Last year the author Malcolm Gladwell set off a firestorm when he attacked the rapidly-increasing cost of college tuition. In a podcast titled “Food Fight,” Gladwell argued that tuition is out of control because schools are engaged in an arms race to increase amenities, at the expense of affordability. To make his point, Gladwell leveled criticism at an unlikely target: the gourmet meals being served in the dining halls of Bowdoin College, a small, liberal arts school in rural Maine.
Bowdoin did not hesitate in responding: They labeled Gladwell’s report “manipulative” and accused him of employing “false assumptions” and “anecdotal evidence” to draw “incorrect conclusions.” The debate then spilled over onto Twitter. When Gladwell shared pictures of students enjoying lobster dinners at Bowdoin, the college had a quick explanation: In Maine, lobsters aren’t actually that expensive. In the end, I doubt if Bowdoin changed its menu or if Gladwell changed his mind. The debate continues.
Whether it’s the lobster or other factors, the unfortunate reality is that college tuition has risen rapidly in recent decades, having outpaced inflation and wage growth for a number of years. But, because people disagree about the root cause, or causes, I don’t think consumers can expect any significant near-term improvement in affordability. Instead, if you have children approaching college, these are some strategies I would recommend:
First, be sure you are saving in 529 accounts. These accounts offer a tremendous tax advantage. If you have children going to college in the future, I see no reason not to set up a 529.
Recognize that there is a large (and growing) gap between colleges’ sticker price — now topping $70,000 in many cases — and the actual net price that your family might pay. Today, most colleges have a “net price calculator” on their website. Because need-based aid is largely formulaic, these calculators will allow you to determine fairly quickly what you might pay at each school. Depending on your family circumstances, this may open your eyes to schools that you perceived to be out of reach, or it may help narrow your search.
Look beyond the traditional four-year bachelor’s degree. In the past, if parents could afford it, and their child had the aptitude, it was largely an automatic decision to move on to a four-year college after high school. That still makes sense in a lot of cases, but it shouldn’t be your only choice. Today, there are an increasing number of schools that offer professional training within undergraduate programs, allowing students to graduate in four years with a nursing or an accounting degree, for example. There are also programs that combine college and graduate school in fewer years than they would require separately. If your high schooler has a specific career preference, it is worthwhile to seek out these options.
Look beyond the traditional yardsticks. When I was applying to college — and still even today — US News‘ college rankings were the yardstick by which the world was measured. But, today, it is important to take a broader view. Make no mistake: The schools at the top of the US News list are all outstanding. If your child is accepted to Harvard, I would waste no time sending in your deposit. That’s not the problem with the US News rankings. The problem is that there are lots of schools that are also excellent, but by different measures, that do not show up on the US News list. For that reason, I would recommend that you consider alternative rankings, such as those compiled by MONEY Magazine. (See http://time.com/money/best-colleges/rankings/best-colleges/.) In contrast to US News, which puts a lot of weight on “peer assessment” — in other words, prestige — MONEY takes a more quantitative approach, giving significant weight to affordability and career outcomes. Because of these differences, the MONEY rankings highlight schools that score lower on the prestige scale but punch far above their weight in delivering results for their graduates. For example, while #1 on the MONEY list is an Ivy League school, #2 is the City University of New York, and four of the top five are all public universities.
There is no question that college tuition has become an urgent problem. But, with a little bit of a different approach, there are certainly ways to make it less of a financial burden for your family.