Six reasons why $90,000 college costs are bad news even if few pay that amount
The cost of attendance at private universities in New England is hovering around $90,000 per year for the 2024-2025 school year, including at Wellesley College, Boston University, and Tufts University, adding to abundant evidence that college costs have spiraled out of control. But colleges are quick to reassure prospective students and their families that few pay the full amount.
“Wellesley College is more affordable than you might think,” Wellesley writes on its website.
“All you have to do is apply for financial aid,” Boston University encourages.
“As part of our commitment to making education affordable for exceptional students from all backgrounds, Tufts meets 100% of demonstrated need for all admitted undergraduates,” Tufts asserts.
Students and their families should not be coaxed into complacency, even in the presence of statistics like “100%.” Exorbitant college price tags paired with vague promises of discounts are marketing strategies — and not ones that reliably benefit students.
How do I know? My education launched with Head Start — the federally funded early education program for low-income families. Later, in the ’80s and ’90s, I paid for college with savings, scholarships, loans, and by giving campus tours, babysitting, and milking cows on a nearby farm. Following undergrad, I worked as a college admission counselor at two small liberal arts colleges where I was afforded behind-the-scenes views of how colleges assemble incoming classes. Later, in both my math doctoral program at an Ivy League institution and my tenured professorship at a regional university, my students confided their oftenheartbreaking education finance journeys. I’ve also worked as a higher education journalist, reporting on universities’ sometimes questionable business practices. Now I’m a billpaying parent of two college students. So I understand how the college financial sausage is made.
Here are six reasons why students, their families, policy makers, and the public should not view financial aid as an antidote to exorbitant college costs. These points also double as reasons for why universities should hold the line of — or even reduce — the cost of earning a degree.
Loans are not discounts.
Universities and the media often suggest that many students don’t pay college sticker prices. Financial aid, they argue, discounts the cost of attendance. Such aid often has three components: grants, work study, and loans. Grants are analogous to a discount on the tuition, as students do not pay them back. Work study jobs offer students a means for paying part of the costs while studying. Loans must be paid back.
Just as a mortgage is not a discount on the price of a home, a student loan is not a discount on the cost of college attendance. Student loans postpone — not reduce — payment toward college sticker prices. Depending on the loan’s terms, students typically pay back more than the full loan amount.
Taxpayers fund loans that help students pay college sticker prices — and they’re not always paid back.
US taxpayers give money from their earnings to the federal government. The government then loans some of that money to students who experience a shortfall between what they’re able to pay and the cost of attendance. Universities receive that taxpayer money regardless of student outcomes. However, approximately 2 out of 3 students (62 percent) who leave college before earning a degree default on their loans.
The federal government has a track record of canceling student debt — a practice that has both advocates and detractors. For example, an Obama-era rule forgave $150 million in student debt for those whose colleges defrauded them. Former president Donald Trump opposed canceling student debt. Last week, the Biden administration announced additional student loan cancellation, which, if successful, would bring the administration’s total to $153 billion. If college sticker prices were lower, losses related to taxpayer-funded student loans would be lower too. Both advocates and detractors of student debt cancellation could get behind that.
Students take on increased risk to pay colleges’ sticker prices.
Colleges do not always meet the full financial need of accepted students, even when they claim to do so. That’s because most students see a discrepancy between what colleges expect them to pay and what’s in their bank accounts. Some in this position elect to not attend colleges that offer insufficient funding. Yet others seek out private loans from banks, credit unions, or other financial institutions to make up the shortfall.
Private loans generally offer less favorable terms and conditions than federal student loans. Federal student loans often have favorable terms, including relatively low, fixed interest rates and loan fees, deferred payments while enrolled at least halftime in college, and flexible repayment or forgiveness options. When students take out private loans to pay college sticker prices, they often incur higher costs and have fewer protections.
Many students assume loans to pay college sticker prices — and never graduate.
Among students pursuing bachelor’s degrees, most (9 out of 10) expect to finish within four years. No one can fault students’ optimism when colleges come courting, especially given all of the hand waving about the easy availability of loans.
But fewer than half of entering students graduate within four years. (In academe, that’s a failing grade.) When graduation rates are measured over six years, 2 out of 3 (62 percent) graduate — a score that would earn a D in college. High sticker prices coax students to assume increased risk, even though many never earn a degree.
High college sticker prices normalize the notion that college is for the wealthy.
Many students who balk at college costs forgo applying, regardless of reassurances about financial aid. That includes students from low-income families who cannot afford 95 percent of colleges, according to the National Association of Student Financial Aid Administrators. High sticker prices deter low-income students from applying to many colleges, reducing overall opportunities for this demographic.
Opaque sticker prices invite (more) cynicism about higher education.
nd
Colleges have reasons for advertising higher prices while offering discounts. Some students and their families equate high prices with quality. Others feel flattered when their student gets even a small scholarship. (To be clear, a scholarship is a coupon, not real money.) Also, some students pay full fare, which provides colleges with welcome infusions of cash.
Opaque pricing, however, piles on cynicism about higher education — a sector already under fire for issues related to free speech, diversity, equity, and inclusion. In the absence of pricing transparency, many guess — rightly or wrongly — about the rationale behind exorbitant prices. They point to universities’ luxurious amenities, including lazy rivers and gourmet food. They cite American universities’ skyrocketing administrative bloat. They argue that professors are indoctrinating, rather than teaching, students. They also invent nicknames, which explains why some know the University of Southern California as the University of Spoiled Children.
“What is the cost of attendance?” Boston University asks on its website. “Probably less than you think.” That may not be accurate given that American universities are not grappling in meaningful ways with the exorbitant financial burdens that college attendance places on students and society.