Working with Prospective Parents and College Cost
Recently, we had a conversation with a prospective parent who is sending her son to a private institution in the northeast. The financial aid package the family received was perfectly precise. “It was like they knew exactly how much we could afford, not a penny more or a penny less,” she said.
And she is not wrong; the college investment will take almost everything a family has. Thus, for most families, value is less about finding an ideal fit and more about making a good compromise. Eduventures new Prospective Parent Research helps institutions understand how cost considerations are the backbone of college choice.
The Importance of Cost
We call college cost the “backbone” of college choice because it is the most prominent preference among many strong preferences that parents have for their children. These other preferences flow from cost or structurally relate to the cost and value conversation. Figure 1 shows that 64% of parents have a strong preference about the cost of the colleges that their children will attend and almost all parents have some preference.
In addition to cost, parent preferences are, on average, for: higher rankings, schools that are closer to home, in-state public institutions, career-articulated majors, and lucrative careers—a key topic featured in our forthcoming report. The crux of the matter, though, is that parents must balance these important dimensions with cost. This is evident in the open-ended comments of many cost-conscious parents.
“The need to balance college wants with college debt. It’s okay to dream big, but that means she needs to work extra hard to get scholarships to help offload a more expensive school.”
“She is looking at some very costly options and convincing her that a two-year college is the best path for moderate resources.”
“We don’t have enough money for college, but we also don’t qualify for any financial aid as we are middle class.”
“Finding the financial means to be able to set her on the career path of her choice.”
“Balancing ‘following his dreams’ with financial reality.”
These parent responses underscore the balancing act that families go through during college searches. Parents are working to do the best for their children, but they must keep expectations aligned to reality. These words show us that parents aren’t closing the door based on cost alone, but they are in a negotiation to find the best programs and the best future career options, without giving away the present for their families or the future for their children.
To do so, parents will be stretched just short of their financial limits. We asked parents who had a financial preference what their limit in one-year spending on total cost of attendance for college would be. Comparing these responses to the most recent national data available on actual net cost of four-year colleges, we see just how thin the margins are for families (Figure 2). For parents with children headed to in-state institutions, the cushion is about $2,500. For parents with children headed to private institutions, the cushion is even less, about $1,400.
This data has two implications. The first is that parents are realistic about what the potential costs of college might be. The second, is that higher education has finely tuned financial aid awarding through the use of the FAFSA, institutional methodologies, and financial aid leveraging to understanding exactly how much any family can pay—and extract it all.
Of course, this net cost limit differs in critical segments, principally by income, but also by type of school the child is likely to attend, and the academic skill level of the child. Low-income parents place limits, from about $8,600 per year for a lower performing child attending an in-state public institution to about $11,600 for a higher performing student attending an out-of-state institution. High-income parents place limits from about $27,500 for a lower performing child attending an in-state institution to about $38,500 for a lower performing student attending an out-of-state institution. (Interestingly, in the high-income band, among out-of-state students, parents are willing to pay more for lower performing students than higher performing students.)
But while cost is the number one thing that parents want to understand, it is not the only thing. It’s the backbone that provides the structure of the conversation, but other elements are critical too (Figure 3).The most important thing that colleges and universities can do is answer parents and guardians’ questions (see Figure 3).
Parents also want to understand program strength, health and safety, careers, and student debt. For parents with strong cost concerns, student debt has much higher relevance. These elements all flow from and inform the cost conversation. They play into the delicate balance of the family conversation about college.
The Bottom Line
To help parents in their family discussions about college, institutions should acknowledge the central role that college costs will play:
- Be transparent with students about the financial commitments of college so that parents aren’t left to do the job of expectation setting all by themselves.
- Provide parents with the best information you can about your institution’s true costs, scholarship opportunities, and student debt obligations so that they have the right information in their conversations with their children.
- Develop the value of your institution by informing parents about academic programs, connections to career and graduate school, and the health and safety of students.
- Explore options for cost reductions or new tuition models to move the discussion from compromise to ideal fit.
For further insight into the parent-student relationship during college search, look for our forthcoming research report.
Pandemic-Proof Your Enrollment Strategy with Admitted Student Research
This recruitment cycle challenged the creativity of enrollment teams as they were forced to recreate the entire enrollment experience online. The challenge for this spring will be getting proximate to admitted students by replicating new-found practices to increase yield through the summer’s extended enrollment cycle.
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- Competitiveness of your updated financial aid model
University of Nebraska–Lincoln: Keeping in Mind What Students Really Value
“What’s most impressive is that Mindset messaging increased the engagement students have on our website by at least 5 times. Without the website engagement from our digital ads with Encoura, we would not be in our current strong application position.”