Parents: Don’t Ignore These 5 Numbers when Comparing Colleges

Before parents sit back and let their kids drive the college application process, there are some numbers they need to understand when comparing colleges. Because while it’s true that it’s the student who is going to attend college, the colleges are pretty clear that they are going to turn to the parents to pay the bill. And anyone expected to write a check to cover the cost of college, needs to have some meaningful numbers to evaluate the value of what their buying. However, not all numbers are created equal. For example, the acceleration speed of a car and its sticker price are both numbers, but one probably will have priority over the other for most people making a car purchase. Understanding these five numbers will provide you with some basic references for comparing colleges to decide if you’re willing to pay the college’s asking price.

1. Total Cost of Attendance
2. College Graduation Rates
3. Average Acceptance Rates
4. Expected Family Contribution (Student Aid Index)
5. Average Net Price

1. Total Cost of Attendance

Most parents are aware that college is EXPENSIVE! But fortunately colleges have an answer for that–financial aid! College admission professionals everywhere, sooth worried parents with the refrain, “hardly anyone pays sticker price.” And that’s generally true. Yet, the fact is that the Total Cost of Attendance is a critical base number in financial aid. If a school costs significantly more than another school, students will have to receive significantly more financial aid for the schools to have a similar cost in the end. It’s also the number you need to know to understand how much you’ll be expected to pay based on your Expected Family Contribution (EFC/SAI) but more on that later.

So Total Cost of Attendance is the number that families should use to understand the possible range of EXPENSIVE. And you really need to use the Total Cost of Attendance rather than just the tuition as found on many college search websites. Total Cost of Attendance is tuition plus living expenses, books, and other fees. Reporting tuition only can knock anywhere from $10,000 to over $20,000 off of the price tag.

This is the very argument that colleges use for not including it, some students will have much lower living expenses than others so it’s not fair to use for comparisons. Yes, it is. You need a starting number to work with. Once you’re narrowing down your list of colleges to apply to, feel free to break out tuition if it works for your family. Otherwise, pay attention to the Total Cost of Attendance.

The following table shows the average Total Cost of Attendance along with the lowest and highest among all 4-Year public and private colleges with at least 500 full-time undergraduates.

20-21 Total Cost of Attendance	Average	Lowest	Highest
Private Colleges	$57,736	$12,712	$81,531
Public Colleges (in-state tuition)	$24,866	$14,393	$41,528

In the case of Private Colleges, the tuition at the school with the lowest Total Cost of Attendance was only $4,300.

The following are the 10 private colleges with the highest Total Cost of Attendance in 20-21. I’m using 20-21 since that’s the latest available data I have but, yes, prices have gone up since then.

Top 10 Private Colleges by Total Cost of Attendance
1	University of Chicago	$81,531
2	Northwestern University	$81,283
3	University of Pennsylvania	$81,110
4	Brown University	$80,448
5	Dartmouth College	$80,184
6	University of Southern California	$80,151
7	Amherst College	$79,600
8	Washington University in St Louis	$79,586
9	Harvey Mudd College	$79,539
10	Yale University	$79,370

The following are the 10 most expensive public schools ranked by Total Cost of Attendance. It’s worth noting that tuition at the University of California institutions is only around $14,000. Does that dramatic room and board costs represent actual higher cost of living expenses, unnecessary housing features (can we say floating rivers?), or simply a way for schools to bring in more money? That’s something families have to research themselves.

Key Take Away:

• Use the Total Cost of Attendance rather than tuition alone to determine the sticker price.
• Know the average and start looking for the trade-offs in costs when comparing colleges.

2. College Graduation Rates

Speaking of tradeoffs, perhaps one of the most significant factors families should consider when comparing college costs and what the student is getting in return is graduation rates. Now, I have written plenty about college graduation rates, so I’ll just cover the basics here. The average 4-year college graduation rate for private colleges is 56.4% while the average for public universities is just 40.7%.

In general, students are more likely to graduate from private colleges and faster than those at public colleges. Does this make private colleges worth the cost? It really depends. Does the cost of potentially another year of school at a public university minus a year’s loss wages outweigh the cost of graduating in 4-years at a private school? When you’re comparing colleges this way, make sure you are using the 4-year graduation rate. The number commonly reported in the media and often used on websites is the 6-year rate.

The following is a list of the top ten private colleges ranked by 4-year graduation rates. As you can see, the graduation rates are significantly above the 56.4% average. Keep in mind, we’re dealing with averages. There are over 230 private colleges with graduation rates below the public college average.

Below is the listing of the top 10 public universities ranked by graduation rates. As you can see, they don’t match the private school list. However, they are all above the private school average of 56.4%. There are 70 public universities with graduation rates higher than the private school average.

Key Takeaway:

• Graduation rates represent real money in terms of how many years of college you pay for.
• The most expensive college is the one you don’t graduate from.
• Use the 4-year graduation rates when comparing schools.

3. Average Acceptance Rates

Here are two numbers that are likely to surprise many families, the average acceptance rates for colleges. Private colleges have an average acceptance rate of 67.5% while public colleges average 75.3%. Given the coverage of college admissions in the media, people expect the numbers to be much lower. Furthermore, according to UCLA’s Higher Education Research Institute survey of college freshman, 73% of students get into their first choice.

I know it will be hard for some people to accept this as good news. Their main objection probably has something to do with the quality of the schools. There’s not much I can do to address that especially if the definition of quality depends on something like US News College Rankings. In any case, hyper-focus on rankings flies in the face of the concept that it’s not where you go to college but what you do there that counts. And if you don’t believe that, I sincerely hope you aren’t in charge of hiring anyone.

