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Rana
Foroohar: ‘We are now at a point where only a tiny sliver of the
population can afford to pay anything like these fees without taking on
massive debt, forcing their children to work full time while in school
or having three jobs themselves’ © AP I
started this week with a heavy heart, having signed the first of three
$20,000 checks for my daughter’s college tuition due this year. It’s
stunning to me that tuition alone at her school, as with many top
universities (and indeed, plenty of second-tier ones too), costs
$60,000. Thank God she’s living in an apartment this year, splitting a
$30,000 annual rent three ways, so my total bill for her school year
will be a mere $70,000, rather than the roughly $90,000 it would have
been if she were living in university housing and eating from a meal
plan (I’ve given her $2,000 for food for the next six months and told
her to experiment with veganism and maybe find a part-time job in a
coffee shop or restaurant with free meals). This
is insanity, full stop. And it has to change, because we are now at a
point where only a tiny sliver of the population can afford to pay
anything near these fees without taking on huge debts, forcing students
to work full time while in school (not a good idea, as it tends to
result in higher dropout rates and lower grades, which sort of defeats
the point of education) or having three jobs themselves (my own
strategy, which comes with carpal tunnel syndrome and a short temper). The
sticker prices of these schools are of course somewhat negotiable.
We’ve heard from friends that if you have a child that a school wants
for whatever reason (merit, diversity, sports, etc), fees can
miraculously change at the last minute. Many schools like to say that
aid is given only based on financial need, but anecdotally we’ve found
that universities have a variety of means of getting the kids that will
tweak their statistics in the right direction. It
reminds me of a particularly whopping healthcare bill (one of many)
that we received after my husband’s back surgery last spring. This one
was from a provider charging $192,543.02 for a hospital treatment (and
no, this wasn’t even the surgery itself). Cigna, our healthcare
insurance provider, came in and negotiated a $42,000 discount with the
doctor. What’s more, Cigna paid him only $4,142.16. We were told we owed
$146,400.86 out of pocket, which is NOT what we were told before the
surgery began. (On that note, if you are hospitalised in America, good
luck getting a clear understanding of what you’ll be billed for and
when; part of the dysfunctional healthcare market here is that nobody
knows the total price of care before you go in for it.) When I called to
question this, we were simply and bafflingly informed by the provider
that the additional bill would be dropped. I
can only assume that providers and insurers alike, in our wildly skewed
system, bid up the “official” cost of care, assuming that insurers and
providers and customers will duke it out later to bring it down, and may
the best man win. This is certainly what I understand to be the case
anecdotally from many friends and colleagues I’ve spoken to about the
process. I
bring up these two cases, of extortionate college fees and oblique
healthcare markets, because they are two of the critical reasons that
being middle class in America is increasingly out of reach for so many
people, even those who make good incomes. If the price of private
college is double the median income, and nobody knows how much good
healthcare will cost before you get the bill, or what you’ll really be
on the hook for in either case, how can markets work? |