College price tags are meaningless.
If you’ve spent much time on my college blog you already appreciate that these numbers don’t mean anything, but most families don’t.
About two thirds of students attending state and private schools receive scholarships or grants and the number rises to about 88% at private institutions, which have to offer more discounts for students to consider pricier institutions. The average sticker price of a private college is now equal to at least 40% of the annual income of 80% of Americans. Obviously families can’t swing the cost without discounts.
I’m revisiting this subject because of an essay that I received yesterday that was written by Jon McGee, the vice president of planning and public affairs at College of St. Benedict and St. John’s University, in Minnesota. St. Benedict is a women’s college and St. John’s is for men.
In the piece that was posted on the website of the Lawlor Group, a higher-ed marketing firm, McGee observes that an institution’s average net price, what someone would pay after scholarships are deducted, isn’t anymore relevant than sticker prices. What might astound you is how many different prices a school can offer its prospective students. At St. Benedict, for instance, 2,041 students are paying 942 different prices. The 1,865 young men at St. John’s are paying 789 different prices.
McGee also noted that not a single single student at the schools ended up paying the average net price. And this, he added, was not unusual. Here is where you can read McGee’s entire post:
Customized Pricing in Higher Education
The critical question that remains is this one: A school may charge hundreds of prices, but what is the one that it proposes to charge your family?
In the past, you had to wait for financial aid letters to answer that question. But now families can use any school’s net price calculators to get a personalized financial aid estimate of what the institution will cost. It’s too late for the parents of high school seniors to use the tool, but I’d urge everyone else to take advantage of these calculators. Here are some of my posts on the tools:
A New Way to Add Up the Cost of College
College Cost Calculators: Getting Wildly Different Answers
Playing Hide And Seek With Net Price Calculators
Finally, the more enthusiastic a school is about envisioning a teenager as a student on its campus, the more likely it will offer an attractive price. I wrote a post about this recently on my college blog:
Beware of Preferential Packaging
Lynn O’Shaughnessy is the author of the upcoming second edition of The College Solution: A Guide for Everyone Looking for the Right School at the Right Price.
Read More on The College Solution:
An Email from a Disillusioned Mom
What’s Missing From This Financial Aid Letter?
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