adjustments. So you
could be making three hundred thousand and for a family
in a Midwest town where I'm from, like Tulsa, Oklahoma,
you are pretty wealthy and probably have enough money left
over after your living expenses, maybe to pay for a
ninety five thousand dollars education, but three hundred thousand for
(08:06):
a family in New York, very different cost of living.
Speaker 2 (08:09):
All of this, Francesca says, leaves a lot of families
in the financial middle feeling squeezed.
Speaker 3 (08:15):
So the people that fall in the middle that didn't
get enough aid but then can't afford to pay the
full sticker price, those are the families that are really
feeling like they need to either take on loans or
squeeze their finances to really go to these colleges that
they've dreamed about going their whole lives.
Speaker 2 (08:30):
Conventional wisdom used to hold that for people on lower incomes,
public universities were the best option, with much lower sticker
prices for in state students than their private rivals. After
the break, why that's not necessarily the case anymore, and
why the data show it might be a better idea
for people from more modest backgrounds to aim for private schools.
(09:01):
Bloomberg's Paulina Ccerro and Francesca Maglione looked at what it
would cost students from families with a range of household
incomes to attend some of the most selective schools in
the country, both private schools and public universities.
Speaker 4 (09:13):
From those two analysis, surprisingly we found that public schools
can actually end up being more expensive because they have
less resources. A family making seventy five thousand dollars ends
up paying twenty three thousand dollars for a public in
state public education, whereas a private school that has a
lot of financial resources they would pay just eight thousand,
(09:34):
So they'd pay three times more at a public school.
Speaker 2 (09:36):
The ethos has been private school might be inherently unaffordable,
go for the in state school. But what you've found kind.
Speaker 4 (09:42):
Of, yeah, it totally it reverses that. But I mean
there's a little bit more nuance to the math. So
once you start making two hundred thousand dollars, a public
school actually does start to become cheaper because you know,
public schools overall, their sticker price tuition tops out around
thirty thousand dollars, right, whereas if you're looking at a
prestigious private school, you can be close to paying one
(10:04):
hundred thousand. So for families that make seventy five thousand
dollars to one hundred and fifty thousand dollars a public
school will be more expensive, but you know, if you
make two hundred thousand dollars or more, the public school
will be cheaper. So it's a really weird breaking point
and kind of surprising.
Speaker 2 (10:22):
Paulina and Francesca found a clear correlation between the size
of a school's endowment and how generous that college or
university is with its financial aid. If you're from a
low income family and you get into an ivy, you
get significantly more assistance, But Francesca says most applicants to ivys,
regardless of income, don't get in.
Speaker 3 (10:41):
These students are left to decide between a handful of
schools where up picking what school might give you the
best financial aid feels a little random, and students have
no idea how these schools calculate their financial aid, how
they land at these numbers, So it kind of feels
like Russian roulette deciding what school might be more affordable
on the line.
Speaker 2 (11:00):
In real terms, what does it mean for families who
are kind of convincing themselves of the worth of these
institutions and trying to make that math work. I mean,
we're talking about a pretty substantial percentage of income in
a lot of cases that would be going toward paying
for college or university.
Speaker 4 (11:16):
We actually did a project last year looking at the
return on investment of college degrees. We analyzed over fifteen
hundred schools, and that took into account, you know, the
factors that a lot of families are thinking about today,
which is, you know, how much am I actually going
to pay for that degree? How much debt will my
child have to take on, what opportunities will be available
(11:37):
to them given that brand name degree, and you know,
what is their earning potential after It's a really complicated
calculus because it's not just about the cost, because if
you go to a small school that's cheaper, if it
doesn't provide you the network that you need to get
that job or to get a higher wage, than doesn't matter.
Speaker 2 (11:54):
Did reporting this story change your sense of that story?
Speaker 4 (11:58):
Even like five ten years ago, whenever a student would
get into that Harvard or into their dream school, I
feel like often parents would say, you know, no matter
the cost, like this brand name degree is going to
be worth it. We'll take on whatever debt, We'll take
on a parent plus loan, do whatever, like this will
help you achieve the American dream and to climb the
social ladder. But I think these days, because people are
(12:21):
questioning the value of a college degree, it's a little
bit more difficult. Is the family willing to put themselves
in a huge financial burden where their child in a
huge financial burden for a college degree that they don't
know will work out. New grads today are facing kind
of a tepid labor market, and even if you come
from a Harvard or a Yale, that doesn't necessarily mean
that you'll get a job. That's just the reality of
(12:44):
the white collar labor market today. So I think the
conversations are a little bit more difficult, and there's a
little bit more of a reality check for many students.