If you’ll recall when discussing graduation rates, I showed that incredible range of rates for both public and private schools. Since the basic point of attending college is to graduate, I created the following table to show graduation rates by acceptance rates.

I used pretty broad categories for acceptance rates. As you can see, the average graduation rate declines as the acceptance rates increase. The table also shows the lowest and highest graduation rate for each category and you can see quite a bit of variation.

Here’s the thing about acceptance rates. If you only let in “top” students, you’re going to have better graduation rates. The question is will “top” students graduate and succeed at the same level if they go to a less selective school? The literature so far says “yes.” Top students aren’t being dragged down by students with lessor qualifications.

It comes back to the tradeoff I mentioned before because as the table below shows, it’s not just graduation rates that increases with lower acceptance rates, it’s price as well.

The numbers look different when you consider Average Net Price. The lowest acceptance category does not have the highest Average Net Price (more on that later). However, this is also the category that contains the schools most likely to meet full need.  Furthermore, the reality is that most students won’t get into schools in the lowest category so why focus on the exception rather than the rule?

Key Takeaways

• Most colleges accept over half of all applicants.
• Acceptance rates are an indicator of demand for a school. You can expect the usual marketplace rules to apply when something is in high demand.

4. Expected Family Contribution (Student Aid Index)

The problem most families have is that they don’t know how much they’ll actually have to pay for college. We’re back to the issue of families not knowing how much a college is going to charge them until they receive the bill. It’s almost as bad as healthcare, right?

Almost, but not quite. The problem in healthcare is that no one has time to compare prices on the way to the emergency room. Even if you’re missing how much colleges might contribute to your financial aid (and there are ways to get at that), you can have a reasonable idea of how much your contribution will be. It’s currently called the Expected Family Contribution (EFC) although they’ll soon be calling it the Student Aid Index (SAI). The EFC/SAI is the amount the federal government thinks you can afford to pay for college.

This is a knowable number. It’s probably a horrible one since it’s almost always more than families expect to pay. But you can know it. There are a variety of EFC/SAI calculators available that take about 10 minutes to use.

EFC/SAI is also a number that is the minimum families should expect to pay. The reason is that there are only around 80 colleges that will meet full need. Yes, the money comes from the college, the federal government just calculates the number and provides Pell Grants to qualifying students (they don’t cover room and board at most schools.)

Now here’s the numbers you need to know regarding EFC/SAI. At public schools, 78% of students have unmet need that average $14,000. 80% of students at private schools have an unmet need average of over $20,000. These numbers are from 2015-16, the last time they were calculated, and there’s little reason to believe that numbers have improved.

The following table shows the average unmet need for public and private institutions. Remember at the beginning how I said that colleges tell you not to worry because you don’t know how much financial aid you’ll receive until after you apply? These numbers tell you that you should worry.

Key Takeaways

• Calculate Your EFC/SAI early, it’s a critical baseline for understanding your potential financial aid.
• Most colleges don’t meet full-need and will expect you to actually pay more than your EFC/SAI.

5. Average Net Price

Average Net Price is the number you should use when comparing college costs without knowing how much financial aid a school may award. It is the average price students paid once you deduct all gift aid. Gift aid is any money students do not have to pay back or work for, essentially grants and scholarships.  This is the money, on AVERAGE, students have to come up with to pay the college. This could take the form of loans, work-study, or savings. It’s the amount of money the student is responsible for.

When colleges tell you that you shouldn’t look at the sticker price, this is the number you should look at instead. Consider this example:

College A and B both have a Total Cost of Attendance of $60,000
College A Average Net Price is $30,000.
College B Average Net Price is $40,000.
Students attending College A are receiving more gift aid than those at College B.

And remember, this is an average. Some will be paying more, some will be paying less. However, a difference in $10,000 in Average Net Price is significant. You’ll have better chances for gift aid at College A. You can see how this plays out at the colleges listed earlier as having the highest Total Cost of Attendance. When you look at their Average Net Price, you can see that families are likely to pay significantly less than the sticker price.

Yet, there is still quite a bit of difference in the Average Net Price among the schools. You can also see how some schools are much more generous is in their definition of need when you look at the Average Net Price for the highest income category. Students at Yale will pay significantly less than those at USC.

You can’t really use Average Net Price to determine how much you’ll pay. The numbers are averages and colleges don’t have to use the government’s definition of need. Furthermore, the Average Net Price lags at least two years behind other statistics. That’s two years for prices to increase.

What you can use Average Net Price for is to compare colleges based on that financial aid award they keep talking about. Not the one for you specifically (try the college’s net price calculator instead.) Rather, how much they provide in general which results in a reduction of the Total Cost of Attendance, or the sticker price if you will.

The following are the top 10 private schools ranked by Average Net Price. As you can see, art schools top the list. You can also compare the Average Net Price for these schools that actually have lower Total Cost of Attendance with than those in the previous table. Another reason to know the Total Cost of Attendance is so that you’ll have some idea of how much a $20,000 scholarship means for your pocketbook.

You don’t see as dramatic of a difference in the top ten list of public colleges by Average Net Price. Public institutions generally don’t provide as much gift aid because more people are able to afford them. What families need to pay attention to is to see if the financial aid they are providing is going to help meet need or are awarded based on merit.

Key Takeaways

• Use Average Net Price to compare colleges instead of Total Cost of Attendance.
• The actual amount of institutional gift aid students receive can still vary dramatically.