Southport Brownstone Sells for $300K Under 2006 Purchase Price: 3847 N. Janssen
We last chattered about this 4-bedroom vintage brownstone at 3847 N. Janssen in Southport in February 2010 (although some of you disputed whether it was, in fact, a brownstone).
See our prior chatter and exterior picture here.
After nearly a year on the market, it finally sold for $300,000 under the 2006 purchase price.
In our February chatter, some of you thought it would sell in the $800,000 range (after first being listed for nearly $1.35 million in 2009) but some also thought closer to the low $900,000s.
It seemed some of you guessed right as it closed for $925,000.
The house, built in 1907, had been renovated in 2005.
The bathrooms were stone and the kitchen had upgraded stainless steel appliances and cabinets.
The house, in the coveted Blaine school district, also had a 2-car garage and central air.
Jennifer South at Dream Town Realty had the listing.
3847 N. Janssen: 4 bedrooms, 3.5 baths, 2 car garage
- Sold in July 1997 for $300,000
- Sold in September 2004 for $600,000
- Sold in June 2006 for $1.225 million
- Originally listed in May 2009 for $1,349,900
- Reduced several times
- Was listed in February 2010 for $1,099,000
- Sold in April 2010 for $925,000
- Taxes of $13,282
- Central Air
- Bedroom #1: 15×13
- Bedroom #2: 11×11
- Bedroom #3: 20×12
- Bedroom #4: 12×8 – lower level
wow. and yeah it isn’t a brownstone. this means the market isn’t dead right?
Market was never dead, just couldn’t be seen by many!
For those of you chatterful, does the alley-way on the side benefit or hurt this listing? I see it as a positive and a negative, but curious about ya’ll….
Is the elsuive “corner” unit, better or worse?
Initially listing it for $425,000 more than it sold for is what I see as interesting. How can you be that far off?
Alley is a negative, IMO.
Noise, graffiti, smell on a hot day from garbage trump the sunlight you get from the added exposure.
50% plus down payment; $417k mortgage.
“Alley is a negative, IMO.
Noise, graffiti, smell on a hot day from garbage trump the sunlight you get from the added exposure.”
Agreed. But it does depend, a bit, on the hood and the alley neighbors. The condos (to the east) here push it more negative, for me.
I would prefer an actual corner, in the city (assuming 2 non-busy streets), but not in the burbs.
The alley corner does multiple your gator-spotting options from your GatorDeck, tho.
that is not a brownstone
that is a brick house
Brick House – http://www.dailymotion.com/video/xy997_the-commodores-brick-house_music
alley is a definite negative in my opinion. Surprised that this went for above 900K.
“Surprised that this went for above 900K.”
I’m not, as (1) there are lots of people who don’t adequately consider the downsides of the alley location until the garbage trucks drive by, (2) it’s still “cheap” for a reno’d SFH in Blaine and (3) It’s what I called in Feb. Somewhat surprised they ate that big a loss that quickly, but I guess it just came out of market returns from the time of original list.
My opinion is this person anchored to the June 2006 transaction price which was entirely invalid IMO. They overpaid for this by at least 300k.
I went and saw an this as an open house, this place sucks. It was cheaply renovated and I can’t believe it went for as much as it did. Listing it for $1.3m was insane and they are lucky they got what they did!
The “free rent approach” in the NYT:
http://www.nytimes.com/2010/06/01/business/01nopay.html?src=me&ref=homepage
HD and Bob,
you guys will love this article
http://finance.yahoo.com/college-education/article/109701/placing-the-blame-as-students-are-buried-in-debt?mod=edu-collegeprep
These struggling students should have “consolidated their debt” during the big housing bubble years and refinanced all of that non-bankruptable student loan debt into a subprime mortgage which they could just walk away from.
Hahah. . . Groove I read that article earlier, and all it did was make me think of cribhaters.
Cheers all. . .
(BTW Mocha you rock only slightly less than the Commodores.)
So all I need to do to walk away from my wife’s 200k in med school debt is hop in the Delorian and get some no doc HELOC and send the keys to the house back to the bank? Got it. Fire it up, Doc…
Hindsight is 20/20 and if I knew then what I knew now…..
“Pete on June 1st, 2010 at 8:16 pm
These struggling students should have “consolidated their debt” during the big housing bubble years and refinanced all of that non-bankruptable student loan debt into a subprime mortgage which they could just walk away from.”
That bubble is bursting as I type…
“Groove77 on June 1st, 2010 at 7:56 pm
HD and Bob,
you guys will love this article
http://finance.yahoo.com/college-education/article/109701/placing-the-blame-as-students-are-buried-in-debt?mod=edu-collegeprep“
From referenced article:
“But what was Citi thinking, handing over $40,000 to an undergraduate who had already amassed debt well into the five figures? This was, in effect, a “no doc” or at least a “low doc” subprime mortgage loan.”
This irresponsible journalist has no idea what Citi was thinking, or at least won’t connect the dots by placing their sentences in proper order:
“It would be difficult in any event because federal bankruptcy law makes it nearly impossible to discharge student loan debts.”
Citi understands that education loans, even private ones, are near impossible to discharge. What was Citi thinking? The reporter even asked this question after explaining Citi’s context? The author has already told us–they are thinking they are going to make money off of loans that are basically risk free, or close enough (timing of payments is guaranteed but anything short of the death of the debtor means they will at some point be repaid).
