Private colleges have cut sticker prices 54% this year, giving record discounts on tuition fees. But make no mistake about it. These markdowns rarely translate into real savings and often condemn families to debt bondage.
Few families can afford tuition without reduction, but colleges rarely give students enough financial assistance to make attendance truly affordable. Even so, almost all students choose schools based on factors other than affordability, a Gallup poll found, often confusing “good fit” with attending “dream universities” regardless of the cost.
Figuring out how to finance a degree without going bankrupt or over-borrowing is what makes the “right fit” so complicated. Colleges and families define “the right fit” very differently. Families use emotion to find “suitable” colleges. Colleges use logic, secret formulas, and algorithms to select the “right” students they need to meet their income goals. This disconnect – between what colleges and students want – can lead to debt and disappointment.
Renaming the tuition discounts as ‘merit aid’ and ‘scholarship’ is one of the many moving emotional appeals that university executives use to tap the veins that fuel effort, bragging rights and rights. aspirations. Adopting the marketing and advertising strategies of Disneyland, Starbucks, and luxury retailers, they’ve created consumer experiences to draw post-teens to their campuses for products and services that have little to do with it. learning.
They feature students ripped from the pages of Abercrombie catalogs in ambitious brochures and websites featuring ivy-covered buildings and immaculately manicured grounds. They’ve replaced smelly gyms and dorms with resort amenities, enticing families with extravagances few Americans can afford – concierge services, rooftop pools, outdoor theaters, fitness centers, water parks. lazy river, hot tubs, saunas and climbing walls. They charge hefty prices for income-generating accommodations with granite countertops, stainless steel appliances, 50-inch flat-screen TVs, rainfall showerhead speakers, floor-to-ceiling windows, and decks offering great views. amazing views.
Emotion, not logic, is why parents send their kids to universities they can’t afford. Families are often so invested in an emotional “good fit” that they frequently choose colleges that leave them crippling debt that cannot be wiped out in bankruptcy. But the excitement, affection, and passion that families feel for a particular campus often has little to do with how colleges identify and enroll the students they need to fill their freshman classes.
Hardly anyone understands the impact of rising tuition fees and family income on how colleges sort applicants. It’s by design.
To increase rankings and revenues, colleges hire consultants called “Enrollment Managers.” Working in the dark, enrollment officers create algorithms and use statistical analysis to calculate the lowest possible tuition reduction to make students feel so eager that they are willing to pay inflated prices or go into debt to register.
Almost always, the algorithm makes the same request: admit richer children. This is why schools often give higher discounts to families with incomes over $ 100,000 than to students from families with incomes below $ 20,000. Why? Because awarding “merit scholarships” of $ 30,000 to two well-off, less qualified students generates more income than giving the same scholarship of $ 60,000 to a single candidate of middle or low income.
It’s no wonder that as college costs skyrocketed so did debt. Private college tuition fees have increased nearly 1000% since 1980. Average college debt, $ 3,900 in 1980, is now nearly $ 37,000. Almost 45 million Americans hold a total of $ 1.71 trillion in student loans.
The richer the school, the higher its ranking in the “Best Colleges” in the US News & World Report, and the more families looking for the “perfect fit” campuses seem to want them. A Californian mother whose daughter chose the more expensive University of Miami over the University of California, Merced said it was a “better fit.” Miami ranked higher and gave her daughter a merit scholarship. Plus, she says, it’s “like going to school in a Ritz Carlton. When you walk around campus you think I know where my money is going.
But appearances can be misleading. Finding the right financial fit first keeps families from falling into the emotional traps the university has deliberately set. Debt has obsessed families for decades, especially if students leave college without a degree. Bankers don’t care about the right fit going awry. Like death and taxes, payments come due.