How Much is that Degree in the Window?
How much will it cost for you to get a bachelor's or master’s degree at your preferred institution?
You have no idea.
Sad truth, the people that work at the University of Pretty, the College of Not-My-First-or-Second-Choice, and the Closest U. that Sounds Reasonable, don’t know either.
Don’t believe me? Ask someone that works there what your full cost of attendance will be, including tuition and fees, room and board, books, and supplies.
The only honest answer, “It depends.”
And that, my friends, is a serious problem.
Colleges and universities pretend this isn’t a problem and act as if they have no control over the opaque pricing system.
The Used Car Guide to College Pricing
Americans don’t like to haggle. We prefer fixed pricing while understanding there will be sales.
We also know that new items that are very popular will likely come down in price after the initial demand wares off.
We hate shopping for cars, especially used ones because we know that most car dealers play games in order to suck the most money out of your wallet.
In the ideal marketplace, buyers and sellers have the same information. The knowledge imbalance in the car market means buyers are at a distinct disadvantage. While that model has shifted with greater information available from the internet, there is still a huge power imbalance.
When it comes to the higher education marketplace, information is available, but it is confusing, inconsistent, and unclear.
To borrow an old phrase from car dealers, colleges are not trying to “rip people’s lips off.” But, they do make potential students run through an overly complex system that rewards experience and expertise.
The advantage goes to those families that have been through the process before and/or can hire an admissions coach. (Read: money.)
Colleges and Universities have a variable pricing system based on a student’s family’s income, grades and/or test scores, underrepresentation status, and possible scholarships that a student may qualify for—if the student knows about them and applies for them on time.
Much of the pricing comes down to the government FASFA form, which determines how much financial aid (Pell Grants, student loans, and parent loans) a student will get/qualify for. Much of the price calculation, outside of scholarships, comes from that.
It’s Them, Not Us
For first-generation college students, the entire process is intimidating and requires learning the language of FASFA, the intricacies of college loans, and the rules of the college pricing game.
It’s not surprising that first-generation students and families assume college isn’t for them or is financially out of reach. They see sticker prices, read stories about massive student debt, and don’t know how to navigate the opaque financial aid system.
College and university CFOs will quickly point out how “affordable” their school is, especially for those from lower-income and first-generation families.
It’s the student’s fault if they can’t figure out this system.
This would be fine, but higher education is supposed to support a higher purpose than, “We can’t be bothered that we’ve made a complicated system, and you can’t navigate it.”
Institutions don’t need to change and have little incentive to do so. They have the bodies, the checks clear, mission accomplished. College is clearly affordable if students keep showing up.
This has been and continues to be an abject moral failure.
While blame will fall on the FASFA process, there is plenty that institutions can do that would help.
(We pause for a moment here for those that work in higher education. They are likely thinking their college or university is not as bad as others—thus allowing themselves off the hook and robbing themselves of a chance to reflect on what else could be done.)
Two Examples of Doing Things Better
Purdue University
Perdue University, a state institution in Indiana, has frozen in-state tuition at just under $10,000 for 11 years. It has gone ten years without increasing resident hall rates. If you adjust for inflation, tuition is almost 30 percent less in real dollars today than in 2012.
That’s unheard of. Mitch Daniels, before he stepped down as the long-serving president and the person that implemented the tuition freeze, says the campus’ 30 percent growth over the past decade is due in part to the reputation that the university is affordable.
University of Colorado Boulder
When I was a Regent for the University Colorado System (2007-2019), the Boulder campus instituted a four-year price fix for out-of-state students.
The price students paid as freshmen would not increase for four years. The campus depends on wealthy out-of-state students to balance its books and realized the price fix would give it a competitive edge.
It worked.
A few years later, the campus did the same for in-state students.
Both were a win for the institution and a win for the students.
Were these decisions mission-driven? No. They were financial. But, hey, take the win.
A few years later, the campus did away with all class-related student fees*—another win for students even though student activity fees remain in place.
That was a bold move that made things easier for students.
They did that one for the right reasons.
These two examples do not address the complexity of the financial aid process and the mystery of the final cost of college.
But they do address a major concern people have—uncertainty.
Students and their families can plan for what tuition will be during their time of attendance. For many, that relieves a huge physiological burden and makes the higher education process more accessible.
Lessons
Because the University of Colorado Boulder and Perdue are older, larger, well-established, and relatively well-off, they could make the math work. This isn’t a model that many can follow.
The lesson here is not about tuition freezes or eliminating student fees. It is about what creative thinking and commitment from leadership can produce that benefits the students.
As I’ve said before, colleges and universities have some of the smartest people on the planet on the payroll.
Creative thinking and problem-solving are what colleges and universities do.
This isn’t a talent problem.
This isn’t a knowledge problem.
It is a problem of will.
*Student fees are just back-door tuition for specific functions or departments. By raising fees and not tuition, campuses can hide some price hikes from students and, for public schools, from lawmakers. Departments love them because they are a dedicated revenue stream outside of the normal budgeting process.)