Lowering College Costs on the Margin
In an earlier blog post, I argued that the fundamental solution to the college cost problem is in the hands of students and families. They are the ones who keep saying yes to ever higher tuition and fees. They are the ones who eschew modest accommodations in favor of schools with ostentatious dormitories. They are the ones who ignore the relationship between the cost of a degree and the average salary of a college graduate with that degree. Only when students begin making different choices in order to bring their expenditures more in line with the benefits of their degree will the problem be solved.
Note that this argument says nothing about fewer people pursuing a college diploma. It instead focuses on marginal changes that lower the cost of higher education for those pursuing degrees. There are numerous ways that students can lower the cost of their education. For example, many schools charge students the same amount whether they take three, four, or five courses a semester. I personally know dozens of cost-conscious students who take five courses a semester for four semesters, thereby graduating one semester early and shaving thousands of dollars off the cost of their degree.
Cost-conscious students can also take advantage of transfer credit. Many colleges and universities will allow a certain number of credits to be taken elsewhere and transferred in with pre-approval. By taking low-cost summer courses students at a community college or online, students not only lower the direct cost of their degree, but it can help them to graduate and start working sooner, lowering the opportunity cost of college.
A recent report titled How America Pays for College 2012 by the educational lender Sallie Mae provides some evidence that attitudes and behaviors are changing. Based on a survey of 1,600 18-24 year-old college going students and their parents, the report provides numerous examples of increased cost-consciousness. While I encourage everyone to read the entire report, I want to highlight two interesting items here.
First, the average amount paid for college has fallen for two consecutive years. As the report summarizes on page 6, “American families reported taking more cost-saving measures and more families report making their college decisions based on the cost they can afford to pay.” Second, this seems to be the result of a majority of students and families actively trying to lower the costs of college by choosing less expensive colleges, living at home, having a roommate, etc. This newfound cost sensitivity seems starkest among high-income students and parents, with the percentage living at home rising from 24 percent in 2010 to 47 percent in 2012. While these are both positive signs that attitudes are changing, only time will tell if this change is permanent or a temporary response to current economic conditions.