THERE’S NO SINGLE, right way to legally crack the college admissions and financial aid systems. It’s up to teenagers and their parents to do the necessary work.
Still, it helps to have a tour guide—which is what you get with The Price You Pay for College, the new book from New York Times financial journalist Ron Lieber. Lieber’s book discusses why college costs so much, digs into the allure of elite schools, uncovers hacks that may not really be hacks, and talks about how to plan and pay for college. Here are three key ideas that I took away from the book:
1. Families need to talk. Teenagers and their parents should discuss money, core values and priorities. That’ll help students identify what they want from their college experience.
Sprinkled throughout Lieber’s book are thought-provoking questions. For example, what’s your definition of success? What is college for? Is it about learning? Building connections? A means to a job? If a college education is a means to a job, at what price? What can the family afford? Where will the necessary money come from?
If the value of a college education to your family is a job, you might wonder just how important an elite school is for obtaining a more coveted position. Lieber’s research suggests it’s not as critical as you may imagine, with alumni from top schools obtaining between 13% and 58% of prestigious jobs, depending on the occupation. What’s apparent is the benefit of the doubt accorded to applicants who have the most selective schools on their resume. Certain gatekeepers have a vested interest in continually building and promoting their own networks, which can often start with their alma mater.
Lieber doesn’t pretend to have a formula that calculates the actual value of any given college experience. Instead, he encourages us to reflect on how our feelings influence such an important and expensive decision. In his decades of reporting, Lieber “has never come across a consumer decision that inspires more confusion and emotion than this one.”
2. The devil is in the details. Once you outline what you’re looking for from the college experience, start digging for data. Lieber’s book offers resources to help uncover the data that does exist. One problem: The numbers aren’t standardized across schools and aren’t always easy to come by or interpret.
For example, mental health is becoming more top of mind for many families, with nearly a quarter of new undergraduates now classified as disabled, largely due to a mental health diagnosis such as depression or anxiety. Campus resources may be very important to these families, so it’s worth determining how long it takes to schedule an appointment for counseling, who the providers are and what type of support organizations are available.
The clearer you are on what success means for your child and family, and what value a college offers, the more you can cut through the clutter and eliminate details that aren’t a priority. In a decision that’s anything but easy, the more noise you can eliminate, the better.
3. The game has changed. It’s probably not that surprising—and yet still alarming—to learn that consultants play a big role behind the scenes. They help colleges to find students, to determine what to charge them and to prod families to follow through. Discounts to attract students are often offered in the form of merit aid.
It’s tough to understand the financial aid system, let alone predict how much merit aid you’ll receive—assuming, of course, you get in. Merit aid doesn’t consider your financial situation, like need-based financial aid does, so it’s entirely possible for wealthier families to be offered discounts, provided the student has what the college is looking for. Colleges use algorithms to predict what kind of discount is needed to get a particular student to say “yes.” This is all guided by consultants, who “help schools leverage information about your family to optimize your discount,” Lieber writes.
He gives us valuable hints about how to uncover more about merit aid than the basic information listed on a school’s website, and it starts with a school’s Common Data Set. The easiest way to find this information is by Googling “common data set” and a college’s name. Among other items, look for the number of people who received merit aid, despite no financial need, and the range of test scores for admitted students. If your student’s scores rank high for a particular college, there’s a greater chance of merit aid. Schools claim their award-giving process is based on more than test scores and other data, and it likely is. Still, checking the numbers gives families a shot at determining how a college’s algorithm is likely to rank their prospective student.
Anika Hedstrom, MBA, CFP, is the co-founder of Uplevel Wealth, a boutique wealth management firm serving women and professional families. She writes on motivational and behavioral aspects of financial planning, and has been featured in The Wall Street Journal, MarketWatch, Business Insider, USA Today and NerdWallet. An Oregon native, she loves the outdoors, good pinot and chasing after her young twins as they head in opposite directions. Follow her on Twitter @AnikaHedstrom and check out her earlier articles.
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Anika – great article as the college decision is one of the bigger challenges for parents and their child to manage as it comes with 5,000 choices. This challenge increases manifold if the child is a potential college athlete.
Thanks John. I wish I had this book many years ago as I was navigating the college process. Glad parents and kids alike have this fantastic guide now.
I found Leiber’s book to be helpful and humane. Especially during the pandemic when the high schools were closed and most seniors and their families were stuck doing this search on their own with little institutional support. Unsurprising that most of my daughters’ friends are going to our local community and nearby state universities.
The Common Data Set (CDS) is a great equalizer. However, there’s a lot of legwork in trying to narrow down to a short list of schools.
I would also recommend parents and high schoolers look at the College Board’s Big Future website, as one tool. It’s very student-friendly, and its basic search allows for a sort by graduation rate.
There’s no story less covered than the creeping length of time it takes to earn a 4-year degree. As a graduate school program director, I saw many applicants with ten years of college transcripts.
The years between 18-30 can be some of your best, and I wish for every young adult the least amount of waylays and backtracking possible from late childhood to adult life. Some is inevitable but parents (and students who will be paying/borrowing their own way) should understand that the graduation rates reported (unless specifically noted otherwise) are 6-year rates, for a 4-year degree.
I’ll know in 4-5 years whether or not my focus on this metric means that my kids are graduates while their friends are still in school…. And maybe taking longer is fine, but not when I am paying the bill. At least that’s how I feel today.
Thanks Catherine. It was a great read during the pandemic, and brought up some great points that are all worthy of consideration. Yes, an extra few years can really add up! Thanks for your insight.