How Transparency on College Costs Could Increase Diversity

Colleges and universities make applicants get admitted before quoting the price they would actually pay. Until recently, this was merely annoying.

Now, it’s glaringly counterproductive to the goal of enrolling freshman classes that look like America.

On Thursday, the Supreme Court ruled that Harvard University’s and the University of North Carolina’s consideration of students’ race when deciding whether to accept them was unconstitutional. That upends the work of administrators who want to admit a broad range of students, profoundly change their lives and then have them go out and change the world.

Maintaining diversity begins, in part, with schools not scaring away budget-conscious teenagers — many of whom come from low-income communities of color. And one excellent way to do that is to give people a binding price to attend before they go through the trouble of applying.

The lack of guaranteed upfront pricing is a bigger problem than many outside observers realize. The majority of families don’t pay full price for the live-on-campus college experience that millions of teenagers seek. That leaves them waiting for the big money reveal after an offer of admission arrives and colleges send out financial aid award letters.

To determine just how big any discounts might be, applicants must often engage in a monthslong awkward dance. First, apply to the admissions office. Then, if they think they might qualify for need-based aid, seek help from financial aid staff in a separate process.

If you do get in, the financial aid office tells you what it thinks you can afford and may offer so-called need-based aid. The admissions office may also decide what price cuts you deserve — a separate “merit” aid offer that can depend on your high school achievements but have nothing to do with your financial need. If you don’t like the price, you can appeal to one office or the other — or both for a bigger discount.

But even that unpleasantness only happens if you get the memo on how to perform this elaborate choreography. Given the high list prices — and the opacity of the price-setting algorithms that schools use or rent from outside consulting firms to determine the size of their discounts — untold numbers of people give up on higher education before applying for admission at all.

No application means no surprise and delight if your price, upon admission, is actually affordable. Everyone loses.

Legislators figured this out a while back and passed a law requiring every school to post what’s known as a net price calculator, or N.P.C. It gives estimates — but only estimates — of what families might pay.

N.P.C.s are better than nothing, but they can’t always handle complex cases; schools may not update them quickly enough when they change their aid formulas; they don’t always predict merit awards; and they can pose challenges to teenagers whose estranged parents won’t disclose financial data or don’t speak English well. More than one study has shown how far-off their estimates can be.

Colleges are aware of this problem, and for prized applicants, they will usually solve it. Athletes receive price quotes, and not just at the Division I level. Why shouldn’t children of immigrants from Somalia or India have the same privilege — or a first-generation student whose only parent is incarcerated?

Some schools give any applicant the white-glove treatment. Colleges like Whitman in Washington and College of Wooster in Ohio will give any interested students a pre-read — before they apply — to tell them how much aid they will receive if they do get in. Other schools probably do something like this. If that’s you, drop me a line; I’d love to hear more and maybe write about it.

There are at least three big challenges with guaranteed college pricing before sending an application. Family income can change a lot from year to year, which makes it harder for a school to guarantee a price — minus any need-based aid — for every year until graduation. Still, merit aid tends to persist, which helps with predicability. In any event, even a freshman-year price guarantee is much better than nothing.

The second challenge is a human resources one. While not every interested student would ask for an upfront price, there’s no way to know the volume of requests colleges would face until they try. Many schools hire a fleet of part-time readers each year to review applications for admission. Couldn’t they pull in qualified alumni to help with price quotes?

Then, there is risk. The most obvious way to guarantee price upfront is to improve the net price calculators or use other, better technology — and then have humans intervene on more complicated cases like ones involving divorced parents and small-business owners. Legislators are engaged in an ongoing effort to improve the calculators and make it possible to fill out a single, universal one instead of one for each school.

The resulting “You’d pay no more than” quote would cost schools money if they missed or misjudged assets that families could otherwise tap to pay more tuition. But schools with a reasonable amount of resources could probably bear that risk in exchange for a pipeline of diverse students.

The schools that offer upfront pricing will gain a competitive advantage. They will also be providing transparency for everyone for the first time — not just the teenagers who have had every advantage in their lives so far.

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