Yet the author is trying desperately to paint this as a picture of evil Citi and distance the reality from the problem: this was excessive government intervention.
Middle America wanted cheap financing for such Mom & Pop & Apple Pie things as Mortgages & Education Loans. Uncle Sam stepped in to be the guarantor of such loans, bowing to voter pressure. Financing costs dropped, for sure.
But most voters were short sighted and/or stupid: they never realized subsidizing the financing aspect of these two goods might actually drive up the equilibrium price of said goods. So the good prices ROSE, significantly so.
And doesn’t middle America consider housing and higher education an entitlement? Add healthcare to the mix.
The entitlement minded American middle class deserves to be exterminated, or in any case shrunk down. With dumb voters equals dumb outcomes. No messianic grandiose leader who embodies whatever traits the media elite like can save Americans from the economic trench they have dug themselves.
Only decades (and growing daily) of hard work and fiscal thrift. Unfortunately our government doesn’t see it that way.
Wheres my Cash for Clunkers or Cash for Appliances or Cash for Pizza?
F*$& the plebs. They actually deserve this. Short sighted people don’t deserve a functioning, efficient government. They are too greedy and their greed prevents such things.
“Everyone should goto college” (regardless of cost/price) or (almost) “everyone should own a home.” haha yeah thats worked out real well hasn’t it? Broad, worthless policy judgements & platitudes. Hell maybe one day you’ll even find Bob kissing a baby that isn’t his if I actually decide to run for office.
“So all I need to do to walk away from my wife’s 200k in med school debt is hop in the Delorian and get some no doc HELOC and send the keys to the house back to the bank? Got it. Fire it up, Doc…”
HD talks all the time about his theoretical “what-if” time machine and doing just that.
But honestly if you could predict the future _that accurately_ why the need for higher education? I’d rather be at home daytrading with strippers serving me iced cold beverages of choice.
Also apparently some professional fields look poorly on a bad credit report. (Non-small) business doesn’t happen to be one of them.
While each city has it’s own definition of what a brownstone is, in the Chicago market, this would in fact be considered a brownstone.
By NYC definitions (particularly those located in Brooklyn), it would be an attached row house, 4 or 5 stories tall and have it’s own stoop with 5 or so stairs leading to a private entrance. Also there will be a garden level with it’s own entrance (servants or service entrance) most of which are now seperate rental or in-law units.
From the always reliable Wiki (sarcasm) here is the def:
“In Chicago, a brownstone typically refers to a free-standing house, originally built for a single family, clad in brownstone. While many Chicago brownstones have subsequently been split into multiple rental or condominium units, many others remain single-family homes. These houses attract the young and newlyweds. Due to varieties in stone color, some Chicago dwellings are called “graystones”.
Regardless of the correct terminology (like the always questionable neighborhood boundries) it did sell and for what it is, it was priced right. It seems this level of the market is not dead…limping along, but not yet dead.
#
skeptic on June 1st, 2010 at 1:43 pm
Alley is a negative, IMO.
Noise, graffiti, smell on a hot day from garbage trump the sunlight you get from the added exposure.
Don’t forget the traffic and the horn-tapping as they exit the alley, day and night, in case of pedestrians.
I am happy for the sellers. The house will look even more dated in 5 years and will require financial input to keep it current. That is the problem with minimal, run of the mill interiors.
“The house will look even more dated in 5 years and will require financial input to keep it current. That is the problem with minimal, run of the mill interiors.”
Um, it’s also the problem with extremely expensive interiors. Or did you not see the Crown’s penthouse in the Olympia Centre? Very not minimal, very not run of the mill, *extraordinarily dated*. What you say is true of almost any interior in a home that’s around $1mm.
Bob: “They overpaid for this by at least 300k.”
Pass the pipe, bobbo, cuz that’s some good stuff you’re smokin’.
wow that view alone is worth 300k
8)
crap, wrong thread I meant that for the 1629 S. Prairie…
ps: Link to pix of the Crown penthouse:
http://www.chicagomag.com/Radar/Deal-Estate/December-2007/On-the-MarketaCrown-Penthouse-at-Chicagoas-Olympia-Centre/Crown-Penthouse-at-Chicagos-Olympia-Centre-Gallery/
LOL She went in hock $100K to get an “interdisciplinary degree in religious and women’s studies.” Big surprise that THAT didn’t pay off.
“you guys will love this article
http://finance.yahoo.com/college-education/article/109701/placing-the-blame-as-students-are-buried-in-debt?mod=edu-collegeprep“
Yeah, $27,5000 a year after taxes sounds about right for an interdisciplinary degree in religious and women’s studies. I’m not sure what this girl was thinking, or even if she was.
The question is do we as a society want to make teenagers and early 20 somethings debt slaves for life for stupid financial decisions they made in the past.
“The question is do we as a society want to make teenagers and early 20 somethings debt slaves for life for stupid financial decisions they made in the past.”
We, as a society, have decided that they’ll be debt slaves for stupid financial decisions made by the baby boomers, so why shouldn’t they be responsible for their own stupid decisions, too?
No, bail out the students. How can they consume goods and buy homes if they’re giving a disproportionate amount of income to auntie sallie?
“anon (tfo) on June 2nd, 2010 at 9:25 am
“The question is do we as a society want to make teenagers and early 20 somethings debt slaves for life for stupid financial decisions they made in the past.”
We, as a society, have decided that they’ll be debt slaves for stupid financial decisions made by the baby boomers, so why shouldn’t they be responsible for their own stupid decisions, too?”
