Government can overestimate college costs

Federal listing of college costs often fail to calculate the rising supplements provided by student aid, grants, and loans.images

As the New York Times reports, “The government’s official statistic for college-tuition inflation has become somewhat infamous. It appears frequently in the news media, and policy makers lament what it shows.No wonder: College tuition and fees have risen an astounding 107 percent since 1992, even after adjusting for economywide inflation, according to the measure. No other major household budget item has increased in price nearly as much.But it turns out the government’s measure is deeply misleading.

“For years, that measure was based on the list prices that colleges published in their brochures, rather than the actual amount students and their families paid. The government ignored financial-aid grants. Effectively, the measure tracked the price of college for rich families, many of whom were not eligible for scholarships, but exaggerated the price – and price increases – for everyone from the upper middle class to the poor.The good news is that the Bureau of Labor Statistics has gradually begun to change its methods since 2003, to capture the effects of financial aid. It will take more time to know how well those efforts are working. But the bureau won’t alter the historical data, which means the long-term comparisons will never capture the actual cost of college for American families.

“Those oft-cited comparisons, notes Sandy Baum, a George Washington University professor and an expert on college costs, says, are “certainly misleading.”

“The discrepancy matters because the country is in the midst of a roiling debate about whether college is worth it. Various pundits on both the left and right have taken to claiming that higher education is overrated and often not worth it. The shocking increase in college costs, according to the official Bureau of Labor Statistics numbers, is part of their argument. Continue reading “Government can overestimate college costs”

Public university costs leveling off

Tuition and fees at public universities increased less than 3 percent this academic year, the smallest rise in three decades, according to the annual College Board reports on trends in pricing and aid, reports the New York Times today.

“This does not mean that college is suddenly more affordable, but it does mean that the rapid growth of recent years did not represent a ‘new normal’ for annual price increases,” the report on pricing said.imgres

“At the same time, the large increases in grant aid from 2009 to 2011 have slowed and have not kept pace with rising tuition. As a result, the amount students and families actually pay has risen as well. The average published annual tuition and fees for in-state students at public universities total $8,893, up 2.9 percent from last year. But most of these students pay far less: When grants and deductions of tax credits are taken into account, the net amount students pay is about $3,120.

“Only about a third of full-time students pay the full published tuition price with no assistance. And most students from families with income below $30,000 got enough aid to cover their tuition and fees, although they still have costs for room and board, which adds $9,498.

“The news is not as bad as it has been,” said Sandra Baum, a senior fellow at the Urban Institute and lead author of the reports. The new data, she said, should calm fears that college costs are spiraling out of reach: “It does seem that the spiral is moderating. Not turning around, not ending, but moderating.” For out-of-state students, tuition and fees averaged $22,203, a 3.1 percent increase from last year. And at private four-year institutions, the average published tuition and fees are $30,094, up 3.8 percent from the year before.

“College prices have risen faster than the prices of other goods and services in recent years, even as family incomes have declined. And the economic recovery has benefited mostly those in the highest income brackets. Jane Wellman, a higher-education policy analyst, said the trend reports showed that many public institutions have made serious efforts to rein in their spending — especially community colleges, whose spending has declined sharply over the last decade. Continue reading “Public university costs leveling off”

College enrollments drop

College enrollment fell 2 percent in 2012-13, the first significant decline since the 1990s, imgresbut nearly all of that drop hit for-profit and community colleges; now, signs point to 2013-14 being the year when traditional four-year, nonprofit colleges begin a contraction that will last for several years, reports the New York Times today. “The college-age population is dropping after more than a decade of sharp growth, and many adults who opted out of a forbidding job market and went back to school during the recession have been drawn back to work by the economic recovery.

“Hardest hit are likely to be colleges that do not rank among the wealthiest or most prestigious, and are heavily dependent on tuition revenue, raising questions about their financial health — even their survival.

“There are many institutions that are on the margin, economically, and are very concerned about keeping their doors open if they can’t hit their enrollment numbers,” said David A. Hawkins, the director of public policy and research at the National Association for College Admission Counseling, which has more than 1,000 member colleges.

“The most competitive colleges remain unaffected, but gaining admission to middle-tier institutions will most likely get easier.

“Colleges fear that their high prices and the concern over rising student debt are turning people away, and on Wednesday, President Obama again challenged them to rein in tuition increases. Colleges have resorted to deeper discounts and accelerated degree programs. In all, the four-year residential college experience as a presumed rite of passage for middle-class students is coming under scrutiny.”

More at: http://www.nytimes.com/2013/07/26/education/in-a-recovering-economy-a-decline-in-college-enrollment.html? 

