Before College: Net Price — The Key to Selecting an Affordable College or University

Prices posted for this year at private non-profit colleges and universities average out to $52,900. That’s more than twice the $25,290 average of prices posted for this year at public colleges and universities. Clearly, public institutions are generally more affordable pathways to bachelor’s degrees than private institutions.

But there are exceptions.

For example, we compared average net prices for 2016-17 in-state, full-time, first-year undergraduates at 30 Public Ivy League universities to average net prices for the same type of students at 15 top-ranked private nonprofit universities, including the Ivy League schools. Interestingly, net prices were lower in 17% of these comparisons at the private nonprofit universities.

Private nonprofits work particularly hard to keep their net prices low. Every year, Ken Redd of the National Association of College and University Business Officers (NACUBO) surveys the discounts such colleges and universities provide. In 2017-18, he learned their freshman discounts averaged 49.9% of their freshman tuition charges, while their discounts for all undergraduates averaged 44.8% of their undergraduate tuition charges.

Discounts? Net prices? Anyone who’s purchased an automobile is familiar these, at least in practice. Dealers post sticker prices on their cars, then haggle with customers about how much to shave off, or discount, those sticker prices. Remaining amounts are net prices — i.e. what customers actually pay for the cars.

Colleges and universities don’t “haggle” about “how much to shave off” their sticker prices, but they often award gift aid (grants, scholarships, and tuition waivers) that can discount their sticker prices — making them the net prices students and their families pay.

Important! Postsecondary institutions, public or private, usually don’t discount equally. College recruiting strategies typically call for applying more institutional gift aid to achieve lower net prices for students they want than for students they don’t want.

To find net prices:

1. Past behaviors are the best predictors of future actions, even by postsecondary schools. So use the federal government’s College Navigator to identify net prices in recent years when selecting institutions to which a student may apply for admission. Be sure to adjust for nonresident tuition and fees for schools outside your state;

2. Apply for all the gift aid available from federal and state governments, private parties and institutions to which students apply; and

3. When financial offers arrive, calculate freshman year net prices. If any gift aid listed in these offers is renewable, estimate future year net prices, too.

Always figure out the net price of any college or university your student may attend. Doing so is the key to making even the highest-quality postsecondary education more affordable!

Contact College Affordability Solutions if you need help figuring out how affordable one or more postsecondary schools will be. Our consultations are always free for students and parents.

Before, During and After College: Now’s The Time For Constituents To Raise College Affordability Concerns With State Legislators

Anyone concerned about postsecondary education affordability should be a political activist. And right now is a critical time to get active with state legislators.

Legislators are significant players in college affordability. They set the rules governing public college and university tuition rates. They allot state money to such institutions, which influences tuition and fees. Legislators also vote for or against authorizing new state grant, loan, scholarship, and work-study programs. They also pass or reject amendments to those programs’ rules and provide their funding.

Why now? All 50 of legislatures meet this year. In fact, 43 have already convened (find your legislature’s start date by clicking here). And the National Conference of State Legislatures reports that over 23% of this year’s legislators are new. All that “fresh blood” paves the way for innovate, original approaches to college affordability, but it’s important to communicate affordability concerns, ideas and recommendations to legislators early and often.

Want to research bills that could affect postsecondary affordability? Click here to access an online policy watchlist maintained by the Education Commission of the States (ECS). This list covers bills in all 50 states that could affect K-12 and postsecondary education. It’s updated to include new legislation that gets introduced, then it shows where those measures are in the legislative process. It also links to the texts and summaries of bills.

As this week began, the ECS policy watch list showed 111 bills in 17 different legislatures about issues related to postsecondary affordability — everything from college savings plans to free college plans to student loan forgiveness. There were also 57 bills in 13 legislatures that, if approved, could create new financial aid programs or modify existing student aid plans.

How to “lobby” state representatives and senators? Here are some simple tips:

1. Unsure about who those lawmakers are? Click right here for a link to state legislative websites through which they can be located;

2. Band together with other like-minded people. There’s great strength in numbers;

3. Visit legislators face to face — in their district offices, at their town hall meetings, or at the capitol. Appointments are recommended;

4. Phone them at their capitol offices. These conversations will probably be with staff members, but they report call to their bosses, so that’s OK;

5. Send emails or letters; and

6. Be sure all communications — verbal and written — are clear, demonstrate knowledge of the issues, and include a straightforward “ask” about what you want them to do.

So now’s the time for those worried about college affordability to lobby the state legislatures they elected. It’s their right. And it’s the only way to keep postsecondary education from becoming too expensive for most Americans to afford.

Contact College Affordability Solutions for help designing your own personal College Finance Plan. Students, ex-students and their parents pay nothing for such consultations with College Affordability Solutions.

Before College: Be Careful! For-Profit Schools Can Be Risky!

