The REAL Numbers Behind The Trillion Dollar Figure

For the past couple of years, I have been presenting at multiple conferences and to groups of parents about college ROI and, in doing so, have often referenced the "ONE TRILLION" figure that has been popularly pointed to in the media as an indicator of a perceived higher education 'bubble'.  If you have read this blog, than likely you know that the trillion dollar figure refers to national aggregate student higher education debt.  My argument has been that people are misreading the figure and not putting it into context, keeping in mind that it is the result of more students going to college and includes graduate school debt (including people like the beautiful and talented Dr. Wife's medical school debt) and not an increase in the cost of higher education to individual students.  It appears from this article that some folks finally caught on:

http://www.newamerica.net/publications/policy/the_graduate_student_debt_review

More and more are climbing on the bandwagon to debunk the current media obsession with suggesting college might not be worth the investment, including Google CEO Eric Schmidt:

http://techcrunch.com/2014/03/16/googles-eric-schmidt-on-critics-who-say-college-isnt-worth-it-theyre-just-wrong/

Is this the beginning of the end of this decade's attack on higher education?  We can only hope.

What REAL GENIUS Can Teach About College Funding

One of my favorite (of many) ‘80s movies is Real Genius, a hilarious Val Kilmer vehicle that chronicles the lives of a group of geniuses at genius filled Cal Tech.  I was reminded of the movie the other day as I was speaking with students and families about college financing.  In particular, this scene jumped into my head (my apologies that I was only able to locate an audio clip!):

 In this scene, Lazlo Hollyfeld usurps the system by submitting a massive amount of entries to a contest, an amount that he estimates will net him 32.6% of the prizes, including the car. (An amusing joke at the end of the film is that he only runs away with 31.8% of the prizes, resulting in a need for him to reevaluate his calculations.)  What does this have to do with college financing?  Well, in today’s digital age, the reality is that you don’t have to be a genius to cash in on grants and scholarships if you are willing to exert a little time and effort.

As I’ve noted here before, college can be a significant investment.  As such, many students either look for an ‘all-in’ big scholarship to help cover the costs or give up on scholarships entirely.  The problem with this approach is that it ignores two truths: first, there aren’t an over abundance of big scholarships and, second, they are pretty competitive to get.  However, there are literally thousands of smaller scholarships out there to be had. 

Now, when I was in high school, it was difficult to identify scholarships sources.  There were scholarships in the community, but sitting through a typical graduation and awards ceremony would convince most of us that this small collection of scholarships are won by the same five kids.  The internet has made things easier today.  Scholarship aggregators allow students to identify multiple scholarships they may be eligible for, and do so with as little as a few mouse clicks.  The key is what you do with this information.

Here’s the deal: a $20,000 scholarship is great, but 20 $1,000 scholarships are just as good.  And, 25 is even better.  So, before you skip the application for the $500 or $1,000 scholarship because you think to yourself “what good will that do?”, think in terms of aggregation.  Check out this student’s story about how she turned multiple small scholarships into an almost entirely free college education to see what I mean: 

http://www.learnvest.com/2013/09/how-i-did-it-i-applied-for-100-college-scholarships/

There is another piece of the puzzle that students don’t always realize – scholarships don’t always go to top students.  There are so many scholarships out there, and each one is designed for someone different.  There is probably a scholarship out there for a left-handed, Harry Potter loving, redhead from Minnesota.  Scholarships can get that specific, so the key is to be broad in your search and be open to everything about yourself that you can bring to the table in the scholarship search.

So, where do you start?  The easiest place is online using one of the many scholarship aggregator sites or student search engines that also point to scholarships.  Here are a few suggestions:
 

www.scholarships.com
www.fastweb.com
www.collegeboard.com
www.zinch.com
www.nextstep.com

This is just a start.  A quick google search will find you many more.  Then, after you’ve identified scholarships, add applying for 1 scholarship a day to your regular homework regimen.  You can even take Friday and Saturday night off.  If you keep at it, you’ll find you’ve applied for 20 scholarships in a month, and 120 in 6 months.  If they are all $1000 scholarships, it means a potential of $120,000 towards your education.  If you get only 10% of those scholarships, that is $12,000 towards your education – a worthwhile investment.  If you figure it takes an hour to apply for each scholarship, that is like getting paid $100/hour to apply for scholarships.  Well worth it!

Don’t let the cost of college scare you away.  There is free money out there to help you pursue your higher education – all it takes is a little extra effort.  Be a real genius and go for it!

