Regional interstate compacts as a way to cut college costs.

Don’t overlook higher education regional interstate compacts as a way to cut college costs.

Regional interstate compacts are reciprocity arrangements whereby state universities and colleges offer tuition discounts to out-of-state students, allowing them to “pay the same price as a resident or capture a significant discount“.  Here are four regional compacts along with the participating states.

Western Undergraduate Exchange – Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming

Academic Common Market – Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia

Midwestern Higher Education Compact – Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, and Wisconsin

New England Board of Higher Education –  Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont

Not all schools in each state participate, and most schools limit the number of students accepted.  Various restrictions are imposed.  In many cases, only programs not available in the student’s home state are included in the agreements.

Example of savings from an MHEC public college or university:

In-state tuition	$4,000
Out-of-state tuition	$8,000
MSEP Tuition (150% of In-state tuition)	$6,000
Your Savings	$2,000

These interstate compacts are worth exploring by students interested in attending college outside their resident states.

Will runaway college costs be reined in by year 2020?

Vance H. Fried has written College 2020, a paper that outlines how runaway college costs can be reined in by combining online and residential learning.

College in America will look very different in just a few years, thanks to remarkable innovations taking place in technology and business models in higher education. The advance of Online 2.0 will trigger structural changes in what we mean by a “college education.” Students in the future will be more likely to pursue their studies in an “unbundled” system in which different institutions provide different parts of a student’s higher education experience. Students will be more likely to learn through a blend of online coursework and a residential experience and will likely assemble a guided and rounded transcript of courses and experiences that are independently credentialed, allowing future employers to have a better measure of their skills.

Online 2.0 will evolve from the existing online environment.

The real technological change … is the use of data mining to create an adaptive learning platform. As a student uses the rich media content, various programs run behind it. These programs include “automated monitoring (the injection of small questions to assure learners are progressing with the content), assessment (quizzes that assure a minimum level of retention and understanding), and remediation (the additional content assigned to learners to make up for any shortcomings in that understanding and retention).”[7]

A hallmark of Online 2.0 is the enhanced ability for self-pacing, which “substantially benefits students of all types by providing total scheduling flexibility”.  The role of academic advising will become more important as students will need help in structuring their college experience.  Fried contends that this will actually serve to improve upon the current system, a notion that initially might seem counterintuitive, but actually makes sense considering the strong criticism of  the limited learning going on in college today.

Curriculum goes from being a somewhat random combination of discrete disciplinary courses to a coordinated set of competencies.

Students will spend only one or two years on campus.

While some colleges will preserve the four-year residential “college experience”, most will shorten the time a student spends on campus  This is key to saving costs while maintaining some elements of the traditional experience that students value:

• A rite of passage performed with a group of peers,
• A time for personal exploration,
• A laboratory to develop leadership and personal relationship skills,
• A supervised coming of age, and
• Fun.

One model for this is the “flipped curriculum”.

… While most courses in the college of the future will be self-paced, some will be fully synchronous. Students will do self-paced online work focused on acquiring several different competencies and then take a synchronous class (or mini-class) aimed at integrating and applying multiple concepts through discussion or projects.

In addition to their direct impact on learning, a limited number of campus-based classes foster learning communities among students….

Unbundling will grow – universities will give credit for courses from many other  institutions.

While not all colleges will replace their courses with “competencies,” there will be more emphasis on taking courses from a variety of universities, says Fried. With courses available at low cost from many institutions, “the college experience can be unbundled from instruction.“ …

A university will become more like a travel agent than like a packaged tour.

“Unbundled college is analogous to putting together your own vacation to Europe or asking a travel agent to do it for you rather than buying an all-inclusive, prepackaged tour,” writes Fried. There is no reason why students can’t combine evidence of their competence into portfolios that will interest employers and no reason why entrepreneurs won’t become the packagers of those portfolios, possibly without any degrees at all.

Many of these changes seem realistic, but the actual cost savings are hard to predict accurately.
They could turn out to be marginal — maybe under 10%.  Online classes are not always that much cheaper than campus classes, and paying for more academic advising would add costs.  The scaled-down residential experience does seem like a reasonable compromise for middle-class families.

Related:

• Seven Years ’til the Revolution? (The Pope Center)
• Leading reasons for high college costs are research and public service (Cost of College)

Preferential packaging – college financial aid as a recruiting tool

Preferential packaging of financial aid is commonly used by private colleges and universities.  Because schools are not transparent about this strategy, many families are ignorant of how it works.  Muhlenberg College is unusually open about explaining this practice.