“What you say is true of almost any interior of a home around 1 million”
Not at all: there is trendy decorating which can be affordable for some people who value that (no matter the level) i.e. Crown Penthouse and then there is trendy decorating that we are told we should do for re-sale that looks dated all too soon (granite and stainless steel, etc). A well-apponited home should have at its core some timeless features so it will not seem out-dated so quickly. Then again, most trendy features fall apart quickly and need to be replaced. Planned obsolescence or throw away culture chic.
“No, bail out the students. How can they consume goods and buy homes if they’re giving a disproportionate amount of income to auntie sallie?”
I am really tired of hearing those who haven’t paid off their student loans whinging about needing a bailout from their own decisions. Is the increasing cost of higher education ridiculous? Yes. Should something be done about it? Yes. Is the answer a perpetual bailout of everyone who over-borrowed and now wants to pay less than the principal back? Absolutely not.
Fix the future cost problem first, then writedown existing debt; otherwise we’ll just have to do it again in 5 years when the next batch of over-privileged, over-leveraged, under-marketable graduates realizes that paying back their loans means they can’t live in EsEff and fly to NYC regularly and have all the latest Apple products and have a job with flexible hours that they really, really like and rock’n’roll every night and party every day.
“The question is do we as a society want to make teenagers and early 20 somethings debt slaves for life for stupid financial decisions they made in the past.”
Wrong, babe.
The REAL question is, do we as a society want to our whole population, innocent or guilty, pay for the stupid financial decisions some people made in the past? Many penniless students space their education over many years in order to pay the tuition without incurring massive debt, thus losing out on many career opportunities in their youth. Many others have to delay their educations for decades.Shall these people have to pay to bail out their brethren who borrowed to the hilt?
I made a large number of stupid financial decisions in my youth, and I had to pay for them all, mostly over many years. No one else had to pay them, so why should I have to pay for decisions made by today’s youth- especially since borrowing up to my eyeballs for college is not one of the mistakes I made?
If we begin forgiving student loan debt in addition to bailing out banks and indirectly subsidizing buried borrowers via forgiveness for the tax liability on short sales, as well as the subsidies for FHA, FNMA, GNMA, and FMAC, then we might as well just have a National Jubilee and totally dissolve our financial system- which we seem to be in the process of doing at any rate.
Discharge is the way to go. Allow discharge. Make a bad decision, file bankruptcy. Easy come, easy go. Make it more difficult like i.e. more than 8 years out of school, etc. Holding 18-22 year olds accountable for tens of thousands of dollars in debt for the rest of their lives is ridiculous. IT takes two to tango and the banks should ‘take it’ if you know what I mean. Moreover, you forget that student loans are onerous and borrowers have no consumer credit protections. The interest rates (for older and also for private loans) are higher than some credit cards; they can charge interest on interest making it a compounding debt, they can randomly charge ‘fees’ not listed in the promissory note for default. For example, Sallie Mae charges a 25% default fee for going into default. Nowhere in the prom note does it say that they can do that but they do it anyways. Interest continually accrues, and students will never ever earn enough money to pay off the debt. The strawberry pickers who bought the $700k house on a $30k a year salary can just walk away from their bad decisions when they realize they can never repay the debt – what’ so fundamentally different about the women’s studies major who can walk away from repaying her worthless degree when she realizes that she can never repay the debt? It’s the same thing.
“#anon (tfo) on June 2nd, 2010 at 9:42 am
“No, bail out the students. How can they consume goods and buy homes if they’re giving a disproportionate amount of income to auntie sallie?”
I am really tired of hearing those who haven’t paid off their student loans whinging about needing a bailout from their own decisions. Is the increasing cost of higher education ridiculous? Yes. Should something be done about it? Yes. Is the answer a perpetual bailout of everyone who over-borrowed and now wants to pay less than the principal back? Absolutely not.
Fix the future cost problem first, then writedown existing debt; otherwise we’ll just have to do it again in 5 years when the next batch of over-privileged, over-leveraged, under-marketable graduates realizes that paying back their loans means they can’t live in EsEff and fly to NYC regularly and have all the latest Apple products and have a job with flexible hours that they really, really like and rock’n’roll every night and party every day.”
“A well-apponited home should have at its core some timeless features so it will not seem out-dated so quickly.”
Show me an example. The theory is fine–I agree with the theory–I need to see what you deem to be “timeless features” that don’t need to be updated.
As far as kitchen design–If not granite and SS, what? Corian and White? Laminate and Black? Concrete (ha!) and Cabinet front? What’s the “timeless” material choice that won’t look dated in 10 years? Plain white? Italian-designer? Ikea? There certainly is blank slate styling that is relatively easily updated, but that’s not something that doesn’t “require financial input to keep it current” — it’s the antithesis, okay specifically b/c it is NOT current.
Bathrooms are easier to differentiate, and I agree that the ones in this house are very of-the-mid-00s and would have been better in a less “current” styling.
“what’ so fundamentally different about the women’s studies major who can walk away from repaying her worthless degree when she realizes that she can never repay the debt? It’s the same thing. ”
Can’t give back the degree. That’s a “fundamental” difference.
It might go against your fundamental core to allow discharge of student loans but we as a society are paying dearly for creating a entire sub-class of indentured servants. They aren’t buying cars, they aren’t buying homes, they aren’t paying child support. They aren’t investing, they aren’t accumulating assets, they’re just paying part of the interest on the student loans that accrue every month for the rest of their lives. Meanwhile some banker who lobbied congress to make student loans non-discharable lives in his nice house, with a new car, spending the proceeds of his piece of his $700 billion bailout.
