Balancing Cost and Value When Choosing a College
Families Feeling the Pinch Change the Way They Think About College
Sep 28, 2009
As savings portfolios and financing options dwindle, parents with college age children are facing critical choices. Many families who in better times would have offered their children a college education “at any cost” are re-evaluating that choice.
With potential annual savings of tens of thousands of dollars, public education is looking more and more attractive to such families. And many economists believe that shifting attitudes toward higher education will persist even after the economy recovers.
Weighing the Cost and Value of College
“Families are becoming much more price – and value – conscious,” says Ball State University’s Dr. Joseph Losco, an expert on the history of education. Losco made these comments in the July 16, 2009 article, "Weighing Price and Value when Picking a College," in The Wall Street Journal. A recent Sallie Mae-Gallup study of 1,600 college students and their parents reports that parents are increasingly anxious about tuition - and students are less convinced about the value of a degree, compared with a similar survey conducted last year. In the 2008 Sallie Mae-Gallup poll of 720 parents of college students, 46% said they had never ruled out college for their children based on cost.
Losco points out that in the past, baby boomer parents have been somewhat complicit in keeping college costs high. In fact, some colleges have feared that lowering their sticker price would hurt their image. Until now, parents have had the notion that they should “give it all up for the kids,” Dr. Losco says. But the current economic climate has many parents, and their children, reconsidering the value of a pricey college education.
Belt-tightening Will Last Even After Economy Improves
While the U.S. economy will eventually recover, the current recession is expected to leave a lasting mark on higher education. The easy access to financing that has kept college costs high is probably a thing of the past. The American public is becoming aware that graduates’ wages have not kept pace with increases in college costs – already up 67% at private colleges and 84% at public four-year universities this decade.
The current Sallie Mae-Gallup study indicates that parents and students are borrowing less for college, while the percentage of students from middle-income households attending state schools is rising, and more lower-income students are enrolling at community colleges. “We would expect to see an even greater shift next year,” says a Sallie Mae spokesperson.
A New Pragmatism
The new economic realities facing parents and students could well mean a paradigm shift in the way American families think about college, degrees, and work. For most families, the luxury of allowing students sometimes well over four years and multiple changes of course in an effort to find their ideal career path may be gone. In its place, an increase in pragmatism and budget consciousness seems likely to be the new order of things.
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