Preferential packaging means, simply, that the students a college would most like to enroll will receive the most advantageous financial aid packages.

There are three basic types of financial aid (FA):  grants, loans, and work.

A preferential financial aid package includes a far greater percentage of grant aid than self-help (loans and work). Because they have discretion over how much grant aid they choose to award a student, a college can award a bigger grant to a student they would really like to enroll….

Willamette University also is exceptionally forthright about its preferential packaging.

For students with demonstrated financial need, the percentage of need that is met with “gift-aid” (scholarships and grants from all sources) will also reflect the students’ academic standing within our admitted applicant pool. In other words, the stronger the student, the greater the scholarship award is likely to be.

Let’s look at an example from a CollegeConfidential post.

In this case the college’s Cost of Attendance (COA) is $40,000, and two applicants have the same financial need but quite different academic credentials.

Student A ACT 33 GPA 4.0 EFC = $7k

Student B ACT 24 GPA 3.2 EFC = $7k

Student A is more attractive to the college because his stats would improve the school’s stats.  Perhaps Student A is also an Underrepresented Minority (URM), another desirable factor.  Both students will be offered $10,000 in FA, but Student A will receive a preferential package that does not include a loan.

Financial Aid Offered
Student A:  $8,000 grant; $2,000 work-study – Total = $10,000
Student B:  $3,000 grant; $5,000 loan; $2,000 work-study - Total = $10,000

Note that these awards are technically “need-based”, but in fact do take merit into consideration.  If it is the official policy of this college only to offer FA based on need and not on merit, another student with the highest of academic credentials but lacking any financial need (EFC = COA) would receive nothing.

What it means to applicants

• Students seeking to maximize financial aid should apply to schools where their statistics place them in the upper third of the applicant pool.
• Students with no financial need are shut out of many merit awards that include a need component.

Related:

• Psst – one of Duke’s so-called merit scholarships is actually need-based (Cost of College)
• Family income matters for ‘merit’ awards at the University of Rochester (Cost of College)

MOOCs may cut the price of a SUNY degree by one-third

The State University of New York’s new agreement to offer massive open online courses (MOOCs) opens the possibility of obtaining a SUNY degree at about one-third discount off full price.

SUNY announced Thursday that it signed an agreement to partner with Coursera, a website with 3.7 million users that is a leader in offering what are called “massive open online courses.” Universities worldwide, including private schools in New York like the University of Rochester, upload video lectures and course materials onto the website in an effort to enhance educational access.

Starting with a course from Stony Brook University in the fall, SUNY is planning to offer some courses through the site, although how many is unclear.

Exact details are still to be worked out, but students could be granted prior learning assessment credits for MOOC courses taken through a SUNY campus or even elsewhere.  These “would essentially act as transfer credits” that would require a fee, but not a tuition charge for each course.  Presumably the credit transfer fees would be minimal, well below tuition costs.

A student might be able to get his SUNY degree at about two-thirds the cost of a traditional program.

SUNY allows only one-third of the coursework for a degree to be transferred.

“There would be a limit,” SUNY spokesman David Doyle said. “It’s not like you could get a free degree.”

This strikes me as not very different from the Advanced Placement program, which allows college students credit for up to one year ‘s worth of college courses.

Related:

• ‘SUNY to boost online offerings, push early graduation’ (Cost of College)
• Kiplinger’s best values in public colleges (Cost of College)

Getting answers to essential questions about a college’s financial aid policies

College financial aid policies can vary significantly, so be sure to check with each school.

The CollegeBoard suggests an interested student or parent “schedule a phone meeting or an interview with a member of the financial aid staff“ to get answers to any questions that are not answered by information on the college website.

A list of 12 questions to get you started on gathering information is provided.  In my experience, the answers to most of these questions can usually be found on college websites, so be sure to check there before you make a call.

A dozen questions to get you started:

1. What’s the average total cost — including tuition and fees, books and supplies, room and board, travel, and other personal expenses — for the first year
2. How much have your costs increased over the last three years?
3. Does financial need have an effect on admission decisions?
4. What is the priority deadline to apply for financial aid and when am I notified about financial aid award decisions?
5. How is financial aid affected if I apply under an early decision or early action program?
6. Does the college offer need-based and merit-based financial aid?
7. Are there scholarships available that aren’t based on financial need and do I need to complete a separate application for them?
8. If the financial aid package the college offers isn’t enough, are there any conditions under which it can be reconsidered, such as changes in my family’s financial situation or my enrollment status (or that of a family member)?
9. How does the aid package change from year to year?
10. What are the terms of the programs included in the aid package?
11. What are the academic requirements or other conditions for the renewal of financial aid, including scholarships?
12. When can I expect to receive bills from the college and is there an option to spread the yearly payment over equal monthly installments?

