What’s your favorite analogy for college costs? The airline business, where every seat is sold at a different price? The automobile industry, where you’re a fool to pay the sticker price on the side window? Perhaps Alice-in-Wonderland, when a $60,000 tuition can be called a discount?
Learning about college prices and college costs is just one of the many learning curves for parents new to the system. A few reasons why:
- Pricing and costs are complicated, individualized, and opaque.
- The pricing and financial aid system changes often, even within one school.
- Many families try to decipher costs at a number of schools, and each college determines and presents costs in a different manner.
First, though, back to that discounted tuition. NPR’s Planet Money ran the story on university accounting a week or so ago, in “Duke: $60,000 A Year For College Is Actually A Discount.”
In 1984, it cost $10,000 a year to go to Duke University. Today, it’s $60,000 a year. “It’s staggering,” says Duke freshman Max Duncan, “especially considering that’s for four years.”
But according to Jim Roberts, executive vice provost at Duke, that’s actually a discount. “We’re investing on average about $90,000 in the education of each student,” he says.
That accounting depends upon the charges the university chooses to apply toward each student, according to a retired U-Cal Berkeley professor, who questions whether the costs related to professors chiefly involved in lab research (and the cost of building their labs), should trickle down to undergrads.
Will the undergrad take full advantage of the resources afforded by a research university, seeking out research opportunities and working with the professors? If not, $90,000, even marked down to $60,000, could mean the student and his or her family are buying a lot more college then they need.
Yet colleges, other than community colleges to some extent, don’t offer an á la carte system. You make your choice and you buy into the college’s value system.
Each college administration, and its Board of Governors or Regents or Visitors, makes its own determination of how much of the college’s total operating costs to pass along to the students as tuition and fees, or its price. At the same time each college makes additional determinations that lead to an individual student’s net cost. Those include, but are not limited to:
- Will the financial aid policy be loan-free?
- Will the college commit to meeting all of the family’s financial aid?
- Will the college offer merit aid?
- Will the college encourage completion in four years?
The statement from Duke University’s Executive Vice Provost that $60,000 represents a discount exemplifies a choice Duke made about how to allocate costs. Duke also decided to allocate a third of the $60,000 tuition paid by full-freight students to financial aid for other students.
Just when you may have thought the list of considerations for college choices was long enough, families may want to add a look at what each college values–what choices the college administration and Board make–starting with those that affect your student’s net cost. Even a cursory glance at higher ed journals, such as the Chronicle of Higher Education, could add more considerations to that list, including how healthy the college”s finances and endowments are, whether the college pays a living wage, how much the size of administration has grown in the past two decades compared to the size of faculty, and how many professors are hired versus lower-cost adjunct professors.
More to come on the price of college…