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Looking at the competition: A comparison of Net Price Calculators from student’s view. #admissions #emchat #highered #financialaid

Since the federally mandated introduction of the net price calculator (NPC) in October of 2011, I’ve been curious to know what kinds of results students would get if they completed our calculator and those from some of our competitors.

I’ve been curious to know if the NPC results in a clearer “apples to apples” comparison of cost.

I’ve been curious to see how other colleges present information to students.

I’ve been curious to better understand the impressions about affordability and value with which a student might be left after completing ours and a competitor’s.

I’ve been curious to know how we stack up against flagship universities and other private colleges.

Lots of curiosity on my part, but no action…until now.

Over the recent holiday break, I asked one of our student ambassadors, assisted by the Office of Institutional Research and Assessment, to undertake a project to complete our net price calculator and NPCs from some of our top competitors. To initiate the project, I developed an archetype academic profile and worked with the Office of Financial Assistance to develop four different financial backgrounds to use in our experiment (these profiles are listed below). After developing the profiles for our students, we developed a list of competitor schools based on data from the National Clearinghouse and those schools with which we overlap most frequently.

My initial list included 10 colleges (Bradley University, DePaul University, Elmhurst College, University of Iowa, Illinois Wesleyan University, Loyola University, Marquette University, North Central College, Northern Illinois University, and University of Illinois–Champaign-Urbana). When I asked my colleagues in Institutional Research and Assessment to look at my initial findings, they thought it would be good to add Gustavus Adolphus College (peer), Loras College (regional competition), Luther College (peer), Monmouth College (regional competition) and Northwestern University (competition for highest-achieving students).

 

Academic Profile

ACT: 25; Class Rank: top 20%;

and, G.P.A. 3.2

Student 1: $75,000 household income, family of 3, 1 in college, assets $5,000

Parents’ marital status: Married

State of residence: CO

Family size: 3

Number in college: 1

Parents’ income: $69,662

Parents’ income taxes paid: $4,376

Parent 1 income earned: $56,800

Parent 2 does not work

Parents’ untaxed income: $5,000

Parents’ assets: $5,000

Student income: $2,850

Student income taxes paid: $0

Student untaxed income: $0

Student assets: 160

 

Student 2: $120,000 household income, family of 4, 1 in college, assets $10,000

Parents’ marital status: Married

State of Residence: IL

Family size: 4

Number in college: 1 

Parents’ income: $108,084

Parents’ income taxes paid: $10,041

Parent 1 income earned: $89,792

Parent 2 income earned: $7,154

Parents’ untaxed income: $9,855

Parents’ assets: $10,000

Student income: 1,340

Student income taxes paid: $0

Student untaxed income: $0

Student assets: $2,300

 

Student 3: $200,000 household income, family of 5, 2 in college, assets $20,000

Parents’ marital status: Married

State of Residence: IL

Family size: 5

Number in college: 2 

Parents’ income: $179,670

Parents’ income taxes paid: $23,676

Parent 1 income earned: $175,480

Parent 2 does not work

Parents’ untaxed income: $17,000

Parents’ assets: $20,000

Student income: $3,000

Student income taxes paid: $0

Student untaxed income: $0

Student assets: $8,000

 

Student 4: $45,000 household income, family of 4, 1 in college, assets $0

Parents’ marital status: Divorced/Single

State of Residence: IL

Family size: 4

Number in college: 1 

Parents’ income: $46,230

Parents’ income taxes paid: $183

Parents’ income earned: $47,900

Parents’ untaxed income: $0

Parents’ assets: $0

Student income: $1,000

Student income taxes paid: $0

Student untaxed income: $0

Student assets: $200 

* We also made the oldest parent 55, since it was a question asked by a couple of institutions.

 

So, what did we find?

Before I get to the results, and try to make some sense of it all, I thought the following observations might be of interest.

It will cost you nothing to attend: A couple of the college’s NPCs include the Parent PLUS loan in calculating the out-of-pocket cost for students. This is an interesting technique. The “estimated net price” is clearly outlined, but when the PLUS loan is included under the guise of “eligibility for other aid programs” it can make the out-of-pocket cost appear to be $0.