If you want to be super organized, you can create a spreadsheet with all relevant data.

Tuition discounting grows to all-time high at private colleges

Tuition discounts continue to climb at private colleges.

The average “tuition discount rate”—the reduction off list price afforded by grants and scholarships given by these schools—hit an all-time high of 45% last fall for incoming freshmen, according to a survey being released Monday by the National Association of College and University Business Officers.

Rising discounts along with the smallest sticker price increases in years have combined to make college more affordable for many families.

“It’s a buyer’s market” for most colleges ”as more families focus on cost and value”.

Some facts and figures:

• 65% of private colleges increased their discount rate in the fall of 2012.
• About one in eight U.S. undergraduates is enrolled at a private nonprofit college, which provided 70% of all grant aid to undergraduates in 2009.
• “The average discount rate at private colleges has climbed for seven years in a row.”
• The median sticker price at about 280 private schools rose 3.9% last year, the smallest increase in about 12 years.
• At four-year public colleges and universities, in-state tuition and fees rose 4.8% last year, also the smallest increase in about 12 years.
• “The discount rate for public universities fell modestly in 2012 … after rising from 2007 to 2011.”
• Last fall, enrollment fell at about half of 400 private colleges surveyed as the number of high school graduates dropped.

Both need- and merit-based aid appear to be part of this trend of growing discounts.

The economic downturn boosted the number of families who qualify for aid. In addition, even those earning too much to demonstrate need under aid formulas “expect to see some sort of merit aid,” unless the school is highly selective, said Trey Chappell, a college adviser in Scottsdale, Ariz.

Is it a “fundamental shift”, or simply the result of a weak economy?

The question of whether the revenue problems facing colleges and universities are a result of a fundamental shift in the country’s attitude toward paying for college – the so called “college bubble” – or whether it’s simply the result of several years of weak economic growth will only be answered if families begin to experience the kind of economic growth they were accustomed to prior to the recession.

Related:  Tuition Discounting: Not Just a Private College Practice (CollegeBoard)

Are these college presidents clueless?

Only 65% of College Presidents Say It’s ‘Very Important’ That Grads Get Good Jobs
And just wait until you see what they say about tuition.

That percentage comes from a Gallup poll released this month.  The poll also showed that only 58% of college presidents  believe the percentage of students who graduate is “very important”, prompting Jordan Weissmann to ask:

If those aren’t tops on your priority list right now, what the hell is?

Apparently the cost of college is also not a priority, given that only 39% responded that the price of a degree is “very important”

Weissmann considers that perhaps he is being hypercritical.

… Perhaps the 37 percent who think graduation rates are only “somewhat” important when determining whether a college is any good are trying to take the sort of painfully nuanced view their fellow denizens of academia would expect.

I don’t know about their “nuanced” views, but I’m with Weissmann in believing that jobs, graduation rates, and cost of attending should be at the top of the list of what college presidents consider very important.

Related:  Families paying for college tuition have been hardest hit by inflation (Cost of College)

In their college search, students need to look beyond ‘average net price’

Even with its flaws, the Net Price Calculator (NPC) offers low-income students a better indication of college affordability than the College Scorecard does.  However, sometimes finding a college’s NPC is not easy.

Limited value in using a college’s average net price

Because it uses average net prices as a measure of affordability, the recently introduced College Scorecard may discourage low-income students from applying to high-priced schools.  Low-income students do not pay “average” prices.  For that matter, high-income students don’t either.

There’s just one problem: no student is average.

Consider a low-income applicant to the University of Pennsylvania, a school with a high sticker price. At Penn, a full-price student pays $59,600 (including tuition, room & board, and other fees) and a low-income student with a full scholarship pays $0. The average net price across these two students is $29,800. (As it happens, Penn’s reported average net price is $20,592.) Just like high sticker prices, high average net price can mislead students from modest circumstances looking for affordable college options. Many colleges – particularly prestigious schools with high sticker prices – are committed to building socioeconomically diverse student bodies. At such schools, students’ individualized net prices can vary significantly depending on their financial circumstances.

NPC figures offer a better measure of affordability.

… Like the College Scorecard, NPCs offer key financial information to students and families prior to application and matriculation. The College Board’s 2012 study revealed that more than half of college-bound seniors from lower-income and middle-income families still rule out colleges on the basis of sticker price, but with the advent of NPCs, students from all backgrounds can identify affordable college options before they decide where to apply.