For more scholarship resources, follow the Dean Dean on twitter @DeanDean1865.

Digesting the State of College Admissions

This past week, I had the opportunity to attend the National Association of College Admissions Counselors (NACAC) conference.  This yearly gathering provides a unique opportunity for me and other professionals to learn about each other’s institutions and to reflect on the counseling of students in the admissions process as well as the state of higher education.

First, let me share that I’m incredibly proud to be a member of this organization that, through our Statement of Principles of Good Practice (SPGP), governs and advises school counselors, independent counselors, and colleges as to what is ethical and appropriate behavior in helping students and families navigate to college search process.  I have the privilege of serving as a delegate for our affiliate organization, the New England Association of College Admissions Counseling (NEACAC).  As a delegate, I am able to participate in our national assembly that examines and adjusts the SPGP to keep up with a rapidly changing world so that the interests of students and families are protected in this important process.

Here are a few tidbits that I took away from this year’s thoughtful and insightful meetings:

1.      Despite what families might think, we’ve got your back.  School counselors, independent counselors, and college admissions officers all want the same thing: for the student to find the right fit, have a successful (and enjoyable) college experience, graduate, and be prepared for both a first job and to adapt to a rapidly evolving economy so that they have an even better job in the future.

2.      Colleges and Universities are just as concerned as families about the rising costs of college.  Discussion this week centered on how we can better help prospective students and families find the aid they need to invest in a college education, recognizing that in order for colleges and universities to accomplish our goal of preparing students for the future, there is a cost associated with regards to infrastructure and instruction. 

3.      Online education is continuing to expand, but it is not replacing the highly valuable on-campus classroom experience anytime soon.  The new challenge for colleges and universities is not what content to share with students, but how to prepare students to access, absorb, understand, and critically analyze the growing array of knowledge and content available to them in the online world.  This requires face to face interaction and close relationship development that the online space simply cannot provide.

4.      The death of the Liberal Arts has been greatly exaggerated.  World is Flat author and New York Times columnist Thomas Friedman served as our keynote and one of his major messages was the continued importance of broad based, liberal arts education.  He noted that the fundamental knowledge and skill set we all need to be successful is still rooted in the liberal arts, and that the most successful people are those that have the tools necessary to adapt, a key component to liberal arts education.

5.      Fit still matters most.  While many families are overly focused on arbitrary rankings, the majority of professionals I talk to agree that the rankings are just one tool in the process, not the primary one.  College counselors encourage students to explore the rich variety of colleges and universities and find the environment that is most appropriate to help them maximize their personal and academic potential.  In many cases, that perfect school won’t be on the U.S. News top whatever list.  With over 3,000 accredited colleges in the U.S., plus international options as well, a little research will go a long way in your college search, and many skilled counselors are available to help you find the best fit for you.

Receiving a college education is more important than ever for you to be successful.  As high school seniors enter into application season, know that there are dedicated professionals here to help. 

Why Exactly DOES College Cost So Much

I’ve written here on a couple of occasions about the ROI, or return on investment, associated with a college education.  However, in my discussions with families over the last year, it has become apparent that, while ROI is of concern to families, the real focus of most in the college selection process today is COST.  So, let’s spend a few moments on this topic.

When talking about the COST of college, it is important to consider what is meant by the term.  There are two numbers to pay attention to when considering cost: GROSS COST and NET COST.  GROSS COST refers to the sticker price – what the college prints in its materials as the cost of the institution.  This is usually broken out into three areas:  Tuition, Room & Board, and Fees.  As an example, here is a breakdown of the GROSS COST of Dean College per year:

Tuition:   $33,230
Room & Board:  $14,260
Fees:  $250

By comparison, here is a breakdown of the GROSS COST of UMASS Amherst per year:

Tuition:  $1,714 (MA Resident)
Room & Board:  $9,937 (MA Resident)
Fees:  $11,516 (MA Resident)

A couple points on the examples above.  You will note a higher tuition rate at Dean than UMASS.  This is due in part to Dean being a private school and therefore not receiving investment from the State to run the institution.  However, you will also note that the true GROSS COST of attendance at UMASS is actually calculated in FEES, not TUITION.  Fees at UMASS are 572% higher than tuition, but must be calculated into the GROSS COST of attendance.  So, the total difference in GROSS COST between Dean ($47,740) and UMASS ($22,877) is $24,573/year – significant.

BUT… GROSS COST is not what most students pay, particularly at private colleges.  In fact, college pricing is a lot like buying a car – you almost never pay sticker price.  Colleges and Universities offer students assistance to help bring down the GROSS COST, and when this assistance is taken into consideration, the remaining amount is referred to as NET COST. 