“IT takes two to tango and the banks should ‘take it’ if you know what I mean.”
Yes I do. When I was a frosh at UIUC credit card companies were getting kids to sign up for 2 liter bottles of Coke. Pitiful. If that’s your business model, you deserve to share the pain.
Yeah but the degree is worthless. She makes $27,000 a year or whatever.
Just like sometimes the house you give back to the back is worth far less than the principal balance on the loan.
The south, west, and inner suburbs are filled with homes that had $200k mortgages that are now selling in the $80’s and $70’s.
Banks need to pay for bad lending decisions. The students are are paying dearly too. LIke i said, difficulty finding life partners, not able to accumulate assets, can’t buy homes, cars, or consume (70% of the economy), balances that NEVER go down, no right to fight the debt in court, constant hounding by debt collecters. Meanwhile the bankers and the school administrators are earning hunderds of thousands of dollars off the backs of already overburndened 20 year olds. Fuck ’em. Let the bankers and academics get real jobs the borrowers – let them live off $27,000 a year and see how they like it.
“anon (tfo) on June 2nd, 2010 at 10:01 am
“what’ so fundamentally different about the women’s studies major who can walk away from repaying her worthless degree when she realizes that she can never repay the debt? It’s the same thing. ”
Can’t give back the degree. That’s a “fundamental” difference.
“
The stupid decisions were not made solely by teenagers and 20-somethings. Their PARENTS were parties to these decisions too.
“The question is do we as a society want to make teenagers and early 20 somethings debt slaves for life for stupid financial decisions they made in the past.”
@ anon(tfo)
agreed, but first I’d say universities need to stop offering degrees that have very low prospects of any real-world application.
Law school-grads, accounting BAs, MBAs, etc are having huge difficulties getting gainful emplaoyment. Let alone any demographic ‘studies’ degrees. What do you do with that? this woman is working for a photographer in a capacity I’m guessing doesnt actually use her degree fully.
“It might go against your fundamental core to allow discharge of student loans but we as a society are paying dearly for creating a entire sub-class of indentured servants. ”
Please. The day after you pay your loans in full, you’ll change your tune. You just want something for free, just like me and everybody else. You decry people who overspend on houses, cars, lifestyle, but have a complete blindspot for people who overspend on “education” (I don’t include you in that class; you got f’d by the dysfunctional legal education market).
And this issue has some traction b/c there are so many knuckleheads like Ms. Munna who just *must* go to an extremely expensive school to study something unattached from any career and then go be a “creative” (ie, something that doesn’t require any degree and doesn’t pay much) in an extremely expensive city, while there are so many more who instead choose to go to a school they can afford, major in something related to a career and then pay off their much smaller borrowings living in a much smaller city. You’re looking to bailout *exactly* the sort of person you find foolish if the debt financed a house, rather than (basically useless, lifestyle aggrandizing) education
“When I was a frosh at UIUC credit card companies were getting kids to sign up for 2 liter bottles of Coke. Pitiful. If that’s your business model, you deserve to share the pain.”
No problem with the CCs sharing the pain; but no one was using soda and other stupid crap to entice kids to finance their tuition.
Those who live responsibly every day now have to support those who choose not to.
Where is my bailout? Why cant I get free stuff, too?
YOu know what? YOu guys changed my mind. Let’s just get rid of bankruptcy alltogether. and while we’re at it, let’s bring back debtor’s prisons. That’ll teach those stupid debtors never to borrow again. Let’s make the government force people to work to repay their student loan debt. And let’s imprision their family members and children too while we’re at it. Work 16 hours a day for a year and MAYBE we’ll let your mother and father out of debtor’s prison. Those banks were nice enough to make students the middle men between themselves and the universities, that’ll show them never to be the middle man again.
“And this issue has some traction b/c there are so many knuckleheads like Ms. Munna who just *must* go to an extremely expensive school to study something unattached from any career and then go be a “creative” (ie, something that doesn’t require any degree and doesn’t pay much) in an extremely expensive city, while there are so many more who instead choose to go to a school they can afford, major in something related to a career and then pay off their much smaller borrowings living in a much smaller city. You’re looking to bailout *exactly* the sort of person you find foolish if the debt financed a house, rather than (basically useless, lifestyle aggrandizing) education”
“agreed, but first I’d say universities need to stop offering degrees that have very low prospects of any real-world application. ”
What needs to change are (1) uselessness of HS education, (2) presumption of “necessity” of BA/BS for all sorts of jobs, (3) more, useful, 2 year post-secondary programs, tied in with HS being a genuinely useful education, (4) Most colleges/Unis trying to be all things to all students, (5) stupid growth of professional schools (other than Med–not enough med schools, actually)–B-School should be one year; Law school should be 1-1.5 with 1.5-2 year “apprenticeship” period before the Bar.
The problem is that there are way too many universities offering useless degrees and little job prospects, but yet still charge the same amount to attend as schools where you at least have a fighting chance for decent employment. The student loan industry is a mirror example of what happen with housing as the availability of debt has inflated pricing. It would cost no where near what it does to attend college if student loans weren’t so readily available.
or in short, society/the schools need to stop thinking that everybody can have an “above average” lifestyle & career.
