Net Price isn’t always

If one is going to write about how net price for college enrollment, it might be useful to really understand how it works. And to understand the College Board is less interested in reality and fact, than supporting its business models.

Taking into account financial aid — some of which comes from the colleges themselves, some of which comes from the government — the average tuition and fees were $12,460 at private colleges last year and $3,120 for in-state students at public four-year colleges, according to the College Board. At those prices, college is an investment with an excellent return for the vast majority of students who graduate.  from How the Government Exaggerates the Cost of College

Putting aside that these figures include tax benefits that don’t show up until the college year is almost done, there are two very practical problems with how they are presented here.

1) The author leaves out the $9500 in room and board, and thus the net price at a four-year public for most students is $12,620. Like it or not, this is a real cost for all students, whether on-campus or not.

2) More importantly, all of the grant aid the student receives (some of which comes from other students, including those have to borrow their full cost of attendance), is based on the total cost of attendance – which includes room and board. Without this consideration, their grants would be far less.

From the College Board report:

The calculations of average net price for full-time undergraduates in Figures 10 and 11, as well as the calculations in online Tables 7 and 8, are a best approximation and are based on the aggregate amounts of each type of aid reported in Trends in Student Aid 2013 and on the allocation of each type of aid across institution types and between part-time and full-time students reported in 1993, 1996, 2000, 2004, 2008, and 2012 National Postsecondary Student Aid Study (NPSAS) data. 

There is no way to use these data to allocate aid intended for tuition and mandatory fees v. non-mandatory fees and other expenses. I’m not sure what value the College Board report has, other than to make people feel good about a myth. I find it terribly misleading, much like their test scores.

The basic issue is this. Living, eating, and having a safe place to sleep are part of the costs of attending college. There is no real net price that excludes those costs, save for students that are fortunate to be able to attend a local college and live with their parents rent-free. To ignore these costs as part of net price is to ignore the realities of most students – especially those attending institutions, public and private, requiring students to live on campus at least the first year. And those students that don’t live near a four-year institution.

 

 

 

Be nice. It won't hurt either of us.

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