It seems as though the world of higher education is in turmoil. Of course the big news right now is the so-called college admissions “scandal," a kind of pay-to-play circus that has snagged (and is snagging) a seemingly ever-increasing cast of victims. The news about that seems to be never ending, and so far has revealed the unpleasant dark side of what has actually been going on for much longer than most of us have suspected, and has called the value of many aspects of college into question.
Along with that is the tsunami of student loan debt, which in some ways threatens the future of countless current and former collegians. As my readers know, this is a particularly alarming situation, in my view, and I have written about it here many times. The issue is of such import that it has become an issue for presidential candidates. Consequently, you'll be reading about this much more in the weeks and months ahead.
Evaluating Whether College Is the Right Choice
Putting aside other higher ed conundrums for the moment, let me mention one of the major points that high schoolers and their families face: The return on investment of a college education, a.k.a. Value. Here, then, is a question for you to consider: In light of all the trials of the admission process, the stress of the high school years and the uncertainties teenagers have about their future direction and a life's work, does going to college make sense for you? Let's explore that.
In relation to college, there are two general camps of high school students: (1) seniors who have already made their enrollment decisions and (2) juniors who are “on deck," ready to take the plunge into the full-blown college admissions process. For most current college-bound seniors, the hunt is over. They are eagerly anticipating the dramatic new adventure that awaits them at the end of the summer. Juniors, on the other hand, have miles to go before they can rest concerning their higher education futures.
In past articles, I've discussed at length the “preference points" that comprise the college search: distance from home, curriculum offerings, size, political leanings, and (among others) — yes — The Big One: cost. Of course, there are other more subtle preference points that go into making college choices, but I'd like to focus on cost, which can be deceiving. So here are some things to keep in mind.
Is Marketing Part of the Equation?
Marketing is a powerful tool in selling a college. Higher education, like most other consumer products (yes, a college education is a product) is presented in a variety of ways in order to appeal to prospective students. When the topics of marketing and advertising come up, I always think of a story I heard long ago about a company that sold a line of women's fragrances.
The company had put a lot of research and development into producing one particular perfume, but it wasn't selling well. So the advertising firm that represented this particular line of products held a series of high-level meetings to explore how to raise the appeal of this underperforming product.
After a couple weeks of futile brainstorming, one low-level employee from the copywriting department blurted out during yet another frustrating meeting, “Just raise the price!" Well, that's what they did, and sales took off. Following the hefty price hike, the women who were the target demographic for the perfume suddenly considered its quality and appeal to be superior, even “exclusive," since the price was now so high. The perfume had dramatically increased its “perceived value."
Now, I'm not suggesting that colleges raise their prices just to make them appear more exclusive or “prestigious," but some -- perhaps many -- high schoolers and even their parents equate price with value. As I mentioned, higher education is similar to other consumer products. In many cases, you can get what you pay for, but your mileage may vary, as they say.
Aside from Nobel-laureate faculties, one aspect of some top-priced schools that struck me recently while walking the grounds of a picturesque Ivy League university is the advantage of a quality physical plant. By this, I mean modern facilities: newer classroom buildings, clean and shiny living accommodations, sophisticated sports facilities, comfortable (and don't forget diverse and delicious) dining amenities and so forth. You can't appreciate the value of such things unless you've attended an institution where the facilities aren't up to par.
This fall, the nation's most expensive schools will have student budgets (tuition, room and board, fees, books and travel) hovering in the seventy-thousand-dollar range. That's right -- $70,000 or so. That's per year, and more than many families' total yearly household income. These are not just the Ivy League schools. Some highly selective, non-Ivy colleges and universities also have price tags in that region.
Evaluate Price Vs. Value
But even with the buffering help of merit- or need-based financial aid, does that enormous cost represent the best value for you? There, then, is the price vs. value conundrum.
To shine some light on this challenging decision, let's look at a few conclusions from a Pew Research Center survey. This is an incredible document. Granted, it's somewhat dated (2011), but the information contained within its seven long, detailed, data-filled pages is a goldmine for anyone looking for answers to the universal questions: Is college worth it? Can it be of value to me?
Here is a very brief sampling of the survey's findings from its Executive Summary, which should entice you to dig deeper into the full scope of findings:
Cost and Value. A majority of Americans (57%) say the higher education system in the United States fails to provide students with good value for the money they and their families spend. An even larger majority — 75% — says college is too expensive for most Americans to afford. At the same time, however, an overwhelming majority of college graduates — 86% — say that college has been a good investment for them personally.
Monetary Payoff. Adults who graduated from a four-year college believe that, on average, they are earning $20,000 more a year as a result of having gotten that degree. Adults who did not attend college believe that, on average, they are earning $20,000 a year less as a result. These matched estimates by the public are very close to the median gap in annual earnings between a high school and college graduate as reported by the U.S. Census Bureau in 2010: $19,550. A more detailed Pew Research Center analysis (see Chapter 5) shows that this gap varies by type of degree and field of study.
Student Loans. A record share of students are leaving college with a substantial debt burden, and among those who do, about half (48%) say that paying off that debt made it harder to pay other bills; a quarter say it has made it harder to buy a home (25%); and about a quarter say it has had an impact on their career choices (24%).
Why Not College? Nearly every parent surveyed (94%) says they expect their child to attend college, but even as college enrollments have reached record levels, most young adults in this country still do not attend a four-year college. The main barrier is financial. Among adults ages 18 to 34 who are not in school and do not have a bachelor's degree, two-thirds say a major reason for not continuing their education is the need to support a family. Also, 57% say they would prefer to work and make money; and 48% say they can't afford to go to college....
Other schools, such as community commuter schools, can cost as little as $3,500 per year. That's incredibly less expensive than the Big Guys. What, then, is the chief difference? Can one school be so much better than another, based strictly on cost? The answer to that question is ...
… It depends on what you're looking for. Many are looking for the least-expensive route to a professional or technical credential that can place them in a skilled job. For them, the live-at-home, commuter option makes the most sense. If you're looking for a broader, more diversified approach to education, then some variation of the live-away-from-home choice makes sense, although it's going to be more expensive.
Keep in mind that many expensive schools may have superior financial aid available. This can bring their net cost closer to the lower-priced schools. One challenging theory says, “Get into the best and most expensive school you can." Financial aid is the reason for that approach, in many cases. The more expensive schools usually have more money to give in financial aid, thus making their true cost much lower for families who really need the help.
Don't be blinded by the cost of a potential college. Probe for value points. Parents, once your son or daughter finds the right college match, you may be able to work out the finances, but if you can't, beware student loan debt.
Finally, keep in mind the ominous words of Forbes writer William Baldwin: “Is this system nuts, or what? College has gotten insanely expensive, and the tuition aid formulas have gotten insanely complicated. But if you don't figure them out you will be crushed."
So, to avoid being flattened by the realities of today's higher education environment, do your homework and figure out where the value of college lies for you. That which costs the most may not be your best bet and may not represent the best return on your investment. Be careful about falling for college marketing. Just remember those perfume dudes!