You have these students that work really hard, and we're
told that they are expected or should go to the
best school that they possibly can. But when you get
your financial aid package and realize what a financial burden
that could be on your family. I don't know what
(13:05):
I would have done at seventeen at that time, but
it's a difficult kind of moral dilemma for kids to
be answering.
Speaker 2 (13:11):
It was a dilemma that's surprised not a Raja and
Viswanathan's son, I USh after he got into USC.
Speaker 5 (13:17):
I mean, of course I knew that college cost something,
but you know, it never really registered that that was
like a thing that I needed to consider when I
was making a choice of college. Like you know, I
guess I sort of assumed that because students were able
to go to these places, you know, I would be
able to go to these places.
Speaker 2 (13:38):
I Ush's parents tried to find a way to make
the numbers work, but the math was brutal, just like
back when not Aajen got into Stanford more than thirty
years ago.
Speaker 1 (13:47):
Does any of you going to be impossible for us
to foot the bill? It hurt me quite a bit,
was very very shocking for me to have to live
through that moment again.
Speaker 5 (14:05):
As a student. You spend so much time applying to
these universities, writing those essays, you know, getting letters of recommendation,
doing all of these things, and then you put in
all that effort, you get accepted, You tour the campus,
you really enjoy it. You're walking around envisioning yourself as
a student, and then you know that sort of ideal
(14:27):
being stopped by something that's more or less out of
your control is I mean, yeah, it stings quite a bit,
but the decision was a little easier for me because
I already had another great option UCLA, which was in
the same area.
Speaker 2 (14:44):
Is now studying neuroscience. Like his older brother, he wants
to become a doctor. In the meantime. To keep expenses low,
I usually lives in a triple a dorm room he
shares with two other students. He chose the school's most
affordable meal plan. His dad says that all Ayusha's college
costs are around thirty thousand dollars a year. That's a
(15:04):
third of what USC would have cost.
Speaker 5 (15:07):
A sticker shock. Seeing like the price of certain schools
can be quite daunting. But if I were to speak to, say,
a student who is considering to apply to these sort
of elite schools, even a middle class student who may
not get that much aid, that still might be very
expensive for them. I wouldn't say to discount applying to,
(15:29):
you know, an elite university or these kinds of places.
I'm just saying to consider the financial aspect of things,
and when you're signing on the dotted line, getting all
of your facts straight, and I think if you do that,
you're more than welcome to apply to these schools.
Speaker 2 (15:47):
This is The Big Take from Bloomberg News. I'm David Gura.
This episode was produced by David Fox and Rachel Lewis Krisky.
It was edited by Patty Hirsch and Craig Giemona. It
was fact checked by Adriana Tapia and mixed and sound
design by Julian Weller. Special thanks to Anne Joy. Our
senior producer is Naomi Shaven. Our senior editor is Elizabeth Ponso.
(16:08):
Our deputy executive producer is Julia Weaver. Our executive producer
is Nicole Beemster Boor. Sage Bauman is Bloomberg's head of Podcasts.
If you liked this episode, make sure to subscribe and
review The Big Take wherever you listen to podcasts. It
helps people find the show. Thanks for listening. We'll be
back tomorrow
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
More than three decades ago, not A Raja Viswanathan was
a student in India hoping to get a graduate degree
in mechanical engineering in the United States.
Speaker 1 (00:17):
I applied to a bunch of schools in the US
for my graduate studies from India and I got admission
into one of the Californian schools, actually to Stanford University.
Speaker 2 (00:30):
Not A Rajan got what seemed like the opportunity of
a lifetime, but then came the price.
Speaker 1 (00:35):
Tag for graduate studies. They said, all told, it will
come to fifty two thousand dollars, and at that time
it was more than our house itself. So even if
my father sold off the house and was prepared to
live in these streets, it would not be possible for
me to attend.
Speaker 2 (00:55):
His family couldn't foot the bill. So not A Rajan
chose a more affordable path. He got his Masters from
the University of Maryland and later an MBA from the
University of Michigan, two state schools, and for the last
thirty three years nat Rajan has lived in the US.
He and his wife raised their family in the suburbs
north of Los Angeles, today, he says, their after tax
(01:19):
take home pay is about one hundred and eighty five
thousand dollars. When it came time for their two sons
to go to college, they wanted to be able to
provide them every opportunity, but they'd also decided early on
they didn't want their sons to go into debt to
pay for college.
