Continuing our review of some of the highlights on Lindsey Taylor’s thesis, we come to page 17.

Prior to this study of COFHE institutions, Hill and Winston wrote a paper focusing exclusively on Williams College that also addressed net prices relative to family incomes. They found that the percentage of quintile median family income paid at each quintile during the 2000-2001 school year at Williams, starting with the lowest, was as follows: 41 percent, 24 percent, 23 percent, 21 percent, and 21 percent. This regressive pricing changed dramatically the next academic year, when the percentage of quintile median family income paid, starting with the lowest quintile, was: 11 percent, 16 percent, 14 percent, 18 percent, and 20 percent.

By increasing grant aid, and thus reducing net price, Williams was able to change their pricing to be gently progressive. Over this two-year period, the students in the 95th income went from 21 percent to 20 percent, while the average overall student payment fell from 29 percent to 26 percent.

Comments:

1) The paper cited by Taylor is here. She also discusses a related work. Both papers look interesting, but I haven’t had a chance to go through them.

2) The abstract to the Hill and Winston paper notes “One usefully concrete number: the average student in the bottom twenty percent of the income distribution pays $1,683 while the full tuition is $32,470.” I think that “pays” here includes any loans taken out. In other words, the average student from the bottom quintile graduates with no more than $6,500 in total loans. I think that this is a fairly radical change from the 1980’s. As far as I can recall, there were plenty of Williams students in that era from poorer families who graduated with much more debt. Is that right?

3) I think that Morty played a major part in the decision to change Williams pricing. Now, to some extent, Williams had no choice but to do this since all its major competitors are actively recruiting less wealthy students. If Williams does not offer these students more grants and fewer loans, they will just go elsewhere.

4) In other words, although Taylor and Hill/Winston seem to talk about these changes in terms of redistribution (making tuition bills more “progressive”), I think that the real issue is not one of justice so much as competition. The people who ran Williams 20 years ago had similar political beliefs to those who run it today. But they didn’t worry too much about loading up some young Eph with a bunch of debt because they knew that that young Eph would, after graduation, have the opportunity to earn a bunch of money. (The fact that colleges colluded also removed any worry that the young Eph would find a better deal and go elsewhere.) Now Williams, if it wants to have any students from families with bottom 20% income, has no choice but to offer huge grants, even to a student who has every intention of becoming a rich investment banker.

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