Only a small number of people actually pay the full retail price. For others—folks who buy stuff on sale (and there’s always a sale), or who get financial aid—one of the reasons these institutions are attractive because it feels like they’re getting a deal.
The Boston Globe reports that the number of New England colleges topping the $50K mark for a year’s tuition and fees is about to double. Will students be turned off by the idea of dropping two hundred grand for a four-year degree? Probably not, and one reason why not is that a lot of students won’t be spending nearly that much:
New England colleges are the most expensive in the country, with the average sticker price at private colleges ringing in at $43,884 this school year.
After financial aid grants are taken into account, though, the net cost of private US colleges for the average family is $21,240 today, slightly less than it was five years ago. This is partly due to many wealthy colleges such as Harvard and Yale, which have boosted their financial aid significantly for middle- and upper-income families in recent years.
In the same way, we’re excited by the prospect of buying a car for $5,000 less than the sticker price, we’re psyched by the idea of scoring an ultra-expensive education on the cheap—even if the post-discount price isn’t really cheap at all:
Analysts say many families would choose a $50,000-a-year college if they received $25,000 in scholarships over a school that cost $25,000 to begin with. But they point out that sticker price does not necessarily correlate with quality — many mediocre schools charge as much as or more than Ivy-brand institutions.
“The reality is, many students and parents tend to judge colleges by the price,’’ said Sandy Baum, a recently retired Skidmore economics professor who is a policy analyst for the College Board. “If they lowered the price, many institutions may lose applicants because families won’t think they’re as good. People like to say they’re getting a discount.’’
Here’s hoping that by the time my kids are ready for college, there are coupon codes you can use to knock an extra 20% off tuition.