Indirect costs are wildly different: Indirect costs, which include things like books, personal expenses, and transportation, are considered in calculating the amount of financial need a family has, and therefore indirect costs have a direct relationship to demonstrated financial need. What I found surprising is the dramatic range in indirect costs, which varied on the high end from $4,600 (regional public) to the low end of $2,400 (private, national liberal arts college). The wild variation seemed odd to me.

Work Study is applied inconsistently and amounts vary: The amount of Work Study availability varied from $1,200 to $2,500 for the same student with the same need levels. Furthermore, there were a number of NPCs that include Work Study as a resource used to reduce the cost to attend. This is an interesting technique because it, of course, lowers the cost to attend. But, Work Study earnings are seldom used to pay a student’s bill.

Some colleges offer very broad ranges: A small number of colleges offer ranges of need-based grants, rather than a specific level of grant support. I certainly understand this from an enrollment management perspective (you don’t want to promise something you can’t deliver), but the practice makes the NPCs almost useless, given the range offered can vary from $2,000 to $8,000.

The results are damn confusing: NPCs are anything but clear in presentation and results. In fact, they are terribly confusing even for someone who knows his way around this stuff. One college’s results were so crazy that we sent an anonymous email seeking clarification. The response we received directed us to yet a different calculator housed on the business office’s website. A further complication is that there is no easy way to find NPCs on most college websites—some are hidden deep within the structure and others are right up front. We ended up Googling Net Price Calculator + (college name) to make it easy. I hope that’s what families are doing.

If you’ve made it this far, you may want to know what we found out about Augustana and whether there are any general tends to which I can point?

With the help of the Office of Institutional Research and Assessment, and in an effort to try to compare apples to apples, rather than apples to basketballs, we “standardized” the results to determine net cost by looking at direct cost minus estimated grant aid and the Federal Stafford Loan. We left out PLUS, Work Study in order to try to assess how we stack up. Here’s what we found.

 

In short, here’s what was discovered:

 

 

Direct Cost

Student 1

Net Price

Student 2

Net Price

Student 3

Net Price

Student 4

Net Price

Mean

43,246

22,249

27,048

27,552

16,471

Median

43,161

20,784

25,944

27,119

15,060

Augustana

44,938

19, 338

24,638

24,638

13,438

Augie Difference from Median

1,777

-1,446

-1,306

-2,481

-1,622

 

Of the 16 schools we considered, Augustana’s direct cost is $1,692 above the mean and $1,777

above the median. However, after considering the scholarships and grants and $5,500 in

Stafford loans, Augustana is below both the mean and the median for each of the four students. 

Augie is more than $5,000 less than five other schools on the list for each student profile. 

The move from direct cost to net price is about a $3,500 jump for Augie.

 

 
 
 
 

Now I don’t know exactly what this means. My initial thought was; hey, that looks pretty good for us. I mean, our price is more than the mean, but our cost is less. And, in most cases, if we less expensive or perceived as a better value, I am perfectly comfortable making the case for the cost differential. However, I suspect the results are more nuanced.

Are we offering too much financial aid? Are we a better value? Do we make a more substantial investment in students?

I need to look deeper at all of these questions, but in the meantime, if you want to know how Augustana stacks up against these colleges for our archetype students, you will find the results below.

 

School

Student 1 – 75k CO

Student 1

Difference from Augie

Student 1

Augustana

19,338

24,838

 

Bradley

18,514

24,014

-824

DePaul#

30,392

35,892

11,054

Elmhurst

20,300

25,800

962

Gustavus Adolphus

20,885

26,385

1,547

Iowa

34,061

39,561

14,723

IWU

21,702

27,202

2,364

Loras

20,682

26,182

1,344

Loyola

29,130

34,630

9,792

Luther

21,847

27,347

2,509

Marquette

28,198

33,698

8,860

Monmouth

16,529

22,029

-2,809

NCC

15,869

21,369

-3,469

NIU

3,226

8,726

-16,112

Northwestern*

16,213

21,713

-3,125

U of I

39,105

44,605

19,767

 

