How did we get to the point where some colleges can charge $100,000?

NASHVILLE, TENN. >> It was only a matter of time before a college would have the nerve to quote its cost of attendance at nearly $100,000 a year. This spring, we're catching our first glimpse of it.

One 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 making three trips home to Los Angeles or London from the Nashville, Tennessee, campus during the year could hit six figures.

This eye-popping sum is an anomaly. Only a tiny fraction of college-going students will pay anything close to this anytime soon and about 35% of Vanderbilt students — those who get neither need-based nor merit aid — pay the full list price.

But a few dozen other colleges and universities that reject the vast majority of applicants will probably arrive at this threshold within a few years.

According to the College Board, the average 202324 list price for tuition, fees, housing and food was $56,190 at private, nonprofit four-year schools. At four-year public colleges, instate students saw an average $24,030 sticker price.

That's not what many people pay, though, not even close. As of the 201920 school year, according to federal data that the College Board used in a 2023 report, 39% of in-state students attending two-year colleges full-time received enough grant aid to cover all of their tuition and fees (but not their living expenses, which can make getting through school enormously difficult). At four-year public schools, 31% paid nothing for tuition and fees while 18% of students at private colleges and universities qualified for the same deal.

Those private colleges continue to provide hefty discounts for people of all sorts of incomes. A National Association of College and University Business Officers study showed private nonprofit colleges and universities lowering their tuition prices by 56% from the rack rate during the 202223 school year.

Vanderbilt provides discounts, too, and its financial aid is extraordinarily generous. Earlier this year, it announced that families with incomes of $150,000 or less would pay no tuition in most instances.

Still, more than 2,000 students there who get no need-based or merit aid will soon pay $100,000 or more. Why does Vanderbilt need all of that money?

At a few small liberal arts colleges with enormous endowments, even $100,000 would not cover the average cost of educating a student, according to the schools. Williams College says it spends roughly $50,000 more per student than its list price, for instance.

In other words, everyone is getting a subsidy. Perhaps its list price should be more than $100,000 too, so that its endowment is not offering unneeded help to wealthy families.

According to Vanderbilt, its spending per undergraduate is $119,000.

“The gap between the price and cost of attendance is funded by our endowment and the generous philanthropy of donors and alumni,” Brett Sweet, vice chancellor for finance, said in an email.

No one at the school would meet with me to break this figure down or get on the phone to talk about it. But Vanderbilt's financial statements offer clues to how it spends money. In fiscal year 2023, 52% of its operating expenses went to faculty, staff and student salaries and wages, plus fringe benefits.

If many families are not exactly lining up for a cutrate residential undergraduate education, they're still asking plenty of good questions about value. So, is a $400,000 college education ever worth it?

It depends, and you knew that answer was coming, right?

Most college shoppers wonder about income outcomes, and it's possible to search by undergraduate major on the federal government's College Scorecard website. This programlevel data exist for alumni who are four years out from graduation, though only for those who received any federal financial aid.

Vanderbilt's biomedical/ medical engineering majors have median earnings of $94,340 four years out. English language and literature majors are earning $53,767.

Those are fine results, but are they exclusive to Vanderbilt?

“You could get an engineering degree at a stage flagship university that's just as valuable as something you'd get at Vanderbilt,” said Julian Treves, a financial adviser and college specialist whose newsletter tipped me off to the goingson there.

I spent a few days trying to get Vanderbilt's vice provost for university enrollment affairs, Douglas Christensen, to answer these questions, but I did not succeed. A university spokesperson sent me some generalities.

“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.