WHY IS COLLEGE SO &$!#% EXPENSIVE? What exactly are you paying for?

WHY IS COLLEGE SO &$!#% EXPENSIVE? What exactly are you paying for?

V. Peter Pitts, M.A.

Having children is expensive. Period. The average cost of raising a child from birth to age 18 in the U.S. is estimated at $300,000. Even daycare (when they are young) can cost $20,000 a year. Traveling hockey can run close to $20,000 too! So when it’s time for college, why are people shocked about the cost of college? It has never been inexpensive, and parents have always had almost 18 years to prepare and plan for this expense. Yes, at the elite, highly ranked colleges and universities, the cost is approaching $100,000/year (yikes!), but not all colleges cost this much. In fact, there are hundreds of colleges that cost a lot less, even for wealthier families (usually in the $6K-$35K range), due to need-based and/or non-need-based financial aid, including discounts that colleges call “merit scholarships.” These hundreds of colleges just don’t get the publicity or exposure that the highly ranked, popular elite colleges do.

So…What exactly are families paying for when they send their kids off to college? And what do their students receive from the investment?

I am known as “The Small College Guy.” I worked for 42 years in college admissions, working for small, private, residential, liberal arts colleges. So this essay is written entirely from a “small private college” perspective. Furthermore, it is written from the perspective of the hundreds of small colleges that might not be all that well-known but are still awesome and life-changing. Many of the concepts discussed in the essay apply to larger public universities as well.

Let’s look at the business side first. Smaller private colleges are “not for profit.” But they are also “not for loss.” Colleges and universities need to pay their bills just like any other business. This is where “setting their tuition” comes into play. To attract students, more and more smaller colleges, like the ones I worked for, are offering incentives (merit scholarships/grants). When they are setting their tuition costs, they have to do so realizing that they are only going to “take in” a portion of what the sticker price indicates. It is not an exact science, so awarding institutional merit aid is a bit of a balancing act. So, when you get your aid award and are tempted to ask for more money, please keep in mind that colleges are often “cutting it pretty close” and are not always able to give you more.

What you are paying for:

Professors/Faculty. This is not a small-ticket item. Eighty-five to ninety-five percent of smaller college professors have PhD degrees. The U.S. Bureau of Labor Statistics reports that the average salary of a university professor with a PhD is over $100,000 annually. Some professors get paid as much as $150,000. Smaller colleges are becoming more and more technologically advanced (adding majors in computer science, engineering, etc.) to remain competitive. To attract STEM professors, they have to pay higher salaries. On average, STEM professors receive higher salaries than non-STEM. STEM professors tend to earn between $80,000 and $150,000 while non-STEM professors earn between $70,000 and $120,000.

Administration and support staff (Admissions, Financial Aid, Student Affairs, Business Office, Career Planning and Placement, Counseling, Food Service, Bookstore, Maintenance) salaries average less than faculty salaries but still amount to a considerable investment. Customer service is of utmost importance in every business, and colleges are no exception. Parents need to know that their students are well taken care of when they are away from home. Parents also want answers to their questions and concerns. These are the departments that help parents navigate the entire process.

Low student to faculty ratio and small classes. Colleges need to hire enough professors to keep a low student/faculty ratio. You pay for this! But this is nothing new, right? From the time your children enroll in preschool to the day they graduate from high school, parents seek schools that have low student to teacher ratios. Schools advertise this as a selling point. This quest does not have to end at high school graduation. Smaller private colleges provide the attention that your children need and deserve (most having around a 12:1 ratio). Some of the elite, highly ranked private colleges have as low as a 6:1 ratio, which is one reason for their higher price tag.

Facilities (electronic classrooms, science labs, internet access, computer access, libraries, music rooms, theatres, building maintenance, food service, etc.) Thanks to generous donations from alumni and supporters, even the smallest private colleges usually have amazing facilities that compete with the bigger universities (especially science labs and athletic arenas), but the maintenance and upkeep of these facilities is pricey. At some (especially larger) universities, students are charged a small extra fee for the use of these, but at most small colleges, there is no extra fee for computer usage, lab facilities, internet, copies, and other miscellaneous expenses.

Housing and food expenses: Nationally, college housing averages about $1000/month. Food averages about $25 per day (3 meals). These costs vary widely. East and West Coast colleges tend to cost a lot more. The least expensive tend to be in the Midwest and the South. The overall average is about $13,000/year for room & board.

