Are you facing a mammoth tuition bill?
Massachusetts now has nine schools with a
“college cost/sticker price” above $50,000 per year (Chronicle of Higher Education).
As of last year, no school in Massachusetts surpassed that mark.
Last year only 5 schools in the nation had total fees exceeding $50,000. This year, nearly 60 schools charge that much per year! That’s a 1,060% increase! What will the increase look like next year?
This all makes for great headlines, and there is real cause for concern about the steady inflation of college costs. But …
What better questions can be asked by families intimidated by the published college cost?
How important is a college’s sticker price?
The key to this question is the role of financial aid.
Sixty-six percent of all undergraduates received some financial aid in 2007-2008, according to the Department of Education. Full-time students approached a rate of nearly 80%.
While the average published private college cost last year was $37,390 (public, in-state was $18,326), that is not reflective of the actual fees each individual student may have paid based on the type and amount of grant, scholarship, loan, and work-study aid they may have received. (Note: college cost includes tuition, room and board, and allowances for items such as books, travel and fees).
Because of financial aid, there may often be a significant difference between the published “sticker” price versus the actual “net” price paid.
We hear so many stories of families insisting that their students could only apply to state schools last year because a private college education was going to be cost prohibitive.
If only they knew what the Wizard behind the curtain was really trying to hide!
By peeling back the layers of the onion and calculating their exposure (EFC) based on the Federal and Institutional Methodology, many families would discover that many private schools will end up with a net cost that may be very close, if not lower than the net cost of a public school.
Armed with this knowledge (what is the “true” college cost) before they begin the college search, rather than following the “guidance” received from the media, they’re much more likely to have a broader selection of schools that are a great fit, academically and financially.
Does the sticker price reflect superior quality?
There are some great cars out there with hefty price tags, and they certainly have quality. But let’s face it: the “snob” factor plays a pretty big role too.
There is a similar attitude towards colleges (college cost equals college quality). Yet many studies (including one by Princeton economist Alan Krueger) explain that where a bright student goes to college really doesn’t mean much in terms of finding the right career or more importantly, earning power. The research indicates that what really matters is how well the student performs at whatever institution of higher learning they attend – not the number on the price tag.
What we can be sure of is that an informed college search is fertile ground for a savvy shopper.
* Tufts’ mascot is Jumbo, and has an interesting “tail”.
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Good article, Todd. Alan Krueger makes a good point. A very wise man I once knew (OK, my Dad) used to say pretty much the same thing. The cream always rises to the top no matter what school they go to. Bright, motivated people always find a way to do well.
“Bright, motivated people always find a way to do well.”
I love that quote! It’s true though. My son is attending the University of Michigan, and it costs about $25,000/yr. My husband and I are paying nothing. I spent the last year reading and researching everything I could get my hands on about how I could help him win scholarships. It was like a part-time job, but it paid off. I have published and copyrighted the method that I developed and now that income is helping me continue to be a stay-at-home mom to our two other children. If anyone is interested, my website is http://www.how2winscholarships.com.
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