By Aaron Anthony

My parents are both recently retired Boomers. When they went to West Virginia University in the early 70s, average tuition was around $500… per year (about $3,660 adjusted for inflation). At the time, the minimum wage was $1.60 an hour, meaning it’d take 313 hours to make enough money to pay for a year of college. Today, with average tuition at $10,740 and minimum wage in West Virginia at $8.75, it would take almost FOUR times as many hours to earn enough to pay school.

For most college students, it’s not possible for students to work their way through college the way previous generations did. Back then, college pricing was lower because states invested more in higher education. Theidea was that a better-educated person contributes more to the economy, and those contributions go toward making college affordable for the next generation of students.

Unfortunately, we’ve shifted away from that model… by a lot. Instead, we have a model where misinformationcan thrive and real costs can be difficult to predict.

In this confusing college cost landscape, it’s especially important for teachers, guidance counselors, coaches, or anyone who interact regularly with potential college students to get clear and accurate information on some college cost basics. With college application season upon us, recent student loan forgiveness news, and even more recent release of the often-controversial US News and World Reports College Rankings, now is a good time to review some important questions around college costs. 

All I hear about college is how expensive it is. Is it as bad as I have heard? 

College IS expensive, but maybe it’s not as bad as you think. The key cost number to look for is the net pricenot the published “sticker prices.”  

Headlines about runaway college pricing can lead us to think college is not affordable for anyone but the ultra-wealthy. While pricing at some private four-year schools approaches stratospheric levels, those headlines can be misleading because relatively few families pay the full price.  

Instead of sticker prices, families should focus on net pricing, which is the amount families pay for college after subtracting grant and scholarship aid. When we look at net prices, the actual out-of-pocket cost in 2021-2022 was at its lowest rate since 2006 (about $3700 for public four-year schools and about $15,000 for private four-year schools). Is it still a lot of money? Yep. But maybe it’s not as bad as you first thought. 

Even still, with prices as high as they are, wouldn’t it be better to just get a good job right out of high school? 

Maybe, but probably not.  

Despite these prices, college is still overwhelmingly a great investment for most students if they graduate. Average lifetime earnings for a college graduate are around $800,000-$1,000,000 higher for college grads than their peers who didn’t attend college. And that’s after accounting for loans. It’s definitely a worthwhile investment for those who make it to the finish line. 

What if I know some truly outstanding students who dream of going to an elite school like Harvard or Yale but don’t have the financial means to do so? Should I gently steer them toward a more affordable school?

Nah, they should go for it! (But, maybe suggest that they apply to another school too.) A good strategy for college searching is to put schools into 3 buckets:

  1. Safety – Where you’re almost sure to get accepted.
  2. Target – Where you’re right in line with the average applicant.
  3. Reach – Where you might have a slimmer chance of being accepted.

OK, but even if the student gets into an elite reach school, there’s no way they could afford it. 

You may be surprised. An elite school could be cheaper than a seemingly less expensive alternative school—

especially if the student’s family isn’t wealthy.

For high-achieving low- or moderate-income students, some of the most elite schools with the highest sticker prices are also the most affordable. Unfortunately, college pricing isn’t straightforward and popular ideas about sky-high prices deter some families from ever applying because they don’t think they could afford it. The irony is that the same families that would benefit most from that generosity are also less likely to know about it and can end up opting for more expensive alternatives with worse outcomes.  

Maybe college isn’t quite as expensive as I had thought it was, but it’s still more money than most of the families I know and work with can afford even if the student gets a job. So, what should they do? 

As state and federal funding for college has dried up, more people rely on loans to make it through college. 

Aren’t student loans dangerous? It feels like all I hear about student loans are horror stories about people with mountains of debt. Should I really be recommending that students or families borrow money for college?  

People with “mountains of debt” are not typical. More than half of all debt holders owe $20,000 or less. Just like the big sticker prices get in the way of the real picture of college cost, the idea of high-dollar debt holders muddles the picture of who owes money. Chances are, if you’ve attended enough schooling to rack up massive amounts in student loan debt, you probably have earned a degree and landed in a profession that allows you to pay down those loans responsibly. In fact, as the chart below shows, those with the highest amounts of student debt are most likely to make payments on time, and students with less debt are least likely to pay back loans.

Why are such small loans such a problem? 

The problem comes when a student over-borrows for an education that under-delivers. A few thousand dollars of debt might not seem so bad, but this relatively smaller sum is crushing if debt-holders never complete the degrees that would give them the means to pay back those loans—and almost half of college students don’t earn a bachelor’s degree. Add on top of that, the credit damage from loan payment delinquency and defaults on things like buying a house or car, and it’s easy to see how a burden of under ten or twenty thousand dollars leads to long-term financial troubles. 

But I heard the government is forgiving some student loans. Will that fix things? 

A return to better funding for public colleges like we had when my parents and other Boomers were going to school would be a better fix. Until then, loans are a necessary piece of the college affordability equation, but unfortunately our government has made a mess of that loan system with confusing processes and scant oversight on scammy, underperforming for-profits 

But forgiving $10,000 in student debt—and $20,000 for Pell Grant awardees—goes a long way to undo damages of a dysfunctional college funding and loan repayment system. Student loan forgiveness doesn’t fix our problems with college affordability, but it is a step toward justice for the government policies that created the mess in the first place. 

So, what now? What should I tell the potential college students that I interact with? 

Complete a FAFSA (Free Application for Federal Student Aid)! Federal grants make college more affordable for millions of students, but you can’t get the free money if you don’t apply. And lots of people who would get that money never apply. Last year’s graduating high school seniors left almost $4 BILLION in college grants on the table by not completing a FAFSA. It’s a critical tool to help close equity gaps in college attainment, and students often need a more knowledgeable grownup in their lives to point them in the right direction, Don’t let the potential college students in your life miss out on the opportunity to access grant money through FAFSA.