Remember: If a college, after merit aid, gets the cost down to $25,000 (which a lot of them do), please realize that $13,000 of this goes to repay its fixed costs for housing and food. Only $12,000 goes to helping the college pay its professors, staff, and other employees. Ninety percent (or more) of small colleges are not adding money to their endowments from the money that you pay. The exception might be the small percentage of heavily endowed, highly elite colleges that do not award merit aid.

Support [Learning Disability (mild), psychological/social work, advising, career counseling, tutoring]. Students who need support in any way can find it, at most, if not all, small college campuses, at no additional expense. This is a huge financial savings for families, not to mention a life-changing benefit to the students. Just imagine if you had to pay, outside of a college setting, for all of these. This is all included in the price you pay for tuition at most smaller colleges. Note: There are some extra fees for specialized help with more profound LD/Autism support services at colleges that offer such services.

Safety/Security facilities and staff: All parents want their sons and daughters to be safe. Colleges take this responsibility very seriously, hiring security guards, setting up alarm and security systems, and maintaining the security of the residence halls 24-7 is a costly but crucial expense.

What you are also paying for: life-changing and enriching OPPORTUNITIES

Colleges do so much more than just teach classes. They also provide a myriad of opportunities (leadership, fellowship, study abroad, internships, athletics, music, theatre), at little or no extra cost.

Athletic opportunities---Both of my sons were athletes in grade school, middle school, and high school. The amount of money we spent on travel soccer alone ran into the thousands. Once they got into college, no more paying for traveling soccer! Parents whose children are into dance, music, hockey, and other pursuits usually spend much less on these activities when their kids are in college than they did during their grade school and high school years.

Study Abroad opportunities---other than an occasional extra cost for airfare, college students are often able to travel to other countries for a semester or two without spending more than they would have spent on campus. Most colleges allow their financial aid to cover expenses in another country. The cost of studying in another country can be only a fraction of what they would have spent if they were not in college. Talk about a once-in-a-lifetime opportunity!

Music, Dance, Theatre, Art---the opportunity to display your art, to perform your art, and to participate in your art (at little or no extra expense) is a huge benefit at a smaller college. Other than small hourly extra costs for private music lessons, students spend a lot less to fully participate in the arts at a small college than they would away from college. They also have low-cost travel opportunities to perform in various places both throughout the United States and in other countries. Again, a truly life-changing and life-enriching opportunity.

Internships---Upon graduation from college, the single most powerful item on a student’s resume is EXPERIENCE. Virtually all colleges offer (and many smaller colleges require) internship opportunities. Many of these internships turn into job offers. Even if students do not accept these job offers, being able to add actual work experience to their resume is priceless.

Leadership Opportunities---Especially at the smaller colleges, a large percentage of students get an opportunity to be a resident assistant or head resident of a residence hall (or president/house manager of a fraternity or sorority). Not only does this provide students with some spending money, but it also gives them solid leadership resume content when looking for a job after college. Also, studies show that students who live on campus are more likely to attend class, reach out for help when needed, and be involved in campus activities.

Atmosphere. Residential college life gives students a lifetime of memories. There is something very “special” about the way you “feel” when living on a campus. These feelings, friendships, and lifetime memories are invaluable!

Soft Skill Development. Learning how to learn, learning to be independent, learning how to work in teams, learning how to work with other people, time management, and dozens of other soft skills are sharpened during the residential collegiate experience. These are all skills that employers actively seek.

Connections with faculty, staff, alumni, and fellow students are the icing on the cake. Job referrals and letters of recommendation help to ensure that a student has a lifetime of satisfying work. At most smaller colleges, assistance from the career/placement center does not stop when a student graduates. They will assist alumni for their entire lives.

Placement/ROI Most small colleges and universities have between 90 and 99 percent placement into work or graduate school within 6 months of graduation. Most parents don’t want their children to be living in their basements after college graduation, right? After all, the purpose of college is to prepare students to find their Ikigai (their life’s purpose), and placement into the world of work (or graduate school) is an important step in that process.

And of course…you get a diploma. Many jobs require a college diploma. This college degree opens the door to so many work opportunities! The “name of the college” sometimes makes a slight difference, but in most cases, the resume (telling what a student has actually accomplished) is much more important than the name of the institution.

Yes, the sticker price for most colleges and universities seems high, but more than half of all colleges offer deep discounts to keep the costs low for families. Most recent reports show that the average discount (at small colleges) is over 56% of the total tuition.

Whatever amount parents and students end up paying, if they take full advantage of what the college has to offer, they will look back on their college years and admit that it was well worth the investment---and students need to remember to thank their parents for making the sacrifices to help their dreams become a reality.