US Department of Education Publishes College Cost and Net Price Rankings
July 01, 2011
The net price figures can also be manipulated. Colleges that give less grant aid but concentrate it among fewer students will appear more generous than colleges that award more grant aid but spread it among more students. Since the net price data is limited to costs and grants for first-time full-time college freshmen, colleges that front-load their grants will appear less expensive than colleges that do not. Front-loading of grants involves awarding more grant money to freshmen and less grant money to upperclassmen. The limitation to first-time students also makes the data less useful to transfer students, who may be eligible for less financial aid.
The rankings for public colleges are based on only the in-state tuition and net price figures. The rankings do not report costs for out-of-state students. A public college might be affordable for in-state students, but have a much higher cost for out-of-state students. This aspect of the ranking methodology gives colleges an incentive to keep in-state public college tuition inflation low, while continuing to increase tuition for out-of-state students and continuing to shift the enrollment from in-state students to out-of-state students.
Potential for Better Cost Measures
The US Department of Education could provide better tools for informing families about college costs by addressing the flaws in the net price rankings, by publishing institutional loan repayment rates for all colleges and by publishing data concerning the average cumulative debt at graduation.
The final regulations concerning “gainful employment” introduce three new affordable debt measures for colleges: loan repayment rates, debt-service-to-income ratios and debt-service-to-discretionary-income ratios. The US Department of Education could choose to publish these debt measures for all colleges, not just for-profit colleges, to provide families with information about the extent to which each college’s graduates are struggling to repay their loans. The loan repayment rates would be particularly helpful for ranking colleges.
Even better would be data concerning cumulative debt at graduation. The US Department of Education currently publishes quarterly reports concerning new federal education loan volume, but this data does not provide data on cumulative debt for just the students who are graduating. It also does not provide data concerning private student loans, nor does it distinguish between undergraduate and graduate debt.
The Common Data Set does provide information concerning cumulative debt at graduation, but it suffers from other flaws. The Common Data Set is voluntary, with less than two-thirds of colleges submitting data. Even among the colleges that complete the surveys, many colleges do not report debt figures, especially the colleges whose students graduate with the greatest debt burdens. The Common Data Set also does not provide combined student/parent debt figures.
Need money to pay for college?
Every semester, Fastweb helps thousands of students pay for school by matching them to scholarships, grants and awards for which they actually qualify. Sign up today to get started. You'll find scholarships like the $2,000 "No Essay" Scholarship from Niche, a scholarship open to all U.S. students and those planning on enrolling within 12 months.