Five Questions to Ask: Higher Education Finance
- What are you defining as costs and expenses?Make sure you get your editor and your sources to define exactly what they mean when they talk about college “costs” or “expenses.” While some people use the word “cost” to mean the price students pay, others mean the amount the college actually spends on each student, which is often much higher than tuition.
(Yale says their cost of educating a student is double tuition, for example.) Colleges quote many different “costs.” For example, cost of instruction is typically lower than a college’s total expenditures, which includes other expenses such as counseling, sports, and research.
- What do you mean by price? Make sure you get your editor and your sources to define exactly what they mean when they talk about a college’s “price.” Each college has at least 2 kinds of prices: “sticker” (i.e. published) price, and “net” price, or the price a student pays after grants and scholarships (not loans or work-study) are subtracted. Only about half of all college students pay full sticker price. And the National Association of College and University Business Officers says less than 20 percent of private college students pay those schools’ sticker prices.
Make sure you know the components of whatever price you use. Some people think price is just tuition, or just tuition and fees, or just “direct costs,” which are generally viewed as tuition, fees, room and board. Some schools quote an “out-of-pocket” price, which is s sticker price minus grants and loans.
If you want to quote total cost, and you’re having trouble finding it, remind the schools that federal law requires colleges to “make readily available to current and prospective students” a full cost of attendance that includes tuition, fees, room, board, books, travel and a budget for miscellaneous items. (See 34 CFR 668.43. Unfortunately, the law does not say when, where or how…) If you’re writing a student loan story, try to include an Annual Percentage Rate, not just the interest rate. All consumer loans – except for federal educational loans – are required to add fees and interest rates together to give consumers their true costs. If you’re writing about PLUS loans, use a web APR calculator to add in the 4 percentage point fees to let students and parents know how much that loan is really going to cost them.
- Price for whom? Most public research universities (though very few private colleges) now charge “differential tuition” or extra fees for some courses, so that some students pay more than the standard published tuition. (See research by Glen Nelson, currently senior vice president of finance and administration for the Arizona Board of Regents.) At Penn State, for example, upperclassmen pay a higher tuition rate. Many other colleges charge higher tuition for science classes. Some even add extra fees to journalism courses!
- Compared to what? You can add more value to your readers if you put higher ed finance information into context. The College Board’s “Trends in Pricing” reports, for example, generally give you the option of looking at prices after subtracting inflation out. “Measuring Up” analyses, for example, very helpfully rate each state’s average public university in-state tuition as a percentage of that state’s median income, which give a good gauge of affordability. News stories about student debt load would be improved by putting debt payments into context. This op-ed by Mark Kantrowitz and Lynn O’Shaughnessy noted that the spring 2012 debate over a possible increase in the Stafford loan interest rates would amount to about $6/month per student. (And it also put the debate into a larger context of budget cuts to financial aid.)
- Is that an expense or an investment? As college costs and prices rise, more colleges and economists are focusing on what students and taxpayers are getting for their money. Many colleges have issued reports showing how their activities – such as sports events or research – pay off in the long run because they generate economic development and tax revenues. The Delta Project calculates a cost per graduate for colleges Collegemeasures.com has looked at the costs and payoffs for degrees at community colleges. Payscale.com publishes its estimate of the return on investment for several hundred colleges. Georgetown University’s Center on Education and the Workforce has recently published analyses showing which degrees return higher incomes to graduates.http://advocacy.collegeboard.org/