A survey by the College Board indicates that apparently most American high school students and their parents rule out colleges based on sticker price alone, even though with financial aid a lot of expensive schools might actually be quite affordable. According to an article by Eric Hoover in the Chronicle of Higher Education:
Most students and parents said they had not used online financial-aid calculators to determine how much they would need to pay at different colleges.
Above all, the survey’s results suggest that many families make college choices without accurate or sufficient information. Fifty-nine percent of students said they had looked only at the sticker prices, while only 28 percent said they had considered the net tuition price of a college after determining what they might receive in financial aid.
Of course, it’s pretty difficult for a high school student to really “determine” financial aid on his own. According to Hoover, “the survey also suggests that many might lack accurate or sufficient information about paying for college. “ No kidding.
This is because financial aid is really, really hard to figure out. This is the problem with the high discount, high price model. While colleges like to say things like “we offer 72 percent of students financial aid” (that makes schools sound generous), they do not want to say something like “the average student pays only $9,000 a year.” That makes the school sound cheap. And nobody wants to be cheap.
If schools are known to offer particularly generous financial aid, or if their sticker prices are too low, the can adversely affect the school’s reputation. As Stanford University education professor David Labaree explains:
You have to keep the people who actually pay tuition, the rich students and the big donors, etc. happy. It can’t seem like a scholarship school or people won’t donate money. The school won’t seem very attractive.
Next year, all American colleges are required to provide interested families with net-tuition calculators, so that they can find out what they might really have to pay the school.