Admit This

Relative Value in Colleges

We've been having some power outages in our area over the past several months. Maybe it's due to the strain being put on the regional grid by all the air conditioning people are using. This summer (as I write this) has been the hottest in many years. In my experience, it has been the hottest since 1988, when I saw some legitimate 100-degree days. Anyway, the annoying (and potentially destructive (think frozen foods)) outages got me to think seriously about buying a power generator that could get us through a day or two of a more serious outage. A while back, I asked a local HVAC contractor for a bid on a "backup" generator for my house and his bid came in at just under $10,000 (!). Well, I didn't need (or want) to spend that much.

So, after yet another minor (reset all the electric digital clocks in the house) outage yesterday, I purposed to find a reasonably priced unit that was nothing stellar but one that got excellent reviews and provided excellent value. (See? We're finally getting closer to the point here.) I found one on for $300 and they offered me free shipping. The reviews averaged 4.25 stars out of 5. That's a high rating. People said that this unit would do exactly what I needed: get me through a day or so of no power and allow our lives to be relatively "normal." So, I ordered it. I'll need to buy a few accessories, which won't cost more than $100. Thus, I'll be somewhat prepared the next time the grid goes down for a while.

Now we're at my point. When it comes to searching for the "right" college for your needs (and, ideally, your family's financial needs), you probably don't need the most expensive school you can find. The analogy might be that the $10K generator I got the bid on might be a lot of overkill for me with a low ROI (Return on Investment). However, the $300 generator I just bought may be (I know, a solar flare could completely destroy our power grid; anything's possible) an ideal solution for my needs. More finely tuned analogy: $10K generator = $50-60K-per-year college; $300 generator = possible two years at a community college and two more at a $25-30K college. In other words, I get backup power when needed with a strong return on investment, and you could get that four-year degree for "half price" with a similarly stellar ROI. Let's look at this issue another way.

Accordingly, have you ever wondered if a high price tag means that a certain college delivers a high-quality education? Let's examine some issues.

Higher education is a lot like any other consumer product. In most cases, you get what you pay for. Aside from its Nobel-laureate-laden faculty, one aspect of the top-priced schools that struck me recently while walking the grounds of a picturesque Ivy League university is the advantages 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 tasty) 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. The nice stuff isn't cheap, though.

This fall, the nation's most expensive schools will have student budgets (tuition, room and board, fees, books, and travel) approaching $60,000. That's right--$60,000 per year. That's more than many families earn in one year. These are not just the Ivy League schools. Some highly selective, "non-Ivy" colleges and universities have price tags in that region.

Other colleges and universities, such as two-year, community commuter schools, can cost as little as $10,000 or less per year. That's about 80 percent less than the Big Guys. What's the difference? Can one school be six-to-seven times better than another can?

It depends on what you're looking for. Many people are looking for the least-expensive route to a professional or technical credential that can move them into a skilled job. These days, that seems to be a significant priority. 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, though it's more expensive. This would be the "go to a local two-year community college then onto a regular college" approach.

As an alternative consideration, keep in mind that expensive schools may have superior financial aid available. This can bring their net cost closer to some lower-priced schools. One controversial theory says, "Get into the best and most expensive school you can." Financial aid is the reason. In theory, the more expensive schools usually have more money to give in financial aid (depending upon how badly their endowments were hurt during the crash of 2008-9), thus making their true cost somewhat lower for families who really need the help.

So, don't forget to shop for value. It's entirely possible to get what you need for a lot less than you think. "Generate" some thoughts about that.


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