Speaker 1 (01:34):
For graduate studies, I can understand taking out a loan,
but for undergrad I want them to graduate loan free.
Speaker 2 (01:43):
But both boys had a prestigious and expensive private school
high on their lists, the University of Southern California.
Speaker 1 (01:50):
We kept an open mind, saying, if you get in,
then we will consider definitely. But because it is a
private schools how are we going to pay for it?
Was the question which was always lurking in the back
of our minds.
Speaker 2 (02:03):
Their older son wasn't accepted to USC. He ended up
going to UCLA last year. Their younger son, Ayush, got
some news.
Speaker 1 (02:11):
So he called us on the phone and he was
all excited and he said, diamond and I'm in. Of course,
there was a packet which I've been mail after that.
I still have the letter.
Speaker 2 (02:22):
That acceptance letter also contained other information that not a
Rajan says, dampened their excitement pretty quickly when.
Speaker 1 (02:29):
We saw that the estimated tuition plus living expenses came
to around ninety seven thousand dollars per year. Then we
knew that it was not something that we could accomplish
on our own, so it would be more than roughly
around fifty five percent of the tekon PI.
Speaker 2 (02:48):
The school did offer Ayush some financial aid five thousand
dollars a year.
Speaker 1 (02:53):
But ninety two to ninety seven thousand I didn't see
much of a difference.
Speaker 2 (02:57):
The family appealed, explaining that their older son was in
medical school and between his living expenses and what USC
was going to charge for Aush to go there, the
family would end up spending seventy percent of their take
home pay on the boys' education. But no luck.
Speaker 1 (03:13):
We had probably around five ten minutes of conversation at best.
Speaker 2 (03:19):
So not A Rajan and his wife began running the
numbers to see whether they could pay for USC. Ayusha's
college savings account certainly wasn't going to cover it.
Speaker 1 (03:27):
Now.
Speaker 2 (03:28):
Arajan took out a loan on his four oh one K,
but that's still wasn't going to be enough, they wondered,
what more they could do. Could they sell their home,
maybe move to a less expensive state. And as the
cost of college rises, middle class families all over the
US are asking these kinds of questions. I'm David Gera,
(03:49):
and this is the Big Take from Bloomberg News Today.
On the show, an exclusive Bloomberg analysis of the real
cost of attending the most selective colleges and universities in
the US and while staying in the state might not
be the most affordable option. Bloomberg's Paulina Ccerro and Francesca
(04:14):
Maglioni have been looking at the rising cost of higher
education in the US and what it means for students
and their families. Francesca says colleges and universities typically announce
what they call their sticker price around this time every year.
Speaker 3 (04:27):
What they look at is their tuition costs and additional
fees like books, room and board and things like that,
and so they call that the cost of attendance or
the sticker price. That number nowadays is ninety five thousand
dollars for some colleges, one hundred thousand dollars for others.
That price kind of scares a lot of people when
they see it, and colleges are always adamant about telling
(04:48):
people that with financial aid, most people don't actually.
Speaker 2 (04:51):
Pay that what percentage of students end up paying that
full sticker price.
Speaker 3 (04:55):
In reality, half of students pay that price. That's still
a lot of people. Well, when you're talking about ninety
five thousand dollars at some of these schools, when.
Speaker 2 (05:04):
You look at that sticker price, how do these colleges
and universities justify the cost being as high as it is.
Speaker 3 (05:09):
Colleges will say inflation has made the cost go up.
Speaker 1 (05:12):
For sure.
Speaker 3 (05:12):
COVID wasn't easy for these colleges as well, and they'll
say that that's what it takes to educate their students.
The way they justify the price is through financial aid.
That's how they say, we have these wealthy students that
can then help us educate these less wealthy students. But
they're reaching kind of a breaking point where even the
students that are considered wealthy in the college's eyes don't
(05:34):
feel like they can actually afford to pay that big
sticker price.
Speaker 2 (05:37):
I also asked Paulina how colleges and universities determine how
much financial aid to offer.
Speaker 4 (05:43):
So when students are applying for financial aid. Everyone uses
the application for federal aid culture. I remember that, yes,
So basically what happens is families put in information about
their finances, how much money their parents make, are they
from a home with parents that are together or divorced,
your home equity, any investments that you might have, to
(06:05):
try and create a picture of what this family's income
looks like. And then the fastest spits out a score
called the student eight index and gives that to schools. However,
different schools have their own financial aid offices that calculate
how they distribute aid in very different ways. And beyond
you know the different forms, each school has their own
(06:26):
formula for determining what family gets how much aid.
