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September 24, 2013 3:57 PM Higher Ed’s Mysterious Tipping Point

By Daniel Luzer

A common background worry many education policy analysts have is that college costs are rising so rapidly that the country may be reaching a “tipping point.” Students and their families may conclude that college just isn’t worth it anymore. They haven’t, but they may also not realize how much they’re paying.

As Oklahoma State University Institute of Technology President Bill Path wrote earlier this year:

The general public watches helplessly as the cost of college tuition goes up every year. They have observed that more and more students are burdened with overwhelming school loan debt after college. They have seen unemployment lines growing longer across the country, and have noticed a rise in the number of recent college graduates waiting in these lines. Out of loyalty and respect to its many revered institutions, the public has been very slow to hold higher education accountable in such affairs. But make no mistake — if substantive changes do not take place, the tipping point of public opinion will shift to be against higher education. Even now, many college graduates are recognizing they have been ill-prepared for today’s workforce, and they are beginning to ask, “Was my college education worth it?”

We’re not there, but a lot of the problem may have to do with just how complicated its become for students to discern how much education really costs, and how they might pay for it.

According to recent article at Inside Higher Ed

Has the rising cost of college reached a tipping point? Perhaps not, said three panelists at the National Association of College Admissions Counselors’ annual conference in here last week. They offered their analysis at a meeting where many private college officials were very worried their sticker prices are scaring away would-be students.
Steven Graff, senior director of admissions and enrollment services at the College Board, said it’s become “knee jerk” to say college is too costly.

This is surely true, but at what point would college become too costly, then?

Graff and two consultants from the enrollment management firm Art & Science Group argued that there is a significant difference between college cost and college price, in part because of financial aid, and there are also rather significant differences among prices at different kinds of institutions.

Okay, but that’s the problem, here.

Graff is right, of course, that the rising published price of does not at all reflect what the average student really pays for school. But it’s not just the list price of college that’s rising. Net price, what people really pay, is rising too.

Here’s a graph of the net cost of public colleges, which most American students attend, produced by Matt Bruenig:

NetCost

By not being clear about price and cost, and giving students ambiguous, complicated, and conflicting information about the cost of college, students appear to actually be taking on a lot more debt than they can perhaps afford.

That’s the problem with “financial aid.” It’s obscures what college really costs. Because it means both loans and grants, it’s actually very difficult for students to figure out if they’re paying too much for college.

We haven’t, at this point, reached an actual tipping point, which would mean a declining percentage of high school students actually applying to college. What we have seen is a number of students from poor families not applying to selective colleges where they might be admitted, probably because they’re intimidated by the published price.

At the same time, low income students are lured to low quality, or even for-profit schools, because those institutions suggests they’re affordable because attending these schools will lead to better jobs.

Surprise, if you make the system hard to understand, people don’t operate very well in that system.

Path suggested that that the way to avoid the tipping point is for colleges to “make room for marketable and employable skills training.” Perhaps, but this tipping point is a financial thing. A far more effective strategy is to make college cheaper for students, and also to make it really clear how much college costs, and cease obscuring this information with complicated talk about “financial aid” and vaguely imporved life outcomes.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

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