School

Student 2 – 120k IL

Student 2

Difference from Augie Student 2

Augustana

24,638

30,138

 

Bradley

29,714

35,214

5,076

DePaul#

36,392

41,892

11,754

Elmhurst

23,900

29,400

-738

Gustavus Adolphus

28,894

34,394

4,256

Iowa

34,061

39,561

9,423

IWU

24,152

29,652

-486

Loras

24,132

29,632

-506

Loyola

31,250

36,750

6,612

Luther

25,695

31,195

1,057

Marquette

30,018

35,518

5,380

Monmouth

22,550

28,050

-2,088

NCC

21,069

26,569

-3,569

NIU

21,092

26,592

-3,546

Northwestern*

26,193

31,693

1,555

U of I

29,014

34,514

4,376

 

School

Student 3 – 200k IL

Student 3

Difference from Augie Student 3

Augustana

24,638

30,138

 

Bradley

24,514

30,014

-124

DePaul#

36,692

42,192

12,054

Elmhurst

25,600

31,100

962

Gustavus Adolphus

30,679

36,179

6,041

Iowa

34,601

40,101

9,963

IWU

29,102

34,602

4,464

Loras

24,882

30,382

244

Loyola

31,250

36,750

6,612

Luther

25,695

31,195

1,057

Marquette

31,018

36,518

6,380

Monmouth

22,550

28,050

-2,088

NCC

22,969

28,469

-1,669

NIU

19,092

24,592

-5,546

Northwestern*

28,543

34,043

3,905

U of I

29,014

34,514

4,376

 

School

Student 4  – 45k IL

Student 4

Difference from Augie Student 4

Augustana

13,438

18,938

 

Bradley

17,014

22,514

3,576

DePaul#

25,461

30,961

12,023

Elmhurst

9,510

15,010

-3,928

Gustavus Adolphus

13,648

19,148

210

Iowa

30,066

35,566

16,628

IWU

16,657

22,157

3,219

Loras

19,882

25,382

6,444

Loyola

23,235

28,735

9,797

Luther

15,167

20,667

1,729

Marquette

22,823

28,323

9,385

Monmouth

8,735

14,235

-4,703

NCC

13,854

19,354

416

NIU

14,953

20,453

1,515

Northwestern*

4,548

10,048

-8,890

U of I

14,538

20,038

1,100

 

 

*Archetype student unlikely to be admitted. This may be the case for other colleges in the comparison group, too.

#An average of the grant range provided by the NPC was used to come up with a grant value.

I am not sure that any of the results are earth-shattering, but they are interesting.

What do you think about all of this? Are you aware of other efforts to compare NPCs results?

If you are an enrollment professional, you might try this out on your own to see what a family might see at your institution and at your competition.

W. Kent Barnds a.k.a. @bowtieadmission

JC Penney, college costs and real pricing: Are there lessons? #highered #admission #emchat

I spend an inordinate amount of time thinking about the price and cost of higher education. In my 20+ year of working in enrollment I’ve listened to hundreds, if not thousands, of people sound the alarm about “spiraling costs” and politely (more appropriately, naively) recommend that in order to slow discount rates (a phrase I just hate), colleges must reduce their price to be more aligned with what the cost to attend really is after financial aid is applied.

If I’ve heard it once I’ve heard it one thousand times, “if you just charge what you actually net,” all of the college’s problem will be solved and families will be more inclined to enroll.”

I mean isn’t this exactly why the feds pushed for the Net Price Calculator? If families just know what the real cost is… And, with increased chatter about “affordability” and The College Scorecard the calls for real pricing are likely to stronger than ever before. And, the urges to study it further will be attractive.

I, myself, spent time recently contemplating what real pricing might look like in higher ed and at my institution and have some ideas about how it might work. (I will share that in a future post).

For now, though, for all of those who want real pricing in higher education, I hope you are paying attention to what has and is happening to JC Penney.

JC Penney’s multiyear turnaround, which heretofore has revolved around an ill-defined (and probably ill-conceived) plan to charge real prices for the goods they sell looks like it is a disaster. JC Penney’s “no sale” strategy, which was built around dropping prices does not appear to be working within a marketplace that values bargains and really likes sales.

