If you have kids old enough for you to be thinking about the college admissions process and how you’ll pay for it, you also need to be thinking about how you’re going to compare colleges. Because the fact is that you’re going to be comparing lots of colleges, the sooner the better. You’re going to compare colleges when you decide which colleges to visit, which admissions reps to talk to at the college fair, which colleges to apply to, and which one to ultimately attend. So take this opportunity to consider the various ways you can actually compare colleges and their relative worth to your family’s situation.
1. Review Rankings
Yeah, I know this seems like a gimme but it’s really not once you start doing a little digging. After all, there’s more than one set of college rankings out there. There are at least four magazines with college rankings, US News Best College Rankings, Money Magazine, Fortune Magazine, and Washington Monthly. Then there are other rankings like those from college search websites such as Niche and the Princeton Review, and non-college websites like PayScale.
All with different methodologies for ranking.
And that’s what you really need to understand if you’re planning on using college rankings as a way to compare colleges. Is the focus of the methodology what is important for your family? If you want an idea of how the various rankings differ and what it might mean, take a look at Best College Reviews Infographic on Comparing College Rankings. It will give you a taste of what you should be considering when using the rankings.
One thing to keep in mind when using rankings. Too often the “best of” or “top” colleges for whatever is being ranked, don’t take into account a student’s chances of actually being admitted. I think they would be more useful if they would provide the “best of” for different acceptance and cost categories. I know, silly me.
2. Compare College Acceptance Rates
Since I’ve brought them up, why would you compare colleges by acceptance rates? Well, there’s the obvious exclusivity factor that appeals to a lot of people. Many see being accepted by a school that rejects the vast majority of applicants as a validation of their hard work. It’s also seen as a “sorting” mechanism for other competitive opportunities such as graduate school and jobs.
What many don’t realize is that acceptance rates are also an indicator of how much you’re likely to have to pay for college. As acceptance rates decline, the average net price is likely to increase. The reason is simple. The acceptance rate represents popularity, and usually popularity among the most highly qualified students in the country. Therefore, colleges with lower acceptance rates, say less than 40%, don’t really have much of an incentive to offer generous financial aid to get students to attend.
Of course, there are some schools that do offer generous need-based aid but they are the exception, not the rule. So if finances are a concern, you might want to take a look at acceptance rates early in the college selection process.
3. Compare Test Scores
Once you get past the lottery colleges, schools with acceptance rates less than 20%, test scores can be a quick and easy way to estimate your chances of getting into a college. And for those who don’t test well, you might use the lack of required test scores as a preference for one college over another.
But using test scores to compare colleges can have a financial payoff as well. Colleges are much more likely to provide merit aid to students who are in the top quarter (75th%) of academic qualifications for the freshman class.
Finally, you can use the 75th% test scores as a sort of minimum acceptable level for those who are worried about academic challenge in terms of a peer group. When comparing colleges, you know that at least 25% of the freshman had test scores at or above this score. You can use the percentile rankings for the SAT and ACT test scores to get a better idea of what that might mean for the specific score.
4. Compare College Graduation Rates
Graduation rates is one of the most overlooked characteristics when comparing colleges. With some colleges charging over $70,000 a year, why wouldn’t you at least be aware of the college’s graduation rate?
When looking at graduation rates, the first thing you need to know is that the most commonly reported graduation rate is the 6-year rate. Unless you plan on paying for 6 years of college, you need to use the 4-year rate. The average 4-year graduation rate for public colleges was 40.7% and for private institutions was 56.4%.
Also, be sure to use graduation rates instead of retention rates or “freshman satisfaction” rates. They really aren’t the same thing and can be very misleading.
5. Look at Average Net Price
For those who aren’t prepared to pay the college sticker price, you need to compare colleges using the Average Net Price. Average Net Price is the average amount all students pay after deducting gift aid. This doesn’t include loans and work study. If you have two colleges that have the same sticker price, you can use average net price as a way to compare their financial aid generosity.
The problem is that it is only an average and the average may not apply to your specific situation. This is why you should always use a net price calculator before actually applying to a college. Yet knowing the average net price is a faster way to compare colleges than actually using the net price calculator in every situation.
6. Research Earnings by Majors
Given the ever increasing cost of college, it’s only natural that more people are taking post-graduation earnings into consideration when they compare colleges. The problem is that the data available don’t always make for accurate comparisons. The biggest problem is that graduates’ earnings will depend on their major and where they live. And none of the information currently available takes into account both considerations.
You can get average earnings of graduates by college at the Department of Education’s College Scorecard website. You can also search based on location and salary but too often it doesn’t list any results. Or it might just throw you into the Schools search field. Consider it a work in progress. PayScale includes specific majors/career information when it is statistically significant. However, you need to remember that PayScale is basing its analysis strictly on people using their service. Just stop and consider what this means for someone who is a teacher. How representative do you think PayScale is for teachers?
Obviously, this information is still in the development stage. However, that shouldn’t stop you from asking a school for whatever information they have on their graduates’ salaries by major.
7. Compare College Graduates’ Debt
Debt, the four-letter word that can be found when talking about any of the other factors I’ve just covered. Is a higher ranked school worth extra debt if you end up earning more? Should you consider more debt to ensure you graduate because there’s nothing more expensive than a college you don’t graduate from? Will increasing debt to increase prestige pay off after graduation?
The truth is, no one really knows. Thanks to the media we do know students regretting college debt outnumbers those thinking it was worth it by about a gajillion to one. So, it is probably something to consider. However, don’t focus on federal direct loans.
If you’re going to use debt to compare colleges, look at the percentage of students taking out private loans and the average amount. These are the ones you’re not supposed to take out until you’ve maxed out your federal loans. The more students taking out private loans, the more families should look closely to see what value the college actually provides. You can see the percentage of students taking out non-federal loans at CollegeNavigator.
Also check out the percentage of students who have PLUS loans taken out on their behalf. They aren’t counted as student loans since it is the parent actually taking out the loan. But again, this is a loan that should only be considered after maxing the Federal Direct Loans. The fact that parents are borrowing is a sign financial aid may not be as generous as you think. You can find the percentage of students with PLUS loans and average amount in the DIY College Rankings Spreadsheet. The spreadsheet lists information on test scores, acceptance rates, graduation rates, average net price, and debt for over 1,600 4-year colleges with at least 500 full-time undergraduates.