Speaker 2 (06:30):
There are all sorts of tools that help students and
families figure out how much college will cost. Paulina and
Francesca took two of them, a calculator called my Intuition
and another called Meadow, and use them to show how
financial aid gets distributed.
Speaker 4 (06:46):
Readers can go to our story and you can select
your income. We have eight income profiles ranging from seventy
five thousand dollars to four hundred thousand dollars and see
the college is stacked up against each other and how
much you would pay after financial aid and get arrange.
Speaker 2 (07:02):
So you look at it more holistically, So who's benefiting
from financial lad or getting most of it? And what's
the point at which it begins to kind of diminish
or go to zero.
Speaker 4 (07:11):
Basically, when you make seventy five thousand dollars household income,
you pay around ten percent of your income towards college costs.
But then once you hit one hundred and fifty thousand,
you start paying twenty percent of your total income. And
families making anywhere from two hundred thousand to four hundred
thousand are expected to pay the same financial burden. So
(07:33):
that's like twenty percent across the board.
Speaker 2 (07:35):
I asked this selfishly as a New Yorker in a
city that's very expensive to live in. Is that something
that they take into accounts or of what the cost
of living is like in a particular geography.
Speaker 4 (07:45):
So, actually, most schools don't make regional adjustments. So you
could be making three hundred thousand and for a family
in a Midwest town where I'm from, like Tulsa, Oklahoma,
you are pretty wealthy and probably have enough money left
over after your living expenses, maybe to pay for a
ninety five thousand dollars education, but three hundred thousand for
(08:06):
a family in New York, very different cost of living.
Speaker 2 (08:09):
All of this, Francesca says, leaves a lot of families
in the financial middle feeling squeezed.
Speaker 3 (08:15):
So the people that fall in the middle that didn't
get enough aid but then can't afford to pay the
full sticker price, those are the families that are really
feeling like they need to either take on loans or
squeeze their finances to really go to these colleges that
they've dreamed about going their whole lives.
Speaker 2 (08:30):
Conventional wisdom used to hold that for people on lower incomes,
public universities were the best option, with much lower sticker
prices for in state students than their private rivals. After
the break, why that's not necessarily the case anymore, and
why the data show it might be a better idea
for people from more modest backgrounds to aim for private schools.
(09:01):
Bloomberg's Paulina Ccerro and Francesca Maglione looked at what it
would cost students from families with a range of household
incomes to attend some of the most selective schools in
the country, both private schools and public universities.
Speaker 4 (09:13):
From those two analysis, surprisingly we found that public schools
can actually end up being more expensive because they have
less resources. A family making seventy five thousand dollars ends
up paying twenty three thousand dollars for a public in
state public education, whereas a private school that has a
lot of financial resources they would pay just eight thousand,
(09:34):
So they'd pay three times more at a public school.
Speaker 2 (09:36):
The ethos has been private school might be inherently unaffordable,
go for the in state school. But what you've found kind.
Speaker 4 (09:42):
Of, yeah, it totally it reverses that. But I mean
there's a little bit more nuance to the math. So
once you start making two hundred thousand dollars, a public
school actually does start to become cheaper because you know,
public schools overall, their sticker price tuition tops out around
thirty thousand dollars, right, whereas if you're looking at a
prestigious private school, you can be close to paying one
(10:04):
hundred thousand. So for families that make seventy five thousand
dollars to one hundred and fifty thousand dollars a public
school will be more expensive, but you know, if you
make two hundred thousand dollars or more, the public school
will be cheaper. So it's a really weird breaking point
and kind of surprising.
Speaker 2 (10:22):
Paulina and Francesca found a clear correlation between the size
of a school's endowment and how generous that college or
university is with its financial aid. If you're from a
low income family and you get into an ivy, you
get significantly more assistance, But Francesca says most applicants to ivys,
regardless of income, don't get in.
Speaker 3 (10:41):
These students are left to decide between a handful of
schools where up picking what school might give you the
best financial aid feels a little random, and students have
no idea how these schools calculate their financial aid, how
they land at these numbers, So it kind of feels
like Russian roulette deciding what school might be more affordable
on the line.
Speaker 2 (11:00):
In real terms, what does it mean for families who
are kind of convincing themselves of the worth of these
institutions and trying to make that math work. I mean,
we're talking about a pretty substantial percentage of income in
a lot of cases that would be going toward paying
for college or university.
