Many parents have asked this same question during my live seminars on finding affordable colleges. It is a common misconception that the sticker price of a college is directly related to the quality of the education your child will receive. This is understandable considering how goods and services are given value in our country—we often perceive items or services that are more costly as being somehow of higher quality. Obviously, in some cases, such as cars or homes, this might be true. The real question, though, is does that perspective hold true when examining colleges?
In our country, the most prestigious colleges—the Ivy League schools, for example—are typically the ones that have the highest sticker price. However, the sticker price, or the listed cost, of a college is not what each family pays. The amount each individual family actually pays is based on net price. Net price is calculated by subtracting grants and scholarships that the student has been awarded from the original sticker price. This is what makes college selection so different from many other purchases. The net prices for schools with the highest sticker prices can often be lower than those at many other colleges. That is just one reason why you can’t correlate price with the quality of a college.
Furthermore, researchers have challenged the notion that schools with high sticker prices actually offer students the greatest return on investment after college. Let’s assume that you are choosing between different types of colleges—a state school and a highly selective private college, for instance—with different net prices. If you are concerned that choosing the college with the lower net price might force you to sacrifice quality, I urge you to refer to a New York Times article on a study done by Stacey Dale and Alan Krueger. These economists tracked the earning power of students who graduated from the most prestigious colleges in the country. They began with the assumption that students who graduated from the “perceived top schools,” earned more money after graduation. However, after comparing those students with other students who had similar academic and personal profiles from random colleges across the country, they found no difference in earning power. Their findings suggest that being successful after college—when basing the idea of success on earning power—has more to do with the student than the college from which the student graduates.
I would strongly encourage all families to approach their college searches with this mind-set. Choosing an affordable college does not have to mean compromising the quality of your student’s education or life after graduation. In fact, choosing an affordable college will set your student up for a better life after college that is not burdened with excessive debt.