“or in short, society/the schools need to stop thinking that everybody can have an “above average” lifestyle & career.”
But what percent of Americans have a 4-year degree (or more)? Less than 30%. So the numbers support that (false) view.
“The student loan industry is a mirror example of what happen with housing as the availability of debt has inflated pricing. It would cost no where near what it does to attend college if student loans weren’t so readily available.”
In part. So has the availability of various sorts of financial aid and the ability/willingness of more people to pay rack rate for various schools–NYU would charge less if there were no one with the means to pay cash willing to pay full tuition/r&r/etc at the current asking rate. This then screws the in-betweeners (which is most people)–those with enough resources to not get much Aid, but not enough to actually pay cash.
“YOu know what? YOu guys changed my mind. ”
Given this is your go to rhetorical device, perhaps you should get a refund, HD.
(kidding)
“It would cost no where near what it does to attend college if student loans weren’t so readily available.”
Bingo. Easy loan money is a huge factor in the rampant tuition inflation over the past 20 years. And now that the gov’t has completely taken over the student loan market the problem will likely only get worse.
“It would cost no where near what it does to attend college if student loans weren’t so readily available.”
Of course the costs of going to college have absolutely nothing to do with the costs of employees’ salaries; journals and books; construction; electricity; gas; postage; vehicles; maintenance; food; paper; copy machines; widespread use of computers; medical devices; teaching technologies; travel; or memberships in academic organizations.
And, BTW, tell me what impact the declining percentage of assistance from states to their public universities has had an impact on the cost of tuition
Take a look at this article from the .Badger Herald at: http://badgerherald.com/news/2010/04/07/as_state_funding_fal.php
“State appropriations per student across the country fell 5.7 percent in 2008-09 in inflation-adjusted dollars. The $7,953 per student that states provided was 12 percent lower than a decade earlier, according to The College Board’s 2009 report.
State investments in higher education have declined by $52.3 billion since 1980, or 46 percent, according to a report from Postsecondary Education Opportunity, an independent policy research group.
Significant hikes in tuition have been a natural response at schools around the country and recently incited protests on many American campuses.
Despite increases in tuition, public colleges and universities are struggling to fill the void left by state disinvestment. Sweeping cuts in programs and expenditures have been unavoidable.
Striving to maintain the American tradition of excellence in public education, more and more schools are turning to the private sector to fill growing budget gaps.
With financial models that are beginning to look more like private institutions than public universities, administrators and policy officials are beginning to question state regulation of public higher education institutions.
On Wisconsin with less state support
The state of Wisconsin is no exception. Decreases in state funding for the University of Wisconsin System over the last 10 years have left students and their families bearing the brunt of rising educational costs.
By some accounts, Wisconsin has led the charge in states’ disinvestment in higher education.
According to the PEO report, Wisconsin’s investment efforts since 1980 have fallen by 54.3 percent, putting it in the top 10 worst in the country.
“The relative burden of who is paying has certainly shifted to some degree from state taxpayers to students and families,” President of the Wisconsin Taxpayers Alliance Todd Berry said.
The state share of the total UW System budget has fallen 10 percentage points since fiscal year 1999-00. During the same period, tuition and fees’ contribution to the overall budget have risen by about 7 percentage points, according to state Legislative Fiscal Bureau and UW System records.
While Wisconsin’s flagship university maintains the second cheapest in-state tuition in the Big Ten, published in-state tuition and fees have increased from $3,791 in 2000-01 to $8,314 this academic year, according to the UW 2009-10 Data Digest. Tuition and fees for non-residents have grown by almost $9,000 over the same period. “It used to be that students about 10 years ago paid a little more than a third of their own educational costs and the state subsidized the other two-thirds … today, students are paying about 60 percent of the cost,” UW System spokesperson Dave Giroux said.
A changing UW student body is showing the effects of this shift. Students from lower income brackets have become less represented on the UW campus in recent years, according to Joanne Berg, vice provost for enrollment management.
“We are admitting those students from lower income brackets, but the fact is we don’t have the money to fund all of their tuition,” Berg said.
According to the executive summary of the Madison Initiative for Undergraduates, the university falls at least $20 million short each year of meeting students’ demonstrated need, and that shortfall is growing.
Efforts have been made at the university level to change this, however. Through a differential tuition increase associated with MIU, the university will use $10 million of the increased revenue for a need-based financial aid fund. This amount is expected to be matched by the UW Foundation.
Federal assistance makes up the vast majority of financial aid available to students, accounting for 74.5 percent of the total aid received by Wisconsin residents in 2008-09, according to a report from the State of Wisconsin Higher Education Aids Board.
The Student Aid and Fiscal Responsibility Act — which was recently passed as part of the Health Care Reconciliation bill — will likely increase federal assistance even further by revamping the Pell Grant and direct lending programs.
Nonetheless, there remains a large portion of unmet financial need for Wisconsin students.
In 2008-09, there was $675 million of unmet need for Wisconsin residents, according to the Education Aids Board report.
More than 68 percent of the average cost of education at a UW System school is not covered by the expected contribution of students and their families.
Of those who do choose to assume the cost of attending UW, many are leaving to start their careers with double-digits of debt hung over their heads.
Nearly half of all UW undergraduates graduated with some sort of debt last year, a 5 percent increase from a decade earlier. Moreover, the average total debt of these students has grown from $15,140 in 2000-01 to $22,858 in 2008-09, according to the UW Data Digest.
