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U.S. Department of Education lists colleges by price
Mortarboard with price tag
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Tess Vigeland: Families trying to figure out just how much college is going to cost have some new tools. The U.S. Department of Education is out with a new website listing the cheapest and most expensive colleges in the country. Sitting Bull College in North Dakota gets the prize for lowest price at a public college.
The lists aren't just a public outing, though. Schools that have jacked up their prices the most in the last few years will have some explaining to do to the feds. From the Marketplace Education Desk at WYPR in Baltimore, Amy Scott looks behind some of the numbers.
Amy Scott: Some of the numbers are eye-popping. Consider Clayton State University in a suburb of Atlanta. Between 2007 and 2009, the public university's net price rose more than 1,500 percent. Net price is the average cost of attending minus grants and scholarships.
John Millsaps: One could make an assumption that someone is increasing costs through the stratosphere at that institution.
That's John Millsaps with the Georgia Board of Regents. He says that assumption wouldn't be quite right. During the years in question, Clayton State went from being a commuter school with no student housing to one with dorms. So it wasn't tuition, but dorms, that pushed the price up.
Millsaps: The important lesson I think with this is to simply look at the numbers and then start asking the questions of the institution to understand what the numbers mean and why.
Schools with big net price increases like Clayton State, or big tuition hikes like Arizona State, will have to explain those increases to the Department of Education. The idea is to give students and families more information -- and to shame colleges into lowering prices.
Lucie Lapovsky says it's probably not going to work. She's a higher education consultant and former president of Mercy College in New York. Lapovksy says the biggest increases are mostly at state schools.
Lucie Lapovsky: Which increased their tuition in large part as a reaction to significant reductions in state support. They don't have too many alternatives to maintain their revenue stream.
Another reason some schools jack up their prices is us. Tuition at private Jamestown College in central North Dakota jumped 39 percent, from $11,500 to $16,000 a year.
Polly Peterson is vice president for institutional advancement. She says the school raised its tuition to help pay for academic improvements, but also for appearances. Other colleges in the Midwest charge more.
Polly Peterson: And as we recruit students in that area, we do get that question. Parents will ask, "How can you offer the same quality if you're not charging the same prices?"
But again, the numbers don't tell the whole story. At the same time Jamestown raised tuition, it increased scholarships, so the actual cost of attending -- the net price -- went up a lot less.
Sara Goldrick-Rab teaches education policy at the University of Wisconsin-Madison. She says colleges get away with this because students and their parents let them.
Sara Goldrick-Rab: They're not walking away. And what I'm worried about is that, maybe students from low-income families will walk away. But the middle class and the upper class, they will continue to purchase it. And so the colleges and universities have very little incentive to do anything else.
Consumers armed with more information might start to fight back. The Department of Education's new website gives some of that information, if you're willing to do some digging.
I'm Amy Scott for Marketplace Money.
Tess recommended an online school in a June show, I believe, that is a reasonable price and also respected quality education. Can you tell me the name of the school, so I can check it out please? Perhaps it was in Washington. Thank you for your help.
Sandi Ohlen
College pricing stories continue to frustrate me, because nobody notices it's a bubble.
A degree is like your house: some people have nicer ones, some people have simple ones, but we will pour money we don't have into buying one, because we're convinced we just can't live without it... and we're bankrupting ourselves to get there.
And it's not going to get any better when we're telling people "sure, ditch your entire life's savings for a $100K MBA."
Those "transparency' lists are not going to be very helpful to most prospective students because none of the information is personalized. The prices shown do not account for how much merit or need-based aid a student can expect to receive to off-set rising costs.
Today, most families don’t know the full cost of a student’s education until after college acceptance. But the mystery about what college will really cost anyone ends Oct. 29th - the deadline for all of the nation's 6,800 public, private, and for-profit colleges to post online a Net Price Calculator.
For the first time, prospective college students and their families will be able, in minutes, to get a personalized estimate of - at minimum - their financial aid eligibility and net price - before applying to any college.
NPCs are expected encourage more students, especially those from low-income households, to attend college. The premise is if you learn in advance you're eligible for financial aid, you'll be more likely to apply. The insight of knowing your real cost of college before applying should help students choose colleges that won't burden them with overwhelming debt.
Custom net price calculators posted by many colleges, including the Indiana State University, the University of Alabama at Huntsville, the University of Vermont, West Virginia University, Drexel University, Cornell, the University of Arkansas at Fayetteville and about 400 others so far, use sophisticated technology to produce very reliable aid, net price, and out-of-pocket cost estimates. You can try ISU's NPC here: https://indstate.studentaidcalculator.com.
However, hundreds of other colleges used the free, federal NPC template to post their NPC, and experts have recognized that it often is inaccurate many students. For example, it uses need-based aid criteria to determine merit aid.
NPCs are expected to radically change how families plan for college and how colleges recruit. Many enrollment pros have proposed NPCs could affect college choice more than college rankings by news magazines have.
Personalized aid estimates before apply to college will give students insight into which schools will be most affordable for them.
This shaming idea is designed to make folks think that the government is doing something, anything to contain the rising cost of college in the US. It will have as much impact on the cost of college as asking say credit companies or hedge fund managers to observe some non-existent notion of responsibility when lending or investing. It's utter rubbish. The cost of college is already beyond the reach of many Americans. Lets do something concrete about that.
