Reading the New York Times’ “Tough Times Strain Colleges Rich and Poor”, one gets a clear picture of some of the challenges facing colleges today. Endowments are shrinking; even Harvard’s – long viewed as one of the healthiest college endowments out there – has lost a staggering amount, with one of their funds falling 60% in the last quarter. Enrollments are all over the place – down in you’re a private, up if you’re a public. Many private schools that have maintained commitments to need-blind admissions are being urged to reconsider these policies.

“What does this mean for me?” you might say, as a parent of a college-bound student, or as a prospective college student yourself.

In times like this, many students decide to attend public schools over private schools due to the apparent price difference. But a little-known fact is this: at the end of the day, private colleges are still affordable – maybe even more affordable than publics.

My Background in College Affordability

I’m a graduate of a private college – Vassar College, one of the Seven Sisters. At the time I applied (1999), the “sticker price” of tuition, room, and board was $28,000 a year. At the same time, my mother brought in around $14,000 a year from her tax business – that, combined with child support from my father, was all the money I had to put towards college (hey, it was Plattsburgh, NY in 1999 – you could live cheaply).

You would think, looking at the sticker price, that there was no way I could afford to attend Vassar. And yet here I am, 10 years later, not only a Vassar graduate – but paying off a grand total of only $12,000 worth of federal student aid.

The secret: there’s a huge gap – that most people don’t recognize – between the sticker price of a school and what one actually pays. Furthermore, in the case of private schools, many are committed to reducing economic inequalities and providing amazing education to people who wouldn’t otherwise afford it. It isn’t even via loans, but by grant aid – money which will never need to be paid back.

To give you an idea, I received over $10,000 worth of grant aid in my first year at Vassar. The rest was paid by New York’s Tuition Assistance Program, Perkins and Stafford loans, a New York state merit scholarship, my work study dollars, and, of course, my long-suffering parents.

Vassar President Talks About College Affordability

And this is why I love Catharine Bond Hill, the current president of Vassar. She wasn’t my president – mine was Fran Ferguson for my entire tenure at Vassar – but everything Bond Hill has done in her time at the College has impressed me.

Her first order of business? She returned Vassar to need-blind admissions status. This surprised a lot of people – not necessarily because it was innovative, but because most people never knew that the need-blind policy had been quietly repealed.

Now that challenging economic times are upon us, Bond Hill has strengthened her commitment to college affordability. This year, she committed $1 million more to financial aid at Vassar – currently Vassar provides $35 million in aid annually, which is 25% of its total operating budget.

Bond Hill’s also been in the news, using her expertise as a higher education economist to inform people about their college options. She was quoted in the NY Times article I linked above; and she’s appeared on NPR to talk about how colleges are responding to the conomic decline.

She even wrote a piece for Business Week: “Look Beyond College ‘Sticker Prices’”

What Bond Hill urges parents and college-bound students to realize is that one’s final costs may look very different than the sticker price. Most private colleges base their financial aid packages on a simple model:

Need = total cost of the school – parent/student contribution.

With the “need” figure calculated, the college will then try to match that need with financial aid. Many need-blind schools are committed to filling 100% of financial need, as Vassar did for me.

This quote from the Business Week article illustrates the concept nicely (emphasis mine):

With Harvard’s new pricing structure, a family making $100,000 will pay about $10,000 for total charges (tuition, room and board, and fees). This compares to the average charges at public four-year colleges and universities in 2008-09 of $14,333, as reported in the College Board’s newly released Trends in College Pricing, 2008 (BusinessWeek.com, 10/29/08). Not every student can or wants to go to Harvard, of course, but prices at the other privates can be competitive as well.

At a set of selective private colleges and universities that I’ve researched, the actual price paid by U.S. families with incomes at the national median, $62,355 in 2007, was about a third of the full sticker price, very close to the average of total cost at the four-year publics. Many privates also offer merit aid, further reducing the net price for deserving candidates, independent of their financial need.

This article does not even mention that Harvard currently offers a full ride to anyone whose annual household income is $68,000 or below. It also does not mention that even schools that are not 100% need-blind are often need sensitive, and this fulfills much of the same purpose. An article in Vassar’s Miscellany News shows that even schools that call themselves “need sensitive” – such as Hamilton College – end up awarding about the same amount of financial aid as need-blind schools.

Of course, Bond Hill’s got business in mind – she of course wants to encourage higher enrollment at Vassar. Preferably among the subset of people who read Business Week and can afford to pay full price!

But still: someone is telling Americans that sticker prices don’t mean much. This is information that so many people I know never got. I know many, many smart people who “settled” for a public school education for financial reasons, who ended up paying MORE in loans at the end of their four years than I did.

But What If I Can’t Get Into An Ivy League School?

I can hear you now: “But I’m not Harvard material! I’m just a hardworking B student!”

It may seem like all the schools that offer need-blind or need-sensitive admissions are highly prestigious, selective institutions. While there is a correlation between selectivity and need-blind admissions, I would argue it’s not a causative relationship. The schools that are most likely to offer need-blind admissions are those with the money to give out: i.e., those with large endowments – like Harvard or Vassar. Many of these also happen to be very competitive schools.

But consider some of the less competitive schools on Wikipedia’s list of need-blind or need-sensitive institutions:

  • Beloit College – 50% of freshmen have ACT scores between 25 and 29; admits 60% of students who apply
  • Smith College (all women) – 50% of freshmen have ACT scores between 26 and 32; admits 52% of students who apply
  • University of Richmond – 50% of freshmen have ACT scores between 27 and 31; admits 40% of students who apply

Compare this to a school like Harvard, where only 9% of those who apply are admitted, and where half of incoming freshmen have ACT scores between 31 and 35.

Statistics are courtesy of the National Center for Education Statistics’ College Navigator.

In short: you don’t have to be a genius to get into a need-blind school, but you do need a strong, consistent academic record.

My Advice to Prospective College Students and Their Parents
  • Be open-minded about college costs.
  • Be honest about what you want in a college, even if you don’t think you can afford it.
  • If possible, try to stay within your state. Many states and individual colleges offer financial incentives for students to stay in-state.
  • Don’t rule out any colleges until you have a financial aid package in hand. (This comes with your acceptance letter).
  • If you feel really ambitious, you could even try to negotiate your financial aid package with a financial aid counselor – colleges are businesses, too, and nobody says dickering isn’t allowed.

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