To explain, let’s look at our Dean and UMASS comparison again.  I utilized the NET PRICE CALCULATORS for both Dean College and UMASS.  When entering data, I used a mythical student from a family of 5 with a household income of $90,000/year and 1 student in college:

                                                                                          DEAN                    UMASS
GROSS COST                                                                   $47,740               $22,877
ESTIMATED ASSISTANCE FROM COLLEGE                $20,000               $818     
NET COST                                                                        $27,740               $22,059              

So, when comparing the NET COST, we see that the difference between Dean and UMASS is much less than originally seen when only comparing GROSS COST:  $5,681.  So, the actual cost difference to a family for a private school education (and a significantly smaller school in Dean’s case than a large school) is less than $6,000.  Note that these numbers do not take into consideration federal financial aid, student loans, or outside scholarships.

Now that we’ve tackled the intricacies of COST in dollars and cents, let’s look at what these dollars pay for.  Educating a student has a price tag, and that price tag can be substantial.  The infographic below illustrates well just how tuition dollars are allocated:



Let’s breakdown the categories:

·        Instruction is fairly self explanatory.  This includes salaries to faculty who teach classes (in most cases, people with advanced degrees).    

·        Research refers to dollars spent to set up labs and research projects, to purchase materials to support research, and the infrastructure required to facilitate research.

·        Public Service refers to dollars spent in the community, either in terms of donations of monetary support through sponsorships or advertising or the cost of providing volunteers and other resources to community agencies.

·        Academic Support refers to a variety of services provided to college students ranging from tutorial services and academic centers to academic advising to career development services to counseling services to disability support services.

·        Scholarships refers to money invested from tuition into scholarship funds to support future students.

·        Auxiliary Enterprises covers student life activities, athletics, on campus events and weekend activities, and the infrastructure costs of an institution from facilities maintenance to heat and electricity to campus security.

·        Independent Operations are dollars spent on the often unique offerings of educational institutions such as conference and meeting facilities, theatres, and athletic venues.
 

When viewing this infographic, many will make the mistake of suggesting that only 32.7% of tuition dollars go to instruction, but this view misses the point.  Many of the other categories highlighted here reflect direct expenditure on academic content delivery, such as the benefits that come from on campus research (11.2%) and academic support services necessary to the academic success of today’s students (30%).  So, when combining these three areas, 73.9% of tuition expenditures are paid to support academic content delivery.  The remaining 26.1% is no less important, because college is a living/learning experience that is dependent upon state-of-the-art facilities (everyone wants functional and reliable technology infrastructure) and student activities that help shape the personal development of students.

Let’s look more specifically at Room & Board expenditures.  Because college is a living/learning experience, the benefits of on campus living cannot be understated.  However, there is a monetary cost associated with supporting a student safely in on campus living.  As an example, the cost of Room & Board at Dean College is $14,260.  Where does this money go?  Consider what it would cost a student to move out of mom and dad’s house to live on their own per month:

RENT:                   $1,000
FOOD:                  $300
INTERNET:          $75
CABLE TV:           $80       
TOTAL:                 $1,455

Now, multiply that $1,455 by 10 months and you get a total expense of $14,550.  There is your Room & Board cost. 

Certainly, the cost of college is a concern to many in today’s challenging economic conditions.  However, it is only when we look critically at what is being delivered by the dollars actually paid for families to fund higher education that we see that NET COST (which has actually gone DOWN over the last 7 years as institutions increase grant and scholarship expenditures) that we see that the money invested is being well managed. 

When we consider recent studies that bring new light to the incomparable value of higher education toward economic stability and prosperity, we see that college remains one of the most worthwhile investments one can make.

The Small College Advantage

Throughout the course of my career, I have had the unique opportunity to see the full range of higher education offerings. I am a graduate of and worked for a large, flagship state university (Binghamton University), I've worked for a mid-sized Jesuit University (Fairfield University), I've worked for a highly selective private university (Brandeis University), a community college (Quinsigamond Community College), and now a small, private college in my current position at Dean College. The most important lesson I have learned about American higher education through these experiences is that our system of higher education affords students maximum choice to identify the environment that is best suited to their learning needs, and that there is plenty of capacity to serve very different students.

