Why colleges hide the truth about tuition

FROM sea to shining sea, the shining faces of young people are turning expectantly toward another year in the groves of academe. Heading for college, they leave behind parents who might understandably be bewildered about the price of higher education. (Higher than what? It’s complicated and a question for another day.)

There is ample evidence that colleges mangle the truth about so many subjects (e.g., history, contemporary life, how literature should be studied, freedom of expression on campuses, etc.) that it should not surprise anyone that the counterintuitive reality about tuition is deliberately obscured — and cunningly complicated.

Fortunately, Dan Currell has entertainingly dispelled the manufactured mists that engulf “The Truth about College Costs,” which is the title of his astringent essay in the summer issue of National Affairs. Formerly a senior adviser at the Education Department, Currell has glad tidings: “Students are paying less for college than they did 15 years ago.”

This is, as Currell knows, “deeply contrary to conventional wisdom,” but the reason for it is hiding in plain sight : “In the late 1980s and early 1990s, colleges discovered that the appearance of high tuition was good for marketing.” Since then, they have toiled to keep “nearly invisible” the fact that 96 percent of students pay about $15,000 a year for tuition. Add $10,000 for room and board, and the $25,000 total is a far cry from the eye-watering numbers that colleges are actually pleased to have bandied about.

A few highly selective colleges educate a “small and highly unrepresentative” fraction of students. “The top 100 private schools enroll around 500,000 students,” while the other 2,600 four-year schools enroll about 10.5 million. Most of the elite schools could fill their annual enrollments several times over with the children of the affluent who would gladly pay the advertised tuition — even much more. Most of these elite institutions have, however, large endowments that enable generous tuition assistance for the less affluent. For the other 2,500 institutions, a sleight of hand is the basic business practice.

The Economist largely validates Currell’s thesis. It reports that the average tuition paid by students at their home-state public colleges is about $10,000, and that private colleges discount tuition by more than 50 percent on average. “The College Board, a nonprofit, shows that whereas published tuition and fees for private nonprofit colleges increased from $29,000 in 2006-07 to $38,000 in 202122 (in 2021 dollars), the net price actually decreased from $17,000 to $15,000. The story is similar for public colleges. Published tuition and fees were nearly $8,000 in 2006-07 and rose to nearly $11,000 in 2021-22, but the net cost fell by $730.”

But, the Economist says, schools have “an incentive to seem extortionate”: “Consumers tend to associate higher prices with higher quality.” (Currell: “Bowdoin’s published tuition today is $4,000 higher than Harvard’s.”) The Economist adds, “Students (and their boastful parents) are flattered by tuition markdowns pitched as merit scholarships rather than discounts.”

The discounts often are, Currell says, “institutional scholarships” with no money behind them. “By 1999,” he says, “the fundamental dishonesty of college pricing had become clear”: “That

year, American private colleges purported to award scholarships worth more than all the tuition they collected — which is to say, their average discount had exceeded 50 percent.” That explains this faux mystery: Colleges ostensibly cost $50,000 a year, “but,” Currell says drolly, “they are somehow also running out of money.” The not at all mysterious reality is, Currell says, that “the apparent rise in tuition after the mid-1990s” is “almost entirely illusory.”

“In fact,” Currell says, “if a typical college collected its sticker price in full, its leaders would hardly know what to do with all the money.” For example, Beloit College, a Wisconsin liberal arts school with a $43 million budget, would have an extra $26 million.

Colleges can minimize their discounts by instead steering parents toward having government provide the discount with subsidized student loans. Among the social costs of what Currell calls the “fundamental dishonesty” about college pricing is today’s mountain of college debt: “Many families simply believe there is a $200,000 tollbooth on the road to the American dream, so they sign the loan forms.”

Academia has appointed itself the nation’s moral tutor whose duty is to make Americans remorseful about almost everything, including deceptive practices that the tutor insists characterize unsavory capitalism. So it is fun to have Currell’s demonstration that our supposed moral betters have practices that are, to use one of their favorite words, problematic.