Schools can, and should, teach college affordability

This month the Department of Education released a study titled “What High Schoolers and Their Parents Know About Public 4-Year Tuition and Fees in Their State.” You can read through the entire report in a few minutes, but here are the key findings:

Overall, 11 percent of 9th-graders in 2009 reported estimates of annual tuition and fees at a public 4-year university in their state that were close to the actual average tuition and fees. Fifty-seven percent overestimated tuition and fees, and 32 percent underestimated them.

When students were asked about their confidence in their tuition and fee estimates in 9th grade, 27 percent reported “not at all confident.” Two years later, when most students were in 11th grade, 51 percent reported that they did not know how much public 4-year colleges in their state charged for tuition and fees.

One-quarter of 9th-graders disagreed or strongly disagreed that college was affordable. Two years later, one-third of these students reported the same. In addition, the percentage of 9th graders who planned to enroll in a bachelor’s degree program declined from 51 percent when they were in 9th grade to 45 percent 3 years later, when most students had just completed high school.

So basically: high school students don’t know what college tuition costs in their area; they realize they don’t know; many assume it’s unaffordable; many give up on college because of their (often inaccurate) estimates of cost.

These findings make a lot of sense. The actual cost of college is complicated, because it’s different for each person at each university. It’s completely reasonable not to look into college if you’re pretty sure you can’t afford it. And really, why would we expect 9th graders to know how much a college education costs?

But after a few minutes of thinking, I had to ask: why wouldn’t 9th graders have an idea of how much college costs? Look through any school district’s curricula and public materials, and “college readiness” is going to be all over the place. Thousands and thousands of schools are cultivating a “college-bound culture.” My middle school daughter wears a uniform to school, but on Fridays she gets to wear a college t-shirt or sweatshirt instead. My second grade daughter’s elementary school has college flags and banners covering the walls of the cafeteria and gym. They do this because they want to emphasize college readiness, to show all students, even in kindergarten, that they are expected to be on a path to college. So shouldn’t they mention cost at some point? Especially if the students are so bad at estimating the cost, with real consequences?

If you’re of the mind that elementary school-aged children really ought not be thinking about the cost of college, that they should be focused more on reading, writing, and running in the playground, I totally understand. We don’t want our kids growing up too fast. However, if your elementary school already includes elements of college-bound culture, then I hope the school will also find places to repeat these two basic principles to students: “College is expensive, like buying a house or starting a business. But college can be affordable if you plan ahead.” That’s all. No need to push the merits of 529 plans or calculating Return on Investment. But it seems like a disservice to reinforce that all kids can go to college if we’re not also reinforcing that paying for college takes time and planning.

In middle school, I’d keep repeating and reinforcing those basic ideas: college is expensive, like buying a house or starting a business. But college can be affordable if you plan ahead. At this point, I’d also start introducing some of the basic terminology: sticker price vs. net price; merit aid vs. need-based aid; gapping; undermatching, net price calculator. I’d also make sure they see this chart from the Bureau of Labor Statistics often.

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For high school students—all high school students, beginning in 9th grade—I’d keep reinforcing the principles and terms from earlier, but then it’s also time for some real-world examples to help students understand some of the complexity.

Here’s a chart I put together for students here in Houston. Imagine handing this chart to high school students and asking “which school is the most affordable?”

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If you look just at the sticker prices (I like calling them “maximum” to emphasize that many people pay less than sticker price), then UT Austin is clearly the cheapest, followed closely by A&M. Those are the least expensive tuitions if you’re paying cash.

But….if you’re not paying cash, if you need financial aid like most people, then things become much murkier. Rice is the only school on the list that meets 100% of need. Other schools may recognize that you need more financial aid than they’re able to give you, and you’re stuck trying to make up the gap. That 100% assurance makes Rice seem like a good bet.

But….subtract the average financial aid package from the listed tuition and fees, and you can see a different picture. Rice does look affordable: the average actual tuition and fees once you subtract financial aid is only $1,273. That’s great! But the public universities all have a negative net price. On average, first-year students at those schools pay no tuition and fees, and still have financial aid left over to start covering room & board, books, and living expenses. So long as you get the average financial aid package or more, then they’re probably a lot more affordable. But their average need met tells us that, even if the tuition & fees are little to nothing, there may not be enough aid to make room & board, books, and living expenses affordable. It depends on your individual aid package.

But….financial aid usually includes loans, money that has to paid back. And when you look at average debt upon graduation, TCU—which has by the far the highest price when deducting average financial aid from list price—also has by far the lowest average debt. This may be because their aid includes more grants and fewer loans; it may be because they just have a lot fewer students with financial aid; it may be because the people with the heaviest debt loads are less likely to graduate. The chart doesn’t say.

By working through these tough questions and puzzling numbers, students can accomplish a few things. They’ll have a better estimate of public 4-year tuition and fees, because they will have looked at those prices. They’ll also understand that listed tuition and fees is only a part of the overall picture, and that different schools approach financial aid differently. Ultimately what they’ll learn is that you don’t know for sure what a university will cost you until you apply and get a financial aid package. You can only know what’s affordable after you’ve gone through the process, not before.

One thing that parents and educators hate is setting children up for failure. We may not always be skilled at avoiding it, but we sure do hate it. When it comes to college readiness and college-bound cultures, leaving price out of the conversation is arguably one of the best, easiest ways to set students up for failure. Let’s all agree not to do that.

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