Could JC Penney experience shed any light on why more colleges and universities have not followed a similar path to offer a real price?

I think it does.

I think the JC Penney’s mess forces important questions about a stakeholder’s interest in and understanding of real price.

JC Penney believed that real pricing would be welcomed by their customers. However, early evidence suggests otherwise and as of late-January of 2013 they’ve abandoned the “no sale” approach.

I recently read a wonderful piece in Forbes written by Jonathan Salem Baskin, which dissects the JC Penney debacle and offer some things for the real price advocate in higher education to consider. You can read the full article here.

Baskin identifies the following problems, which I believe would be similar problems for colleges that adopt a real price strategy:

  • The pricing plan was never explained or substantiated.
  • Nobody knows what the real price should be at any store, not just Penney’s, which means there’s always going to be a suspicion or expectation that they can (or should) go lower.
  • The no sale strategy was opaque on its fundamental issue when it could have established a new approach…

(The phrases above  are taken directly from Baskin’s piece)

Baskin nails it! He offers some excellent cautions for colleges that might be seriously considering some sort of real price strategy. I fear college would struggle mightily with explaining a new pricing plan. I am skeptical about the public’s understanding of true costs.  And, higher ed. and opaque are too comfortable with one another. Are there ways colleges could avoid the same mistakes and move beyond the gimmickry that defines most price adjustments or freezes?

Baskin does not get into why people want a bargain, but there are plenty of behavioral economists who can opine on this matter. And, nearly every enrollment manager I know can tell you that students and families really value a scholarship or grant—otherwise knows as a “discount.” For more on this, pick up Robert Reich’sThe future of success” in which he has an excellent chapter on “The age of the terrific deal.” It become pretty apparent, quickly, why we’ve been conditioned to value a deal, a discount and a door-busting sale…and, why when we don’t find one, we jump ship.

So-called real pricing in higher education, while on the surface sounds really good, is likely to go the way the “no sale” strategy that JC Penney just abandoned.

Please let me know if you have feedback or ideas about real pricing in higher education.

W. Kent Barnds a.k.a. @bowtieadmission

New Blog Post: NPC calculator inches closer #highered, #admissions

Yesterday we had a great meeting between admissions, financial assistance and communications & marketing about the final steps in launching our Net Price Calculator. We spent nearly and hour thinking like families, rather than like college administrators (we have an advantage with three parents hot off the college search) and came up with what I think is a great thank you we will direct at families who complete out Net Price Calculator.

What do you think about this?

“We recognize that your response to these initial results might be hope, excitement, resignation or even defeat. To clarify and complete your understanding of the NPC results, please call Augustana’s admissions office and arrange for your visit. You might bring a copy of your NPC result to add to your conversation here on campus.”

I think this thank you is respectful and acknowledges that the students will have very different reactions to the NPC and we better be ready to respond to all of them. But, the most important thing it does is invite the student into a conversation about with us.

We will fail if we allow the NPC to replace face-to-face conversation about the value of higher education. We have a responsibility to “clarify and complete the understanding” of these results.

Let me know your thoughts and what you are doing.

Kent Barnds a.k.a. @bowtieadmission

P.S. Stay tuned for some drawbacks and benefits of the NPC.

Summer visit days and a glimpse of the Class of 2016 and all that could go wrong

This week at Augustana College we are hosting a week of campus visit days. Each day of the week features different academic programs and disciplines and provides our visitors with an idea of what Augustana has to offer them should they choose to apply and enroll. For me, summer visit days are an eye-opener reinforcing the reality that the Class of 2015 is behind us and the work on next year’s group must begin in earnest.

It is this time of year that I begin to wonder what the next recruitment cycle will bring for Augustana and for the admissions profession as a whole? I find myself asking many questions.  These are a few questions on my mind on hump-day of a week of campus visits?

How long will prospects continue to buy in to our philosophy that it takes more than one campus visit to get to know a college? Will their patience last through an open house, followed by and interview and an overnight visit? Will family finances continue to support robust visitation before a student applies? (more…)