The excitement of college acceptances is now past for the Class of 2021 and their parents. Conversations have now moved from “Where will I go to college?” to “How are we going to pay for college?” College affordability dominates both discussions on campus and in the general public. With the price tag for four years at an elite private institution approaching a half million dollars, how can it not?
Affordability, however, is only one-half of the equation that should be driving family decision making. The value of the degree is the other half of the equation. Sandy Baum, senior fellow at the Urban Institute, states this reality bluntly—“The amount you can and should pay [for college] depends on what it is that you’re paying for and what you get for that investment.” The value of the investment should not be seen in a limited fashion. Not only should it include the lifetime earnings potential that a particular degree or major imparts, but also it should reflect the knowledge and skills that the student acquires allowing him or her to be a happy and productive member of society.
An Administrative Dilemma
Administratively, we often fall into the same trap of focusing solely on the price of a college degree. If our only goal is to hold the price down, we are led to actions that will reduce costs at the university. In reality, such actions may have the effect of reducing the quality and value of the degree.
If class sizes are increased, class offerings reduced, support services reduced, etc., we may be able to hold down tuition but the value of the degree may fall. In some cases, the result could actually be a tuition increase if the actions increase the number of years required for a student to graduate.
Private universities frequently market against large state universities emphasizing that student at the privates are able to graduate in four years whereas those at the publics cannot. For some universities, raising tuition and fees to fund investments that increase the value of their degrees and to expedite graduation may be a more effective strategy than cost cutting.
A similarly counter-intuitive argument can be made on the student side. Settersten and Ray argued several years ago in their book Not Quite Adults that students are not borrowing too much money for college but rather too little. They reason that students spread college out over six or more years working large numbers of hours to help pay tuition bills. A more effective strategy would be to borrow enough to graduate in four years or earlier thereby entering the job market sooner where a premium is paid for the college degree.