Paying for College

Parents And College Costs

We’ve been discussing the issues of college value, Return on Investment (ROI), and the effect of college costs on students (loans) and families (financial sacrifices). Those are heavy considerations that require much analysis before commitment.

Today, as somewhat of an extension of those topics, I want to share some ideas and information about two additional areas:

1. Parents’ ideas about controlling college costs, and


2. How parental financial support can affect student academic performance.

Parents are probably among the best judges of suggestions about how colleges costs could be controlled. The practicality of implementing those ideas, however, is another matter.

Kaplan Test Prep and Money magazine, two resources that provide pertinent information for families involved in higher education matters, conducted a survey and published their findings under the headline:

Parents Weigh in On Ways to Control College Costs, But None Win Majority Support

 

Let’s take a look at some of that. From a Kaplan press release …

With the cost of college a hot-button issue in the political arena, a variety of proposed remedies have been floated by regulators, legislators and advocacy groups — but what do those who are most directly impacted think? A new survey from Kaplan Test Prep and MONEY magazine of parents of prospective college students finds mixed support for many of these proposals (the e-survey was conducted in October 2015 and includes responses from 536 parents of prospective college students):

  • Ending Federal Aid in Exchange for Two Years of Free Tuition: A plurality (45%) of parents would agree to a proposal that ends all federal financial aid and tax breaks, if that meant free college for two years for all students, regardless of family income. Twenty-nine percent (29%) oppose this idea; 26% are undecided.
  • Living At Home: Another 44% of parents would agree to a proposal that would give students a free year of college if he or she lived at home that year and took online courses; 32% don’t agree with this proposal; and the remaining 24% are undecided.
  • No New Taxes: Thirty-eight percent of parents say they’d agree to pay higher state taxes if that made tuition at public colleges more affordable. Forty percent (40%) oppose this idea, while 22% are undecided.
  • Higher Income, Higher Tuition: Only 31% would agree to a plan that raised tuition rates at public colleges for higher-earning families so that students from lower-income families could be awarded more scholarships. A plurality (44%) of parents do not agree with this route, while 25% aren’t sure.
  • Students as Investments: Just under a quarter of parents (23%) support the idea of an investor covering a student’s tuition in return for a percentage of a student’s income after graduation. Fifty percent don’t agree with this idea; and 27% are not sure.

A new report shows that the average sticker price at an in-state public college is $19,548, including tuition and fees and room and board, $617 more than last year. Average private college tuition stands at $43,921, up $1,476 from last year. 

“As this survey confirms, parents are looking to political leaders for real solutions to the problem of high college costs, not just glib proposals,” said Greg Daugherty, education editor at MONEY. “At the same time, we’re seeing parents holding colleges more accountable for delivering value for the money. These are both very encouraging trends.”  

“While we’ve heard a lot of policy proposals during this campaign season, our survey results find that no one approach has caught fire with families,” said Lee Weiss, vice president of college admissions programs, Kaplan Test Prep. “While the not-so-bad news is that this year’s tuition increase is the lowest since the 1970s, government data show that tuition costs have outpaced inflation rate for years. Every generation of parents wants their kids to do better than they did and a policy redress on college costs is an important place to start.” …

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In light of the seemingly perpetual gridlock in Washington and the ongoing budget wars between parties, it seems unlikely that any major progress will be made in the area of controlling college costs, at least from a governmental perspective.

However, parents can certainly help themselves (and their children) by invoking some common sense limits when it comes to financing a degree, such as community college, living at home, exploring possible vocational school opportunities, etc. The problem with this, many times, is the resistance that prospective college students express regarding the lack of “prestige” associated with living at home while attending community college.

Perhaps the most unlikely proposal is “No new taxes.” When’s the last time we have heard about government objectively seeking to limit spending in order to allow current tax revenues cover services? I never knew a politician who didn’t love to embrace tax revenue, either openly or covertly.

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Next, speaking of parents paying for college, I found news about another study that has a surprising outcome:

The more financial support parents provide for college costs, the lower their children’s grades, national study finds.

As author, Scott Jaschick notes:

Much discussion about higher education assumes that the children of wealthy parents have all the advantages, and they certainly have many. But a new study reveals an area where they may be at a disadvantage. The study found that the more money (in total and as a share of total college costs) that parents provide for higher education, the lower the grades their children earn. …

… The study — “More Is More or More Is Less?” — is by Laura Hamilton, an assistant professor in the School of Social Sciences, Humanities and Arts at the University of California at Merced, and was just published by the American Sociological Review (abstract available here), the flagship journal of the American Sociological Association. …

… This finding backs the idea that parental financial support can act as a “moral hazard” in that students make decisions about how seriously to take their studies without having personally made the investment of cash in their educations. …

… Before parents reading this article cancel those spring semester tuition checks and Facebook message their college-age kids to get jobs, there are two important caveats to the study.

One is that the study found a positive association (even controlling for other factors) between increased parental contributions and graduation over five years. …

… The second … many parents provided high levels of support only to be shocked (and, she said, angry) that their daughters weren’t earning good grades. …

… In April, Harvard University Press will be publishing a book, Paying for the Party: How College Maintains Inequality that she wrote with Elizabeth A. Armstrong, associate professor of sociology at the University of Michigan. That book argues that affluent students — very much encouraged by their colleges and universities — waste time and opportunities in college on “a party pathway” organized by the Greek system. The work argues that students who bypass the system may suffer social costs, but are likely to emerge with a much better education. …

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So, there you have views from two sides of the mountain of college costs, keying on parental perspectives. The common thread between the two appears to be direct institutional involvement. On the one hand, we have data that show that the cost of college has risen over 400 percent in 25 years, and on the other hand, as Jaschik notes, “Further, Armstrong argues that the party system present at institutions with the affluent students to afford it ends up hurting the educational experience of all students.”

Thus, if we’re looking for a scapegoat here, let’s just blame the schools themselves. Clearly, something has to change … and soon.

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Be sure to check out all my college-related articles at College Confidential.