Speaker 4 (11:16):
We actually did a project last year looking at the
return on investment of college degrees. We analyzed over fifteen
hundred schools, and that took into account, you know, the
factors that a lot of families are thinking about today,
which is, you know, how much am I actually going
to pay for that degree? How much debt will my
child have to take on, what opportunities will be available
(11:37):
to them given that brand name degree, and you know,
what is their earning potential after It's a really complicated
calculus because it's not just about the cost, because if
you go to a small school that's cheaper, if it
doesn't provide you the network that you need to get
that job or to get a higher wage, than doesn't matter.
Speaker 2 (11:54):
Did reporting this story change your sense of that story?
Speaker 4 (11:58):
Even like five ten years ago, whenever a student would
get into that Harvard or into their dream school, I
feel like often parents would say, you know, no matter
the cost, like this brand name degree is going to
be worth it. We'll take on whatever debt, We'll take
on a parent plus loan, do whatever, like this will
help you achieve the American dream and to climb the
social ladder. But I think these days, because people are
(12:21):
questioning the value of a college degree, it's a little
bit more difficult. Is the family willing to put themselves
in a huge financial burden where their child in a
huge financial burden for a college degree that they don't
know will work out. New grads today are facing kind
of a tepid labor market, and even if you come
from a Harvard or a Yale, that doesn't necessarily mean
that you'll get a job. That's just the reality of
(12:44):
the white collar labor market today. So I think the
conversations are a little bit more difficult, and there's a
little bit more of a reality check for many students.
You have these students that work really hard, and we're
told that they are expected or should go to the
best school that they possibly can. But when you get
your financial aid package and realize what a financial burden
that could be on your family. I don't know what
(13:05):
I would have done at seventeen at that time, but
it's a difficult kind of moral dilemma for kids to
be answering.
Speaker 2 (13:11):
It was a dilemma that's surprised not a Raja and
Viswanathan's son, I USh after he got into USC.
Speaker 5 (13:17):
I mean, of course I knew that college cost something,
but you know, it never really registered that that was
like a thing that I needed to consider when I
was making a choice of college. Like you know, I
guess I sort of assumed that because students were able
to go to these places, you know, I would be
able to go to these places.
Speaker 2 (13:38):
I Ush's parents tried to find a way to make
the numbers work, but the math was brutal, just like
back when not Aajen got into Stanford more than thirty
years ago.
Speaker 1 (13:47):
Does any of you going to be impossible for us
to foot the bill? It hurt me quite a bit,
was very very shocking for me to have to live
through that moment again.
Speaker 5 (14:05):
As a student. You spend so much time applying to
these universities, writing those essays, you know, getting letters of recommendation,
doing all of these things, and then you put in
all that effort, you get accepted, You tour the campus,
you really enjoy it. You're walking around envisioning yourself as
a student, and then you know that sort of ideal
(14:27):
being stopped by something that's more or less out of
your control is I mean, yeah, it stings quite a bit,
but the decision was a little easier for me because
I already had another great option UCLA, which was in
the same area.
Speaker 2 (14:44):
Is now studying neuroscience. Like his older brother, he wants
to become a doctor. In the meantime. To keep expenses low,
I usually lives in a triple a dorm room he
shares with two other students. He chose the school's most
affordable meal plan. His dad says that all Ayusha's college
costs are around thirty thousand dollars a year. That's a
(15:04):
third of what USC would have cost.
Speaker 5 (15:07):
A sticker shock. Seeing like the price of certain schools
can be quite daunting. But if I were to speak to, say,
a student who is considering to apply to these sort
of elite schools, even a middle class student who may
not get that much aid, that still might be very
expensive for them. I wouldn't say to discount applying to,
(15:29):
you know, an elite university or these kinds of places.
I'm just saying to consider the financial aspect of things,
and when you're signing on the dotted line, getting all
of your facts straight, and I think if you do that,
you're more than welcome to apply to these schools.
Speaker 2 (15:47):
This is The Big Take from Bloomberg News. I'm David Gura.
This episode was produced by David Fox and Rachel Lewis Krisky.
It was edited by Patty Hirsch and Craig Giemona. It
was fact checked by Adriana Tapia and mixed and sound
design by Julian Weller. Special thanks to Anne Joy. Our
senior producer is Naomi Shaven. Our senior editor is Elizabeth Ponso.
(16:08):
Our deputy executive producer is Julia Weaver. Our executive producer
is Nicole Beemster Boor. Sage Bauman is Bloomberg's head of Podcasts.
If you liked this episode, make sure to subscribe and
review The Big Take wherever you listen to podcasts. It
helps people find the show. Thanks for listening. We'll be
back tomorrow
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