Chynna Haas, UW senior and president of the Working Class Student Union, said the loans she does get as part of her financial aid package through the university far from alleviate the burden of the rising cost of tuition.
“I’m an in-state student,” Haas said. “My parents have lived here their whole lives; they have paid taxes here their whole lives, and I’m still $20,000 in debt and working three jobs to get through school.”
Students are not the only ones feeling the effects of state disinvestment, however. Program and expenditure cuts are also impacting faculty and administrators.
Along with other state workers, UW employees are required to take eight unpaid furlough days this year, the equivalent of a 3 percent reduction in pay, according to Giroux.
Additionally, the state rescinded a previously approved pay plan that increases the average salary of UW System faculty and academic staff by 2 percent each year.
There were also $161 million worth of cuts to UW System’s overall operating budget, according to the UW System 2009-11 Biennium Budget Fact Sheet.
While accompanied by a 5.5 percent increase in tuition, Giroux said this increase was not nearly enough to cover the cost of the cuts.
Most administrators agree the cuts and tuition hikes, though not as harsh as they might have been, will not be the last changes schools face. “
No doubt school is expensive. however tenured teachers and administrators are far overpaid especially given the lower cost of living where most state universities are located (except UW-M). If they don’t like lower pay then they can go do it somewhere else. Furthermore, the facilities are far too nice for most purposes. People used to be able to work and pay for their own school – today that’s nearly impossible without taking on debt. Was the education back then really that different than the education they provide today? Or are the facilities nicer, the cafeteria stocked with better food, the dorms with new furniture, etc.
How are schools like UIUC 800 million in the hole with all the ridiculous rises in costs of tuition? I just don’t get it
apprenticeship; thats an practice we need to bring back; it will help smooth studies – career transition; also reduce structural unemployment.
schools and banks share the blame as much if not more so than the individual because they profited from it, by making unfulfilled promises.
Professors, and because of salary compression there are non-tenured hot-shot assistant professors making more than tenured associate professors in the same department, get paid what the market calls for. Many of these people are doing cutting edge research that makes our lives better. Remember that academe is like the military and the state department, an up or out profession. If you don’t produce and get promoted you are gone. In the sciences if you don’t bring in the Federal grants, you are gone. If the Feds decide that they are no longer interested in your field of research, the money dries up and you and your lab are gone. This is especially true for the large number of university employees who are scientists or researchers but not in tenure track positions. In my university professionals are let go all the time. Most Research 1 universities (like mine and UIUC) have essentially become arms of the Federal government existing to meet their needs. Without the money from the government and from gifts and donations and money they earn off of patents most of the universities would be little more than community colleges.
From the inside where I sit I do not believe that administrators are overpaid. My university has a budget of over 2.5 billion dollars in 2009-2010. Most administrators rise from the professoriate. I didn’t. I came with a very specific set of skills from the Federal government. I earn two-thirds of what I did in the Feds, and my salary, and nearly everyone elses was cut 3% this year with furloughs. It will be cut the same next year. You hear very few complaints about that because people understand.
I am the only person who does the job, and I have responsibility for 60,000 people and everyone who comes wandering on to campus. In the Feds, I had colleagues to share the burden. I don’t have that here. Throughout our campus we often have only one person who carries out does that responsibility. The Deans or Vice Chancellors are responsible for hundreds or even thousands of employees, and oversee $100,000,000 plus budgets. Dealing with students, staff and professors can be like herding a bunch of cats that have never learned how to use a litter box.
From what I have read here some of you guys (and gals?) were hellions in college. Who do you think has to deal with that? Who has to deal with the numerous requirements placed on us by our state, which often treats the university as nothing more than another state agency and imposes rules and regulation and requirements that cost money and add no benefits? Who has to deal with the professors who wouldn’t teach or research or who have moved into their offices or who abuse their staff or students or have family or personal problems or fake their research or steal money or conduct illegal research or commit criminal offenses or yell at their colleagues or respond to idiotic state legislators or stupid reporters. Universities like mine are small cities (we have a huge professional police force) or small villages. But whatever their sizes, lots of bad stuff happens. Who do you think has the responsibility for solving those problems?
I think that Crown ph is cool. anon you are so vicious when it comes to defending your stainless steel forever stance. what exactly is wrong with mauve carpet?
Steve A: fascinating stuff. so tuition’s have outpaced inflation mostly bc the gov’t is giving you less cash? sounds like what bob is calling for. what happens if student loan subsidies disappear?
“when it comes to defending your stainless steel forever stance”
I’m not married to SS. Just don’t know what will replace it, and none of the many who claim it is “over” have *any* alternative that seems plausible for pretaporter appliances and have little patience for grand statements of “that will look dated” w/o any suggestion of what *won’t* look dated.
“that Crown ph is cool”
It is cool. And if it were my Chicago pad where I spent ~25% of my time, I’d keep it *exactly* the same–except add original Nagels all over the place and make sure all the furniture was chrome glass and black leather.
anon:
“But what percent of Americans have a 4-year degree (or more)? Less than 30%. So the numbers support that (false) view. ”
to clarify, I am referring to high schools as much as colleges, if not more so.
your average high school curriculum is designed largely for college/white collar prep, even in Chicago – where as your own number highlights, is like cramming round pegs into square holes.
“to clarify, I am referring to high schools as much as colleges, if not more so.
your average high school curriculum is designed largely for college/white collar prep, even in Chicago – where as your own number highlights, is like cramming round pegs into square holes.”