The price of knowledge

The Education Department has updated its annual list of the country’s most expensive colleges (by net price and by list price), and, as always, this year’s list contains familiar names. The below story excerpt comes from today’s Inside Higher ed about the report:

“Columbia University narrowly edged out Sarah Lawrence College — a perpetual contender on the list, and one that has defended its high tuition — for the most expensive tuition list price, at $45,290 in the 2011-12 academic year. Among four-year public colleges, the University of Pittsburgh surpassed Pennsylvania State University for the most expensive list price, at $16,132. And the most expensive net price (based on what students actually pay after financial aid) was the School of the Art Institute of Chicago, at $42,882, on a list dominated by colleges specializing in music and visual arts. These figures do not include room and board, books, or various fees, which at the most expensive private colleges can push a full year’s sticker price above $60,000.

“The lists, posted on the Education Department’s College Affordability and Transparency Center, are a sort of “hall of shame” intended to force colleges to be more transparent about both their list prices and the prices students pay after financial aid. The center offers nine lists in all, breaking colleges down by sector and differentiating between net price (the price students pay after grants) and sticker price.

“They debuted in 2011, required by the 2008 reauthorization of the Higher Education Act. In the past, they’ve been greeted with some fanfare: press conferences from the Education Department touting increased transparency and objections from the named colleges about the lists’ flaws. Last year, Education Secretary Arne Duncan seized on the release of the list as an opportunity to criticize states for yanking support to higher education.

“Colleges have criticized the lists, arguing that they oversimplify — many factors are driving tuition increases, including shrinking state budgets at public institutions.

“But the lists’ power appears to be fading, released with less fanfare and greeted with less media coverage than in the past. A Columbia University spokesman said the institution had received few media requests about their position on the list.

“In response to the lists, Columbia pointed to its generous financial aid policies. ”A conversation about college costs must also include a conversation about financial aid and net price,” Robert Hornsby, assistant vice president for media relations, said in a statement. “As a result of our full-need financial aid program, Columbia has continued to attract among the most socioeconomically diverse student bodies among peer institutions. The university takes pride in its continued commitment to ensuring that students can attend Columbia regardless of their family’s financial circumstances.”

Read more: http://www.insidehighered.com/news/2013/06/28/education-department-releases-annual-tuition-pricing-lists#ixzz2XaGGGwCR
Inside Higher Ed

Separate yet unequal

Higher education is increasing divided by economic class.

It’s been almost 60 years since the 1954 Supreme Court decision Brown vs. Board of Education led to the dismantling of segregated schools in the South, reports Huff Post College.  “While legal segregation was halted, public schools especially in large cities have become increasingly segregated by circumstance. Now higher education is under scrutiny for having established a segregated system, this time primarily by socio-economic status.Unknown

“While undergraduate higher education in the U.S. can be parsed in a variety of ways, the biggest division is between the growing community college segment and that of four year public and private universities and colleges. Surprising to many, community colleges enroll 45% of all undergraduates and that fraction is growing. Moreover, the majority of all black and Latino undergraduates are enrolled at community colleges.

“Compared with students at senior institutions, community college students come from markedly poorer families. The details are documented in new research, Bridging the Higher Education Divide, by The Century Foundation. The report’s conclusion is clear: four year colleges, especially the elite privates, draw primarily from the top income brackets, while community college students come primarily from lower income groups. And since 1982 the gap is widening with fewer community college students coming from the top fourth of the income scale.

“Moreover, community colleges are neglected when it comes to federal and state funding. Thus expenditures by the federal government go primarily to private and public research institutions and state support per student is typically higher at state universities compared with community colleges. Continue reading “Separate yet unequal”

Prestige versus value in college choice

Having a choice is generally a good thing, and being able to choose among several college acceptances should be a wonderful thing indeed, as Paul Sullivan wrote this past week in the New York Timesimages

“But let’s face it: the cost of a college education these days ranges from expensive to obscenely expensive. So the decision is likely to be tougher and more emotional than most parents and children imagined as they weigh offers from colleges that have given real financial aid against others that are offering just loans.

“While some students will be able to go to college only if they receive financial aid and others have the resources to go wherever they want, most fall into a middle group that has to answer this question: Do they try to pay for a college that gave them little financial aid, even if it requires borrowing money or using up their savings, because it is perceived to be better, or do they opt for a less prestigious college that offered a merit scholarship and would require little, if any borrowing? It’s not an easy decision.

Full story: http://www.nytimes.com/2013/04/20/your-money/measuring-college-prestige-vs-price.html?pagewanted=all&_r=0