A $200,000 Degree?

It’s tough being at the top.

Source: Sarah Lawrence College

Sarah Lawrence College—in Westchester County, New York—has been the most expensive college in the U.S. for the past two years, according to the Chronicle of Higher Education, and their administration is tired of it.

“Being the most expensive obscures two facts,” says President Karen Lawrence. “One is the value of the education, which our students and parents do understand. And the second is the deep commitment that we have to access and affordability.”

Tuition plus room and board for the 2010-2011 academic year is approximately $56,500. According to the College Board, the average cost a four-year, private, nonprofit school for the same year is between $35,000 and $40,000. Even Harvard comes in lower at about $42,000.

One of the reasons for the high price tag is the way the college does business.

“We have a nine to one [student-to-teacher] ratio,” says Tom Blum, vice president of administration. “Our average seminar size is between 11 and 12 students. We cap our seminars at roughly 15 students. Ninety-four percent of our classes have 19 or fewer students. That’s a very cost-inefficient model for delivering a superb education. It means that we have to rely on many faculty to deliver this education. Labor is expensive.”

So is financial aid for those students who can't afford the price of admission. Around 60 percent of Sarah Lawrence students receive financial aid in the form of grants from the college itself, while only 52 percent of graduates leave with student loans, according to the Project on Student Debt.

“We are giving, on average, $31,000 in grant aid to students in need,” says Lawrence. “That commitment to financial aid and the value should be seen in tandem with the fact that this year we are the No. 1” costliest school in the country.

Sarah Lawrence's low student-to-teacher ratio makes it almost impossible to achieve economies of scale.

“We have no beginning 101 biology classes with 500 students in it," says Lawrence. "We have no graduate students teaching any classes. So those kinds of economies of scale that big institutions and universities have is not something that we avail ourselves of.”

With a large faculty of 310 teachers, which includes the graduate and study-abroad programs, just 1,200 students and generous financial-aid package, how does Sarah Lawrence keep its doors open?

“We pay the bills at Sarah Lawrence with [our] endowment,” says Blum “We pay the bills with giving from our alumni, through various grants that we might receive from foundations, and we rely on students who are full-pay students to carry the college.”

As of May 2009, SLC's endowment was about $60 million, or about $50,000 per student. That's significantly less than the school's peers. In the same year, Barnard's endowment stood at $168 million (about $69,000 per student), Colgate's was $561 million (about $193,000 per student), Vassar's was $658,000 ($268,000 per student), while Swarthmore's endowment of $1.13 billion supports a campus only slightly larger than Sarah Lawrence (1,525 students), resulting in a per-student total of $740,000—14 times more than Sarah Lawrence.

The college's faculty and staff have had their salaries frozen for two years in an attempt to provide students with as much financial aid as possible, but Lawrence admits that strategy is not sustainable.

“We will do what we need to,” he says. "In terms of raising money for the endowment and fulfilling our commitment to financial aid, so that we can continue to have a very vibrant and diverse student body at Sarah Lawrence.”

Over the years, that student body has included such famous people as Rahm Emanuel, Barbara Walters, Alice Walker, Tea Leoni, Kyra Segewick, Brian De Palma and Julianna Margulies.

Watch "Price of Admission: America's College Debt Crisis" on Tuesday, Dec. 21 at 9PM ET.