I think you can tell I’m on the same page with you on this, but I was focused on the student loan piece of things, and I’ve yet to hear of kids saddled with prep school loans, so I missed that before.
University tuition inflation far exceeds inflation in any other economic sector EXCEPT heathcare. Both sectors have the characteristic that due to various funding perversities and market distortions there is no direct connection between consumers and payers. It’s no coincidence.
“but I was focused on the student loan piece of things,”
gotcha – I’d just add that kids trying to get vocational degrees at places like DeVry and IIT are definitely going into hock. Some of those classes could be taught in CPS.
Jeesus Louiseus you guys are EXHAUSTING!!!
How ’bout we get back to discussing condos, houses, the state of affairs of the south loop buildings…any kind of housing talk and save all of this economic pontificating for another site?
I mean, I totally appreciate the mental prowess of the participants on this thread, hut I would much rather be engaged in some form of floorplan porn and it’s exploitation.
“original Nagels”
that is awesome. had no idea who Nagel was but guessed correctly before googling it. your place would rock.
“Jeesus Louiseus you guys are EXHAUSTING!!!”
The owl says the sparrow has a large head
sorry westloop,
i tossed out the student article, my bad.
Steve A strikes me as an academic bureaucrat even before he self identified as one.
In his first post he quoted an article that stated that:
“Significant hikes in tuition have been a natural response at schools around the country and recently incited protests on many American campuses.”
Really?
What about this quote:
“According to the PEO report, Wisconsin’s investment efforts since 1980 have fallen by 54.3 percent, putting it in the top 10 worst in the country.”
Who is the PEO? I’ve never heard of such an organization. Also the quantitative “facts” posted here provide no frame of reference. What have they fallen in relation to? Absolute dollars or bloated university budgets?
““It used to be that students about 10 years ago paid a little more than a third of their own educational costs and the state subsidized the other two-thirds … today, students are paying about 60 percent of the cost,” UW System spokesperson Dave Giroux said.”
And yet Steve A, being the Academician bureaucrat he is, fails to provide context for the above mentioned propaganda quote.
Steve A, let me ask you this, what was the total UW budget 10 years prior and how does that compare to today? Even taking into account some impartial, 3rd party inflation index such as the CPI?
You are an academic bureaucrat whose first and foremost goal in terms of career progression is Empire Building. I saw the same thing at my “Flagship School” of another state. They stated they wanted to be a top-20 research institution and justify that for the outrageous tuition increases since I attended (almost 100% over a decade). This mean one of my professors who basically repeated someone else’s textbook word for word was lured out of much higher cost of living state to mine for a 200k salary (its all public record). What are the odds he golfed with the president of my university?
You also throw out such straw men arguments as the research benefits of said schools but let me ask you this: what substantive research has come from publicly subsidized universities lately that has impacted daily life? Especially in the social sciences? Do feel free to elaborate.
In reality you’re an academic bureaucratic administrator who is bent on Empire Building and also lost sight of the original mission of public universities (via cheap financing as I elaborated above): providing an affordable education to the citizens of that state.
You, Steve A, are a fraud and your lies won’t be propagated on here without being checked. I can only hope the voters of your state (in this case WI) see through the lies and vote to choke your dog chain of a budget and try to restore
your institution to its original purpose.
You sir are a fraud hell bent on Empire Building. But unlike most CEOs you’re worse because you either don’t even recognize this or try to hide behind the veil of societal beneificience even though the consequences are anything but.
If anything I hope this year’s elections and ensuing ones reign in these bureaucrats such as Steve A in and reject everything they stand for.
What was the overall budget anyway over the period you selected, Steve A? Do tell us about that growth before you rush to defend/justify it.
Ohhh I found it:
“State investments in higher education have declined by $52.3 billion since 1980, or 46 percent, according to a report from Postsecondary Education Opportunity, an independent policy research group.”
Steve A is this per year or over the entire time period analyzed? Is this _just_ for your state or over the entire population analyzed as its not clear to me.
“My university has a budget of over 2.5 billion dollars in 2009-2010.”
So I am assuming this is an annual budget just for your institution. But what was the budget back when you mentioned 1999-2000? Again we need context.
“The state share of the total UW System budget has fallen 10 percentage points since fiscal year 1999-00. During the same period, tuition and fees’ contribution to the overall budget have risen by about 7 percentage points, according to state Legislative Fiscal Bureau and UW System records.”
And also Illinois is in a far more precarious position than your state: our problems are similar to yours but magnified and we tend to have a problem with corruption.
“University tuition inflation far exceeds inflation in any other economic sector EXCEPT heathcare. Both sectors have the characteristic that due to various funding perversities and market distortions there is no direct connection between consumers and payers. It’s no coincidence.”
JPS don’t forget real estate. The problem with EZ-financing, as we have discussed at length on here and often, is that it allows those with no businesses to be in the game to set the prices for a good/service at the margin.
Westloopelo, to keep it relevant to you: imagine how much lower your cost basis would be without financing options for those bidding on buildings against you? Now not as extreme but imagine how much lower your cost basis would be if their financing wasn’t subsidized by our government?
Why are agricultural, mortgage, and higher education subsidies so valued by our government when two out of three of them are the source of our current problems? Are Americans really _this stupid_?
Bob:
There is a direct relationship between having a bachelor’s degree and the amount of income you earn. The UW System President intends to increase the number of graduates from the system pretty dramatically over the next few years although I have no idea where the money to do that is going to come from. Agree with you that corruption is a significantly less of a problem here. The people in this state have been “goo-goo” types for a very long time. Milwaukee is sometimes an exception.
