It’s not just that college is expensive. It is. But rather the unexpected problem in actually being able to answer the basic question, “how much does college cost?” Unless you’re prepared to pay the sticker price, it’s almost impossible for students to know how much they are going to pay for college until they get their financial aid awards. And even those lucky few who aren’t relying on financial aid for college, will still find it difficult to identify college costs and compare different schools. The only thing that can be more difficult to figure out than college costs is probably healthcare prices. Yes, it’s that bad.
And here’s why. There are at least five different ways to measure college costs and I’m not talking about how many cars it would take to pay for a college compared to how many play stations. I’m talking about all of the ways that makes it “challenging” to compare apples to apples when considering college costs.
So let me count the ways.
1. Tuition is just one part of college costs
This would seem to be a pretty straight forward way to compare college costs, right? It’s just the price the school is charging for attending class. However, the tuition can change based on the type of class the student is attending. There’s the expected differences between graduate and undergraduate classes. But there can be different tuition rates depending on your major. Students in colleges of Business, Engineering, or Healthcare at a university may pay higher rates than those in Liberal Arts. The Department of Education actually collects tuition data for a schools top three most popular majors. Students can’t just compare the listed tuition for colleges on search websites, chances are they need to do so by major.
2. Total Cost of Attendance may not be
This is the total amount that students pay to attend college. It includes tuition, room and board, and books and fees. Colleges like to just compare tuition because it makes the costs look cheaper. Room and board generally adds another $10,000 to the cost of college. Of course, the amount will vary depending on the room and meal options a student chooses. It used to be that at public institutions, the cost of room and board would easily exceed tuition so living at home was a major money saver. Not anymore.
Books and fees are another cost that can vary greatly depending on the school, student, and major. College search websites are reporting averages but depending on their major, some students will want to visit the college website for a closer look. Health care majors and those in Education related fields can find significant fees for various licensing requirements.
Rather than raising tuition, which is the way colleges liked to be compared, colleges will add mandatory fees to cover funding for transportation options, athletic facilities, recreation options, and so on. Students will find that they can opt out of very few of these fees. Think of Total Cost of Attendance like the bottom-line sticker price when you’re looking at the price of a car on the lot.
3. In-state and Out-of-state Tuition
Public universities usually charge out-of-state students a higher tuition rate (not always, see Cheapest Out-of-State Colleges.) Initially, this was because in-state tuition was subsidized by the state’s taxpayers through legislative appropriations. Why would the taxpayers of one state want to provide financial support to students from another state?
However, as state funding decreased as a percentage of public school’s budgets, many schools started increasing the out-of-state tuition as a way to make up the difference. Popular flagship universities found that they could charge out-of-state students as much as private colleges and the students would still come. Unfortunately, too many families don’t realize the cost differences until after they receive their financial aid award letters.
4. Set Price or by Credit
Both public and private institutions will price classes per credit hour. Sometimes one class will consist of three credits, common among public institutions, sometimes it may just be one credit as found at some private schools. So we’re already talking about a problem in comparing apples to oranges for college costs. But it can get worse.
A college may charge full-time students a set price regardless of the number of hours the student takes. This is great for students who take more than the minimum hours but not for those who might need to cutback a class for a semester. Other schools will charge by the number of credit hours, regardless of the minimum required to be considered full-time. That means the students that require more classes and labs to graduate will be paying more than the average students.
One last thing about credit hours. Remember the extra fees we talked about? They can be added to the credit hours of specific classes by major, greatly increasing college costs. For example, music students may find an additional $192 added to each credit hour for lessons. Just one more thing to worry about as students pick their majors.
5. Average Net Price
Colleges have to report their average net price. This is basically the average price students ended up paying (based on total costs) after deducting any gift aid. Gift aid includes scholarships and grants but does not include loans or word-study. Average net price is almost always significantly lower than the sticker price.
Some of the most expensive private schools have very low average net prices because of their generous financial aid programs. Other colleges have lower average net prices because they provide some combination of merit/need-based aid to the vast majority of students. It can be difficult to estimate how likely an individual student is to pay just the average net price. However, it can be a useful tool to compare colleges in terms of overall generosity and actual costs.