{"id":32841,"date":"2023-11-07T19:37:31","date_gmt":"2023-11-07T19:37:31","guid":{"rendered":"https:\/\/microloannexus.com\/personal-finance\/half-of-high-school-seniors-wont-apply-to-colleges-costing-more-than-40000\/"},"modified":"2023-11-07T19:37:32","modified_gmt":"2023-11-07T19:37:32","slug":"half-of-high-school-seniors-wont-apply-to-colleges-costing-more-than-40000","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=32841","title":{"rendered":"Half Of High School Seniors Won\u2019t Apply To Colleges Costing More Than $40,000"},"content":{"rendered":"
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With Americans again struggling to repay $1.6 trillion in student debt (second only to mortgage debt), high school seniors (and their parents) are becoming increasingly price sensitive in their college search. For private colleges that have long relied on a combination of high sticker prices, offset by big financial aid packages, this could be a problem.<\/p>\n

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In a new survey of current high school seniors registered on the Niche.com college search and review site, 89% said a school\u2019s published price would affect the likelihood they\u2019ll apply or inquire about that school, up from 76% of last year\u2019s seniors who said this. (While the survey is a self-selected sample, it\u2019s a large one, with 24,000 teens completing the survey this year.)<\/p>\n

Even more dramatic: 59% of the 89% who described themselves as price sensitive\u2014in other words, 53% of all seniors\u2014said they flat out wouldn\u2019t consider a school that costs more than $40,000 per year in total. Private colleges, on average, charged $41,540 in tuition alone for the 2023-24 academic year, up 4% from the year before, per the latest numbers from the College Board. Concern about prices goes along with growing doubts among Niche users that they\u2019ll be able to pay for college\u2014fewer than a quarter now say they\u2019re confident they can afford college.<\/p>\n

Very, very few students pay the listed tuition price at the private college they attend. Instead, the colleges offer students financial aid packages that steeply discount the tuition through merit- and need-based institutional grants. As tuition rises, so does financial aid; during the 2022-23 academic year, students paid an average of only 49% of a college\u2019s published price, according to numbers from the National Association of College and University Business Officers.<\/p>\n

But the list price is posted on the college\u2019s website and that figure can scare off prospective students who don\u2019t know how private colleges\u2019 opaque pricing structure works. \u201cList price matters, particularly for students attending under-resourced [high] schools where college advising can be hit or miss,\u201d says Bob Massa, principal and cofounder of Enrollment Intelligence Now, a college consulting firm. Forty-eight percent of Niche survey respondents said they preferred to get information from their school or college counselor, and this was even more true for traditionally underserved students. If their high school counselor doesn\u2019t know (or doesn\u2019t have time to explain) average net price, the student could remain in the dark.<\/p>\n

Private college officials are quick to brush aside the sticker price and steer students instead to the institutions\u2019 net price calculators, which allows prospective applicants to get an estimate of their actual out-of-pocket costs. Colleges whose students receive federal financial aid are required to offer such calculators. But the sticker price is what pops up in a quick Google search, and a student\u2019s estimated net price is hidden behind a form that requires students to input information they might not even know, including their parents\u2019 salaries, cash in their bank accounts and sometimes even their mortgage and 401(k) balances. Some tools also ask for a student\u2019s grade point average and standardized test scores to factor in possible merit scholarships.<\/p>\n

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\u201cColleges tend to shy away from promoting net price, because the average grant or scholarship is just that\u2014an average. An individual could receive more or less than that amount\u2014there is no hard and fast number for the price a specific individual will pay,\u201d Massa says. \u201cIt takes time to explain net price to students and parents\u2014time that schools simply do not have,\u201d if prospective students will not even investigate an expensive college. He recommends that colleges push the net price calculator in all of their marketing to prospective students. \u201cA \u2018You can afford X University\u2019 campaign based on net price paid by different groups of students would help land applications from those who are scared away by the list price,\u201d he adds.<\/p>\n

A handful of private colleges have executed tuition resets through which they publicly slash their sticker price (and quietly lower their financial aid packages to match) in order to draw in students that might have otherwise ruled them out as too expensive. For example, Bridgewater College, a liberal arts school in Virginia with about 1,400 undergraduates, cut its tuition by 62% in August, from $40,300 to $15,000.<\/p>\n

\u201cThe original purpose of tuition discounting was to make higher education affordable to low-income students,\u201d Bridgewater president David W. Bushman said in a press release explaining the dramatic shift. \u201cBut over time, the practice has resulted in higher and higher tuition sticker prices that bear little resemblance to the actual cost of education. We\u2019re now discouraging the many students and families whom the system was designed to attract. Worse yet, at a national level, we\u2019re undermining the notion that a college education is worth the price.\u201d<\/p>\n

Wartburg College in Waverly, Iowa also reset its tuition price in August, from $48,490 to $25,000. Colby-Sawyer College in New Hampshire, Fairleigh Dickinson University in New Jersey (ranked #461 on Forbes\u2019<\/em> Top Colleges list), and Washington & Jefferson College in Pennsylvania (ranked #351) are among the many colleges that have tried to slash their prices to draw in wary students. For colleges that recruit most of their students regionally and that do not have national name recognition, tuition resets do lead to an increase in applications over five years, according to research from Kennedy & Company, a higher education consulting firm, that examined the outcomes of tuition resets at 72 colleges between 2012 and 2019.<\/p>\n

That said, resets don\u2019t make sense for every college. A school is unlikely to significantly cut their tuition if they enroll a significant number of students who pay full price, Massa says. \u201cEspecially if universities have more than a handful of \u2018full payers\u2019 who receive no institutional financial aid support, a lowering of tuition will have a significantly negative impact on net revenue,\u201d he adds. That\u2019s why you likely won\u2019t see colleges with swelling applicant pools and strong name recognition\u2014think the Ivy League schools, Amherst College, Stanford University, the University of Southern California\u2014slashing their list prices anytime soon.<\/p>\n

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Moreover, many students and parents, particularly from affluent families, are still susceptible to \u201cprestige pricing,\u201d\u2014a marketing idea that if a product, service or college costs more, it must be of a higher quality or reputation. Four in ten students say that a college\u2019s brand or name recognition matters to their decision making, according to the Niche survey. Affluent students were even more likely to say this. \u201cI believe that a good brand name is imperative to getting a high-quality job,\u201d one survey respondent offered.<\/p>\n

The model of a high price, combined with steep discounts, has been dominant at private colleges for decades. It\u2019s unclear how many schools might follow the handful which have abandoned that model.<\/p>\n

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With Americans again struggling to repay $1.6 trillion in student debt (second only to mortgage debt), high school seniors (and their parents) are becoming increasingly price sensitive in their college search. For private colleges that have long relied on a combination of high sticker prices, offset by big financial aid packages, this could be a<\/p>\n","protected":false},"author":1,"featured_media":32842,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":{"0":"post-32841","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance"},"yoast_head":"\nHalf Of High School Seniors Won\u2019t Apply To Colleges Costing More Than $40,000 | Micro Loan Nexus<\/title>\n<meta name=\"description\" content=\"With Americans again struggling to repay $1.6 trillion in student debt (second only to mortgage debt), high school seniors (and their parents) are\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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