This is the article in the Wisconsin State Journal that briefly discusses the goal of increase enrollment and the reasons for it: http://host.madison.com/wsj/news/local/education/university/article_4e342ad1-ed5f-5f54-903c-d8a28843e050.html
“Calling it an “ambitious” goal, University of Wisconsin System President Kevin Reilly said he wants to increase the number of UW graduates by 30 percent over the next 15 years to create a better-educated and higher-paid workforce in the state.
But he said reaching that goal will take buy-in from Wisconsin families and a renewed investment from the state, which didn’t provide funding for the university’s growth plans — called the Growth Agenda — in the most recent biennial budget.
“If we do nothing, Wisconsin will fall further behind,” Reilly said.
In 2008, 26 percent of Wisconsin adults had a four-year college degree, compared with 32 percent in Minnesota and 28 percent nationwide.
The UW System’s goal comes on the heels of an announcement by President Barack Obama last month, who said he wants the U.S. to have the highest proportion of college graduates in the world by 2020. Other states, like the California State University system, have recently announced similar efforts.
It matters, Reilly said, because college-educated citizens tend to have higher incomes, better health and be more engaged in their communities.
The plan calls for gradually increasing the number of UW System graduates from 26,000 per year to 33,700 per year. Over 15 years, that equates to 80,000 more graduates for Wisconsin.
Reilly said he plans to achieve that goal through three tactics: increasing enrollment; preventing students from dropping out before graduating; and innovative course delivery, like online courses.
How the UW System plans to fund the effort is not clear.
“We need the state to step up,” Reilly said, in terms of providing funding and giving the system’s 26 universities more flexibility to conduct business.
Facing a budget shortfall of more than $6 billion, the state didn’t fund the University of Wisconsin System’s roughly $30 million budget request for its Growth Agenda in the most recent two-year budget.
Noel Radomski, director of the Wisconsin Center for the Advancement of Postsecondary Education, said it’s important that the plan offer specifics. It should take into account what sorts of jobs are available in different regions of the state and include the cooperation of the state’s technical college system and the Department of Workforce Development.
“If we’re going to have a goal of doing something … then we have to have a business plan that tells us how to reach it,” Radomski said.
The UW Board of Regents will discuss the goals at a board meeting on Thursday in Fond du Lac.”
Posted in University on Monday, April 5, 2010 9:45 am Updated: 9:51 am. University Of Wisconsin, University Of Wisconsin System, Kevin Reilly
“You are an academic bureaucrat whose first and foremost goal in terms of career progression is Empire Building.”
Wow you sure know me and my life.
Actually I was a Federal bureaucrat for much of my career mostly at the staff level. I had my one shot at management; found it not to my taste and return to a senior staff position. This current gig is just my retirement job where I have no desire to go anywhere above my current station nor do I want to hire anyone to work with me. Just signing the time and attendance sheets of the two people I nominally supervise is enough for me. I’m much too old for chasing a career. I intend this job to be fun.
I do believe that the disinvestment in public post secondary education is a serious error since, besides educating students and creating a more enlightened electorate with greater economic opportunities, colleges and universities are great wealth generators for the states. This is especially true of the R1 institutions. They bring in from the outside much more than the state gives them. Of the roughly 2.5 billion budget for 2009-10 at my institution only 457 million, or 18.6 percent, comes from the state. The largest single amount, 684 million, comes from the Feds. This is money poured back into the nation and state’s economy for buying goods and services and hiring people. Gifts and grants are the second largest amount at 490 million. Tuition at 377 million is the third largest. The fourth is the money we earn from our auxiliary enterprises at almost 312 million.
how much does football and hoops generate?
“how much does football and hoops generate?”
barely enough to pay for all the title 9 crap sports that nobody watches
I said this would sell for low to mid-900s.
I”m going to pat myself on the back for this one. 🙂
Hey Bob, dont be steppin on Poppa Steve’s air jordans. the groove man got his back 🙂
Poppa Steve gave us some good inside look at the higher education system from his side. It was a good read and we all are better for learning it. (It still didnt change my mind of feeling i got ripped off for my degree). It helps us understand why our most of our professors cared less about us learning and more about our research and getting grants. I learned more from TA’s the wack azz lectures.
“barely enough to pay for all the title 9 crap sports that nobody watches”
Sonies,
Is that why they canceled UofI’s hockey team?
I believe that the U of I hockey team was a “club” sport not supported directly by the university?
“I believe that the U of I hockey team was a “club” sport not supported directly by the university?”
Hey i always wondered how the “club sports” were funded? anyone know? cause the illini had two womens volleyball club teams, team A and Team B. (and yes i date one on each team in the same month, college so much fun)
are you 100% the hockey team wasnt div 1 and funding cut it to “club”? that what they did at northeaster il u, the cut all the div 1 teams cause of funding and crappy sports recruiting
“Hey i always wondered how the “club sports” were funded? ”
Depends on the school, but at mine they got some funding from the Athletic Department, some from the student government fund (aka Activity Fees or whatever), some from team-based fundraising (both thru the Athletic Dept–like cleaning the stadium after a game–and otherwise) and participation fees.
kewl beans Anon,
now i remember one of the girls whining about doing a fund raiser. and i think they had to pay for their own travel too (dont quote me on that)