I have also observed that, when the economy suffers, the greatest strength of our system of higher education comes under intense scruiteny. It is too expensive, many will argue, even though all the data points to the fact that net cost has remained fairly constant at private colleges and universities over the last 10 years.  We should be focusing more on-line because it is cheaper, others will say.  However, this argument ignores the fundamental flaws in on-line education, not the least of which is that the majority of high school graduates are not equipped to handle the structure of on-line education.  Finally, and the one that I find most egregious, is the belief (when the economy is weak) that students should opt for more vocational education or pre-professional programs over the liberal arts.  This, in spite of the fact that most leaders in business and industry have come out of the liberal arts tradition.

The group that is most rigorously scrutinized are the small, private colleges.  I understand the argument well.  In my younger days as a newly minted graduate of a public university, I would have been leading the charge.  Why?  Because my perspective then was limited by my own experience.  I hadn’t had the opportunity to see what else higher education had to offer.  Don’t get me wrong, I loved my undergraduate experience, and it was the right one for me.  But what experience teaches is that what is the best for one person is certainly not the best for another.  The reality is that many high school graduates will get lost at a large, public university.  They need the close attention and one-on-one contact that only a small, private college can provide.  This article does a great job of illustrating this point:  http://www.huffingtonpost.com/donna-randall/small-colleges_b_2042838.html

The small, liberal arts college is a key cornerstone to our higher education system, a system that is the envy of many in the world – no wonder that far more students flock to the United States to study than leave.  To discount the value of small private colleges for the many students who would benefit most from them is to ignore that which has helped make our nation great.

Presidential Debate - Round 2

As the presidential candidates face off for their second televised debate tonight, check out what my boss, Dean College President Dr. Paula Rooney, has to say about the debate's location in this op ed to the Huffington Post:

http://www.huffingtonpost.com/dr-paula-m-rooney/town-hall-debate_b_1971331.html

Coke vs. Pepsi

In my capacity as Admissions Dean, I am often asked to sit on panels for parent college information nights at high schools.  Let me tell you that this is one of the most enjoyable aspects of my job – it truly allows me the opportunity to give families the real ‘inside scoop’ I know they crave.

Generally, I am asked to talk about the college search process in general and how to choose a college to apply to and ultimately enroll at.  This is certainly a tricky topic as it depends a great deal on your individual metric for evaluating what is the ‘best’ school for a given student.  For a while, I struggled with an accessible way to share my thoughts on the topic.  I have fairly strong feelings in this area, believing that the focus is too often centered on metrics such as admit rate, application volume, GPA and SAT averages, or ‘name’ schools that are easily identifiable by a Division I athletics program.

Then, a couple years ago, I had my one bright idea for the decade (marrying Dr. Wife was the one from the last decade, in case you wondered.)  I realized that selecting a college is a lot like the age old battle of Coke vs. Pepsi.  This realization led to the creation of an exercise which has a dual purpose:  First, it allows folks who have been stuck in rush hour traffic only to be squeezed into the HS auditorium a chance to spread their ways.  Second… well, let me set it up first.

The exercise goes like this.  Everyone stands up.  Then, I ask that you think about a wonderful, hot day at the beach.  You’re thirsty, and you want a soda.  Imagine that you have access to a cooler filled with every possible soda option there is.  You can choose any soda (or cola or pop depending on your preference) that you desire.  Which would you choose?

I think ask everyone that you choose good old fashioned Coke Classic to sit down.  Next, I ask everyone that would choose a plain Pepsi to sit down.  Then, I ask everyone to look around.  Inevitably, when given a choice of any soda option, the Coke Classic and Pepsi contingent add up to about 10% of the audience.  This is the college search.

If Coke represents all flagship public universities (i.e. UMASS Amherst, UCONN Storrs, Binghamton, UNC Chapel Hill, etc.) and Pepsi represents the Top 50 U.S. News Privates (Harvard, Yale, Amherst, etc.), then the vast majority of students are going to school somewhere else.  With almost 4,000 accredited colleges and universities in the U.S. (not to mention universities abroad), you have a lot of options.  The goal is to find the school that will quench YOUR appetites for learning, social life, and personal growth, not some prescribed ‘ranked’ school that is most recognized on a bumper sticker.

To my point, I sometimes refer to Dean College as the Jolt Cola of colleges and universities.  It isn’t for everyone, but those that are looking for what we offer swear by us.  You may be looking for Jolt Cola.  You might be looking for Dr. Pepper.  You might even be looking for Coke or Pepsi.  The key is to keep an open mind and explore all your options so you can find the place that truly fits your tastes, not just the options that are ‘brand’ names.  If you take the time and effort, you will likely find that special flavor that satisfies you again and again.