For many families, paying for college is one of the biggest financial decisions they will make. Tuition is the highest it has ever been – and the financial aid process is anything but clear. New book by American journalist Ron Lieber, The price you pay for college it aims to take the black box of college finance and “turn it into lighter and lighter shades of gray.”
Of course, Lieber admits is confused system. But he doesn’t want to fix it – he’s only here to help you and your family do it. “What I would really like is to blow into the little things. But this is not a book to blow into the little things,” he says. “I take the system as it is and try to help people learn how to beat it.”
The interview was arranged for length and clarity.
What are the parents cheating about the faculty price – the prices listed on the faculty websites?
Approximately 90 percent of people do not pay the full price. They get some kind of discount. The number of families that will actually pay varies greatly depending on how desperate a particular institution is to put their heads to bed and whether this is particularly desperate for some types of people more than others.
You don’t pay that price from the list because most families receive help – or as you call it, a discount. What are the two types of help?
There is a needs-based assistance system that runs on one set of railways, and then right next to it, in parallel, there is a merit-based assistance system – it runs on its own set of lines.
Okay, so as a student or family member – how do you approach that first kind of needs-based help?
Each school must publish a net price calculator. It is often hidden – not in an obvious place. So just Google, you know, [insert college here] and a net price calculator. There you will be able to enter your financial information. The net price calculator should spit you an estimate of what your family should pay if you enter. So what you get is what the price would be in the end, and then, hopefully, a breakdown of how that financial aid can be shared.
So the tricky part, when you get that net price. is to ensure that you understand what components of that net price might be. For example, how long did that school ask you to take over?
The other money you get in college is merit help. I consider aid in merit to be money for the mind. But does it sound like this goes beyond academics?
There is much more about who you are, about your profile, about grades and test results and other tangible and intangible materials. It can vary depending on the year or month, as well as how well the school is doing in its attempt to attract the right number of students who pay the right amount of dollars per student.
Here’s another way to think about it: Imagine a really long list of all the colleges and universities in the United States, ranked roughly in order of selectivity. Starting at 30 or 40, you start getting drops of elite institutions that give money based on someone’s academic potential. And then in the next 25 to 50 places on the list you find a lot of selective schools that have a market problem and a marketing problem, and that is that with $ 70,000 or $ 80,000 a year people’s ability to pay no longer matches their willingness to do more. So you try to keep a certain price at full price for a certain number of students while giving discounts to others.
Then you go further down the food chain where very few people pay the full price, but most people don’t know that everyone gets a pony for merit. And in those institutions, schools keep that information to themselves – the fact that everyone gets a discount – because they want every parent whose child gets an unwanted offer of help from a school running around town to brag about being offered their child academic money from this or that college. Further down the food chain it is obvious that almost everyone gets something.
So, merit aid – a discount unrelated to financial needs – is basically a way for colleges to manipulate or persuade often wealthier families to go to their university?
See what Tulane, Northeast, and even the University of Southern California have done using merit aid. They just went out and bought smart kids. People are often surprised by this, aren’t they, because we’re not used to seeing higher education as a highly competitive industry as it is. We have several thousand undergraduate institutions, and they throw it out for every student to commit and graduate.
Therefore, we should not really be surprised that money is used as leverage, even with children, because children have to play a role in this process. I’m in enough teen mailboxes watching these things to know that cash flow is more common than it used to be and absolutely resonating, but also confusing people because they don’t really know how it all works.
So where do parents even begin when determining how much money is appropriate to spend on college?
What I encourage people to do, first and foremost, is to look at something called the shared data set that most schools make available. [To find, search Google for “Common data set” and the college name. Here’s an example result from the University of Richmond.] This is a document that schools send American news and world report and other ranked organizations. Look for the H2A line. It tells you the number of students who did not qualify for any needs-based assistance but still received money for merit. So it gives you a sense of how desperate the school is and what a package of merit it could offer even to people who don’t need the money because of their assets or income. You start to have a sense of where you stand.
And then you can do something else. Just go to school and ask. All this hocus experiment, even if you need to dig through the data tables, is not fair. It is quite reasonable to call the school in September and say, can you please read my application for my application in advance. It is something that continues. Wooster College in Ohio does it for anyone who asks. Whitman College in Washington state does this for anyone who asks. It’s rude that we have to make decisions about where and how to apply without having a good sense of how it’s going to shake off. It’s not right.
What should be done for students applying to college this year if their financial situation has changed due to the coronavirus?
Ways of appeal [for need-based aid and merit aid] are different. If it is needs-based assistance, you will go to the financial assistance office and try to prove to the financial assistance officer that you have changed circumstances since you submitted the financial assistance forms. And you go ask the financial aid officer for professional judgment to reconsider your offer.
As for merit help, you’ll get closer to the admissions office, and the best way to do that is a whole bunch of humility, but also a competitive offering.
If you have a quote from another school competing with an institution enough to be a reasonable comparison, you walk into the school you want to complain to and say, ‘I’d really like to go here. The base price at this other school is lower than yours. We may have made a mistake here in our application for you that we did not make with another school. Would it be possible to do a review here to understand what happened? ‘
And here’s a secret most people don’t know: it’s not the people who generate these offers at all. Robots are most often programmed using software algorithms. And so people have the ability to intervene in the end in a certain amount of reasons. It can’t hurt the attempt.