… Instead of discussing financial aid after students have received acceptance letters in senior spring, counselors can help students build application lists in junior spring that take financial aid into account. With the Scorecard’s average net prices, high schools students are left with yet another one-size-fits-all ranking of affordability; in short, it is not much better than the starting “sticker price.”

For low-income students like Cristina, the College Scorecard misses the mark – sometimes by a big margin. As with sticker prices, these average net prices can indicate to low-income students that they will find neither financial support nor a warm welcome at selective schools.

But NRC calculators are often not user friendly.

A report issued by The Institute for College Access and Success (TICAS) in October 2012 asserted that “net-price calculators are still not reliably easy for prospective college students and their families to find, use, and compare,” noting (among other issues) that many schools post NPCs on obscure web pages.

Although NPC links are included in both the College Scorecard and the Department of Education’s College Navigator, it turns out that many do not connect to the right location.

A solution:  College Abacus will soon have a consolidated set of links to all NPCs for U.S. colleges and universities.

At College Abacus, we are closing the gap between legislation – and its goals – and the actual needs of students, parents, and counselors around the United States. We are taking on the task of aggregating the net price calculators into a single, student-friendly tool. With the help of a grant provided by the Gates Foundation’s College Knowledge Challenge, we expect College Abacus to expand from its current group of 4,000+ schools to include all US colleges and universities by September 2013.

Related:  ‘Tips for Using Net Price Calculators’ (Cost of College)

Kiplinger’s best values in public colleges

Kiplinger’s recently released its list of best values in public colleges.  Here are the top ten for in-state (IS) and for out-of-state(OOS) students.

California students seeking a bargain are still paying relatively hefty costs approaching $30,000 per year, assuming they can get in to the more selective state schools.

New York stands out in offering a good value for OOS students.  Geneseo seems to attracs very few OOS students, perhaps due to its isolated rural setting.  On the other hand, Binghamton’s higher percentage of OOS students has been the target of complaints that state residents are being crowded out.  Unlike California and Virginia, New York has no formal rules on limiting OOS students.

Percentage OOS Students – School
 02% – SUNY Geneseo
18% – Univ. North Carolina Chapel Hill
12% – Binghamton University (SUNY)
27% – University of Virginia
06% – College of New Jersey
32% – College of William and Mary
07% – Univ. of California, Los Angeles
11% – Univ. of California, Berkeley
08% – Stony Brook University (SUNY)
23% – Univ. of Maryland, College Park

Kiplinger’s uses measures of “academic quality and affordability” to compile these lists.  The entire list of 100 colleges can be found here.

More colleges are becoming ‘need aware’

Do your chances of college admission decrease if you need financial aid?  The answer is a qualified “maybe”.  According to Paul Sullivan writing in the New York Times, more private colleges are becoming “need aware”.

Still, the vote by the board of trustees at Grinnell, a liberal arts college in Iowa, reflects a broader trend in financial aid. The college counselors I spoke to this week said the majority of colleges had already downgraded their policies to “need aware” — meaning that the colleges accept most of their students without looking at their need for aid but will consider financial need for some percentage of the applicants. Others are already considering a parent’s ability to pay in many of their admissions decisions.

This issue matters the most for marginal students, who should understand that their ability to pay could factor into how attractive they are to a school.

As colleges continue to deal with losses in their endowments from 2008, they have less money to offer as financial aid….

So while more colleges are considering the financial need of their applicants, highly qualified students, no matter their finances, will still be admitted. And wealthier families, an education consultant told Paul, should realize that their children are competing against students of similar wealth.

Applicants can signal their ability to pay full tuition to a college, which may give them an edge in gaining admission.

… Admissions officials can usually figure out fairly quickly who needs aid and who doesn’t.

“It will be obvious because they didn’t file a financial aid form,” Belinda Stern, an education consultant on Mercer Island, Wash., said. “Some people are a little more brazen and want to make it clear to the college that they are willing to pay the full ride and come right out and say it.”

All this is irrelevant for most applicants since they have no choice because they simply need the financial aid, as this comment explains.

… Who ignores financial aid? Only the very wealthy. Only if you have saved over $200K per child. Only if your income is consistently over $250,000 or so.

The rest of us don’t have the option of “ignoring” financial aid. We fill out the FAFSA and the profile in the hopes that the financial aid gods will smile on us and offer our children some money for their education. We don’t wonder if the “full-pay” kids have a better chance of admission–we know they do!

My 3 children chose their colleges based on who offered them the best aid package, period. And they are doing fine.

Related:  Will checking ‘no financial aid needed’ help your admissions chances? (Cost of College)