| Today is college decision day — a the pivotal moment across the US when many high school seniors must let the colleges they were accepted at know if they will be attending. It would be an understatement to say higher education has changed since many of our readers were living in dorms. Costs are up, financial aid is different now, and many students are rethinking the value of a degree altogether. With this in mind, I thought this week it would be fruitful to talk about college costs with my colleague Francesca Maglione, who covers all aspects of higher education. She’s one of the authors of this recent story about how middle class familes are getting squeezed by the soaring cost of attendance at elite universities. Below is an excerpt of our conversation. Charlie Wells: Let’s dig into the numbers. How much does a four-year degree cost these days? Francesca Maglione: In some cases, families are paying around $95,000 a year now at elite colleges and universities when you include room and board, books and extra fees. So that’s close to $400,000 for a four-year degree. CW: What are universities doing to justify such high costs? FM: One way colleges rationalize extremely high sticker prices is that they say, ‘Most people don’t pay the sticker price. It actually depends on how much your family makes.’ They have these financial aid formulas that calculate what the actual cost would be for families. But these colleges are extremely secretive about their formulas. There are net price calculators that colleges have to put on their websites. They are intended to bring transparency to the process — a family puts in their information and gets a ballpark cost — but these are just estimates and, what’s more, a family could input the same information for one school and get a number that’s completely different at another school. It can feel like a black box. CW: One theme I have heard lately is people worrying they are ‘too rich’ to get financial aid. Who really gets aid, who doesn’t, and who is actually too wealthy to get it. FM: For our project, we were really interested in unpacking the thresholds colleges have for aid, the points at which a family has a low enough income to get a full ride, and the point at which families are ‘too rich’ for aid. What we found is that on average families that made $75,000 were expected to pay around 10% of their income or close to nothing. But then for families that were making $150,000, that financial burden jumped to 20% and inched to just above that level for families that made $400,000. So the real squeeze starts to happen around families that make $150,000 to $200,000. They are essentially expected to pay almost the same share of their income as a family that makes $400,000. On top of that, many of the families earning this much come from high cost-of-living areas where even a six-figure income isn’t necessarily going far, or leaving much left for college savings. CW: What’s the solution? I don’t see a world where colleges start dropping tuition dramatically. FM: Families in that lower-six-figure range need to be really smart. There are opportunities. We found a bigger range in estimations for financial aid for these families than for those in other brackets. Take Carleton and Colby, for instance. A family with an annual income of $270,000 could expect to pay between $31,100 and $67,900 at Carleton and between $34,600 and $75,400 at Colby. The nuances really start to matter in terms of how different colleges view your family’s financial situation. CW: Given this variance, does leveraging different offers between schools make sense? FM: Financial advisers would recommend families appeal if they feel like their calculation is off. Not every college is going to accept your appeal, but a case could be made if you have atypical assets, like a family business, or live in a high cost-of-living area, or anything that might be throwing off the calculations. And yes, I have heard of families negotiating different offers from one college to the next. CW: You’ve also done a lot of reporting on top colleges’ return on investment. And given that it’s decision day, I also want to end by asking about this common rule of thumb I’ve long heard, that the local state school is going to be cheaper than an out-of-state private college. Is that still true? FM: The dynamic has changed. That’s something really interesting that we found in our analysis. Your in-state public school being the more affordable option kind of depends on how much your family makes. For public schools, the cutoff for receiving aid is much lower because their sticker price is lower than at private schools. These schools also, in many cases, have smaller endowments and less room to give as much financial aid. So what we found is that if your family makes anywhere from $75,000 to $150,000, it might be cheaper to go to a private college if it has a higher allowance for giving you a full ride or free tuition or just more aid. CW: So I’m going to take it that shopping around, applying to more than one school, and checking some of these older assumptions would probably be a good idea? FM: That’s exactly right. Read More: Top Colleges Are Too Costly Even for Parents Making $300,000 — Charlie Wells P.S. Send questions about your own financial dilemmas to bbgwealth@bloomberg.net. We may get expert answers for you, and feature your question and the answer in an upcoming newsletter. Brent crude ended the month of April down the most since 2021. It dropped 16% in the period and is currently hovering around $60 a barrel. Oil has dropped on signs of more supply from the Saudi-led OPEC+ alliance and concerns about a slowdown in the world’s two largest economies due to current trade tensions. Tech stocks helped boost the Nasdaq. Microsoft on Wednesday reported stronger-than-expected quarterly sales and profit growth, suggesting customer demand for cloud services has held steady despite a wave of tariffs and economic turbulence. Meta also posted a strong earnings report which showed a beat on advertising sales. London Gets a Taste of New York’s Cut-Throat Real Estate Culture  The affluent area of Belgravia in central London. Photographer: Chris Gorman/Getty Images Europe When Marcus O’Brien brokered the sale of an £80 million ($102 million) mansion in London’s Kensington and Chelsea district last year, he pocketed at least a 20% share of the roughly £1.6 million commission UK Sotheby’s International Realty charged the seller. It’s a familiar practice among US realtors, but in London’s luxury housing market — dominated by a handful of firms that have been selling the city’s priciest property since the 1800s when Queen Victoria was on the throne — it represented a revolution. Read more about it all here. Adam Neumann’s Flow More Than Doubles Valuation, Eyes Eventual IPO  Photographer: Angus Mordant/Bloomberg The former WeWork chief executive officer raised more money for his new residential real estate company Flow in a funding round that values the business at roughly $2.5 billion, according to people familiar with the matter. Flow secured more than $100 million from investors including a16z, according to the people, who asked not to be identified discussing financing details. Neumann is also exploring longer-range plans for the business. “I’m sure this is a company that we could take public one day,” Neumann said in an interview for Bullish with Sonali Basak, an upcoming Bloomberg Originals series. On timing, “we don’t need to rush.” This week, we’re looking for people who are in the US and applying to jobs in Europe in hopes of making a transatlantic move. Some of our best journalism at Bloomberg Wealth comes from your own stories and we want to hear from you, your friends or clients. Please email bbgwealth@bloomberg.net if you’d like to get in touch. | 
