What to Know About the Cost of College

College Student

Author Ron Lieber on his new book, The Price You Pay for College, and what every prospective student should consider

Every student or parent of a student who is considering going to college can agree on one thing: college is expensive. But why exactly is it so expensive, and does more expensive mean better? We spoke with New York Times columnist Ron Lieber about his new book The Price You Pay for College: An Entirely New Roadmap for the Biggest Financial Decision Your Family Will Ever Make. He gave us some great intel that every prospective student or parent of a prospective student should consider before committing to what will likely be the most expensive four years of their life. 

KCM: Why exactly has the cost of college gone up so significantly in the last 20 years or so?

Ron Lieber: On the state side, there’s been a decrease in subsidies in the money that state legislatures give to the university system. When subsidies go down, schools can either cut programs, fire people or raise the cost to students. Various state university systems have done a combination of these things, but students and their parents have ended up bearing a big portion of the brunt of the cuts.

Another major cost is the staff. Very highly trained people tend to work at universities. And that’s sort of how we want it, right? We’re sending our kids off to these places for four years,  and we don’t want them to be overseen and taught by 24-year-olds. Hiring qualified people is expensive — PhDs sometimes spend more time in training than doctors do. It makes sense that people who spend that much time training should get compensated appropriately. 

But it’s not just the professors. At both private and public institutions, there are more administrators on campuses for every 1,000 undergraduates than there used to be. 

There are more regulations at colleges than ever have before, and these regulations require staff to oversee them. They do things like making sure that the women’s soccer team has the same access to facilities and training as the men’s team does. There are also laws which have made it easier for disabled people and people with mental health conditions to come to campus. There’s more demand for mental health services, and enhanced career counseling, and technology assistance and infrastructure. And all of those things require people, and those people are expensive. So we can point to the numbers and complain about them all we want, but the point at which maybe 30% of those costs disappear is the point at which these institutions start to deliver their services pretty differently. If that was to happen, then we’d be annoyed as consumers.

You explain in your book that the price of tuition may vary greatly from student to student. Can you explain what merit aid is? 

The best way to think about merit aid is as a discount that has nothing to do with financial need. It is designed to get a student to choose one school instead of another — it’s basically a competitive weapon shrouded in the notion that you have done something academically noteworthy that deserves an extra discount. And sometimes that’s true. At some schools, everyone receives merit aid. But at other schools, only certain types of people get merit aid, or some people get way more than others, even if they don’t have an SAT score that puts them in the 90th percentile. It just depends on the institution’s priorities for that given year. They’re not going to publicize these priorities because competitively, why should they tip their cap?

If you are a parent who is a member of the middle class, and your child doesn’t necessarily qualify for financial aid, you’re probably going to be asked to pay more money for college than you ever thought possible. And so if you’re that parent, you definitely want more schools throwing $25,000 coupons at upper middle class candidates, because then the price starts to feel at least a little bit more reasonable. 

Ron Lieber

Do all schools offer merit aid? 

No, but it’s become a tactic for schools who are comparable but slightly less highly ranked to offer it. For example, Trinity College in Connecticut offers merit aid, and as a result Connecticut College was so weakened in the marketplace that they had to start offering it too. They saw the writing on the wall, and had to start throwing $20,000 coupons at students who likely could have paid full tuition. Then imagine how angry you are if you’re working at Colby College in Maine, and these qualified students keep getting picked off with incentives being tossed out by the Connecticut College admissions office. 

Imagine a list of like the 200 most selective colleges and universities in America, both private and public, and imagine merit aid oozing up from the bottom of the list over the last 30 years. Now it’s maybe reached spot 46. So if you’re ranked at 37 or at 28, you’re fighting it, but you’re worried. So if you are a highly qualified student, you should know that even though schools don’t publicize this, it’s likely an option for you. 

Money aside, there are three factors you note as being the most valued when it comes to choosing a school. Can you tell us what they are?

The first is education. People go to college to ride the intellectual roller coaster. To have their minds disassembled and reassembled by expert practitioners, who can turn your brain into a bigger and better version of its former self in a way that will still feel recognizable to you and hopefully to your family. This may seem obvious, but it turns out that there isn’t a lot of learning that goes on at a lot of schools. 

The second is kinship. You’re going to college to find friends. What sort of friends are you looking to find? Do those sorts of friends exist at that place? You’re looking for the people who will stay with you for life. And that’s not just peers, but also professors and mentors. People will grab you by the scruff of the neck and drag you to the lecture that’ll change your life, or to see the play you never thought you’d like, or to help you figure things out about yourself that you couldn’t figure out on your own. 

Then the third is the credential. One way people think about this is “I’m just going to get my ticket stamped, because I need this kind of degree to pursue this particular career, and it doesn’t matter so much where I get it from.” That can be a useful approach.

Then there are the people who are seeking a credential that will get them access to places that would otherwise not be possible. Part of it is the network, but part of it is the benefit of the doubt that graduating from a certain school will provide. If you’re at a venture capital firm and are thinking about investing in a tech company, you’re going to feel a whole lot better if the CEO went to MIT. This stuff matters, but only a little bit of the time. But in that little bit of time, it can matter a whole heck of a lot. 

This conversation has been edited and condensed.