Examining College Spending and Its Link to Price

1. Examining College Spending and Its Link to Price A Practical Workshop

2. FEATURING • Kathleen Payea, policy analyst, College Board • Matt Hamill, senior vice president of advocacy and issue analysis, National Association of College and University Business Officers • Steve Hurlburt, deputy director, Delta Cost Project, American Institutes for Research

3. How many Don’t like/feel uncomfortable with… • MATH

4. “Follow the Money”

5. Cost & Price are hot stories!

6. The Basics: “Sticker Price” • Definition: A college’s published price • But what is “price”? • Published tuition? Nope! A majority of universities now charge extra fees or “differential tuition” for at least some of their courses. (See research by Glen Nelson, currently senior vice president of finance and administration for the Arizona Board of Regents) And some colleges charge “fees” not tuition.

7. “Sticker price”: Direct costs v. total Cost of attendance • “Direct costs” = tuition, fees, room & board. Some schools charge lower tuition because they have high dorm prices that return profits to the school. Some schools have a “comprehensive fee” that includes tuition, fees, room and board. • By FEDERAL LAW, colleges are required to “make readily available to current and prospective students” a full cost of attendance that includes tuition, fees, room, board, books, travel and a budget for miscellaneous items. (34 CFR 668.43 unfortunately, the law does not say when, where or how…)

8. The Basics: “Net price” • Only about half of all college students pay out of their own pockets the full price that colleges publish. (http://nces.ed.gov/programs/digest/d11/tables/dt11_353.asp) • 2/3 of college students attending full-time get grants (i.e. discounts from published prices) • 85% of freshmen at private universities get grants (i.e. discounts from published prices.) Average size of discount: 43%. (NACUBO)

9. The Basics: “Cost” • The cost of a college education is not the same as the price colleges advertise or the price they actually charge parents. • Yale says its 2012-13 $42,300 tuition is only “about half” of the true cost of a year’s study. http://scg.yale.edu/files/frequently-asked-questions • Taxpayers, alumni or other college revenues subsidize many students who think they are paying “full price.”

10. Great story exposing the disconnect between costs and prices • Bloomberg story 5/3/12: “Rutgers Football Fails Profit Test as Students Pay $1,000. (Rutgers adds $1k in fees to student bills to cover costs of football programhttp://www.bloomberg.com/news/2012-05-03/rutgers-football-fails-profit-test-as-students-pay-1-000.html)

11. Sticker v. Net: • Kathleen Payea is a Policy Analyst for the College Board.  She co-authors two reports in the College Board’s Trends in Higher Education series: Trends in Student Aid and Education Pays.

12. Price v. Cost • Matthew W. Hamill, Senior Vice President, National Association of College and University Business Officers

13. Costs & Expenditures • Steven Hurlburtis Deputy Director of the Delta Cost Project, and a researcher in the Education, Human Development and Workforce Program at the American Institutes for Research (AIR)

14. Dive into costs at a private college: 990 • Compensation for President, coaches • Total revenues and expenses • Interest • Fundraising costs and gains • Contractors

15. Resources: Prices • Enrollment, graduation rates, tuition, aid, etc. etc. NCES http://nces.ed.gov/ • College prices, aid, return on education: trends.collegeboard.org • State grants: nassgap.org • Basic financial aid info & stats: finaid.org • Tuition discounting:http://www.nacubo.org

16. Resources: Costs • State budget info: Grapevine http://grapevine.illinoisstate.edu/ • College spending and tuition trends:  Delta Cost Project http://www.deltacostproject.org • Guidestar.org