College Affordability

Financial Aid and college affordability is a specialty area for me as I feel very strongly about it. Most families with college bound children are concerned about the rising cost of college tuition, their ability to afford college, and the financial security of their family and child. Independent Educational Consultants with expertise in the area of financial aid are uniquely positioned to assist families in not only identifying colleges that are good matches academically and socially, but financially as well. Sandy Baum, an economist who has studied financial aid in depth, has written extensively about net price differentials in her seminal study “A Primer on Economics for Financial Aid Professionals”. Regardless of how one views the ongoing debate about whether sticker price should be based on ability to pay (need), on merit, or on willingness to pay – college consultants should be able to explain the economic underpinnings of college pricing systems to their clients. What should also be addressed is the economic practice of price discrimination. Higher education is not unique in selling the same product to different consumers at different prices.

In today’s economy, it is difficult for individuals lacking a college degree to find a well-paying job. Even the remaining manufacturing jobs that have not been outsourced overseas require at least some post-secondary education. Having a college degree is what having a high school diploma used to be – an essential entry-level credential for many fields. Yes, many families overspend on education and overdose on student loans. The majority, however, graduate with a reasonable amount of debt ($26,000) – contrary to sensationalistic media reports that depict student borrowing at the margins.

In my practice I spend a great deal of time educating my clients about college pricing and provide strategies with the goal of making the process more affordable. Also, I encourage students and families to borrow as little money as possible – although, if unavoidable, maximum college loans of $20,000/30,000 is not an unreasonable amount in my opinion. I attempt to optimize the student’s chances of receiving merit based aid by identifying schools where the student will be in the top quarter of the applicant pool. Also, I assure families that many schools employ their own algorithms when awarding aid that have more to do with Enrollment Management than assessing need. In many cases the federal methodology is a starting point only. When borrowing, I encourage families that won’t qualify for federal need-based aid to still complete the FAFSA as this is required for the government funded loans which have much better terms and rates than private loans. Finally, I try to match students to schools with the likelihood that the student will experience success in college and graduate on time – potentially saving families the costs of changing majors, transferring or dropping out.