Not every American dreams of a career requiring a bachelor’s degree from a private or public college or university. Many want skilled technical positions available to those who earn associate’s degrees or certificates. There are three main pathways to such credentials: community colleges, state technical institutions, and for-profit schools.

But here’s an important question for students seeking associate degrees or certificates — should they attend for-profit schools?

The media regularly reports on for-profits engaging in dirty practices such as:

• Persuading students to enroll with false advertising;

• Charging high rates of tuition but offering cut-rate facilities and student services;

• Providing education and training programs that don’t lead to the jobs students need and want; and

• Unexpectedly closing, which can impair their students’ efforts to complete their studies.

Such stories aren’t fake news. This past fall the inspector general of the U.S. Education Department (ED) warned Congress that postsecondary education’s for-profit sector “continues to be a high-risk area”.

Just last week a national for-profit chain of schools announced a multi-million dollar settlement with 48 states who were investigating it for misleading prospective students about costs, credit transferability, job placement rates, and program offerings.

In December.ED began searching for 20,000 students needing help due to the sudden closure of over 70 schools owned by a large for-profit education company.

For-profit schools aren’t the only “bad actors” in postsecondary education, as illustrated by the situation at Temple University. But for-profit schools are disproportionately cited for scamming students.

And while ED’s latest data show that under 2% of postsecondary students enroll in for-profit schools, those schools produced 34% of federal student borrowers counted in ED’S 2015 default rate.

All this suggests that, if they’re accessible and offering programs students seek, it’s probably better to attend community colleges or state technical institutions than for-profit schools.

Still, not every for-profit school is bad. Many offer more flexible class schedules and require fewer prerequisite classes, making for faster graduation. And a majority of their students are older than average so, as adults, they may find for-profits more comfortable than campuses on which they’re surrounded by teenagers and twenty-somethings.

Every postsecondary school is legally required to make available to prospective students information on its:

• Costs of attendance;

• Financial aid available;

• Educational and training programs;

• Refund, transfer of credits, and withdrawal policies and procedures; and

• Completion, graduation, job placement, retention, and transfer rates.

Also, a 2016 Forbes Magazine article suggested six additional items to check when checking out for-profit schools.

Students never deserve to be victimized. They should use the information described above to avoid unethical for-profit schools!

Is affordability an issue in your efforts to select a college? Contact College Affordability Solutions if you’re looking for help.

Before College: Going To An Out-of-State Public College or University is Exciting But Costly

High school seniors and transfer students will soon decide where to attend college next fall. Many may hope to enroll in other states’ public colleges or universities.

These ambitions may be driven by the urge to remain with friends, more closely follow favorite college teams, or satisfy the sense of adventure that’s so prevalent among young adults.

But other states’ public institutions are generally less affordable than home-state public universities. Their students pay significantly higher costs while often being shut out of financial aid opportunities that could help meet those costs.

High Costs

College Affordability Solutions randomly surveyed the 2018-19 undergraduate costs of attendance posted by one-fourth of the nation’s 50 flagship state universities. At these schools, total costs of attendance are averaging $26,824 for residents and $46,695 for out-of-state students.

Tuition and fees make the biggest difference in total cost of attendance. On average, they’re $10,769 for in-state students while out-of-state students are paying $29,433.

Also, some institutionally-published costs are understated. For example, resident and non-resident transportation costs at the surveyed schools equal, on average, $1,254 and $1,461 respectively.

Do out-of-state undergraduates actually spend just $207 more than what in-state students spend on transportation? Obviously not, since out-of-staters must travel hundreds, if not thousands, of extra miles between campus and home four to eight times a year. Clearly, the surveyed schools are understating non-resident transportation costs — particularly the nine out of 12 institutions that have the same transportation expenses posted for in and out-of-state students.

Financial Aid

Institutional and state grants are usually limited to financially needy students studying in their home-states’ postsecondary schools. Moreover, non-residents are barred from many institutional scholarships because donors funded them under the condition that they would be reserved for residents of those donors’ home state.

So undergraduates from other states often find themselves ineligible for the nonfederal grants and scholarships received by their in-state counterparts.

Exceptions

Most out-of-state students may as well resign themselves to taking on extraordinary amounts of student debt even if they earn money by working long hours. But are a few circumstances under which students could find other states’ public colleges and universities to be relatively inexpensive.

These include institutions that:

• Provide scholarships or waivers discounting their tuition and fees to what students would pay back home;

• Offer degree programs students want to pursue if such programs aren’t offered in students’ home states;

• Are great cultural, educational, and social “fits” for students.

Absent these things, middle or lower-income students will no doubt find their own states’ schools to be their most affordable and sensible postsecondary learning options.

Looking for advice on how to make postsecondary education as affordable as possible? Feel free to reach out to College Affordability Solutions for no charge consultations!