When it comes to predicting how much you’ll pay for college, you might as well consult your local fortuneteller or learn to read tea leaves. College promotional booklets publish sticker prices, which most students don’t pay. Financial aid letters rarely spell out how aid will change over four years or translate into monthly loan payments after graduation. Meanwhile, the price of college keeps rising, and student-loan default rates remain worrisome. To address the challenge of finding an affordable college education, politicians and educators are launching tools to shed light on the murky process.
One of the newest is the Department of Education’s College Scorecard . The Scorecard is a sleek, interactive site where you can search by state, school size and campus setting, among other criteria, to find potential schools.
See Our Slide Show: 10 Best Public Colleges With Lowest Debt at Graduation
Each college has its own page with five measurements of affordability and quality, including net cost (after grants and scholarships), graduation rate, loan-default rate and median amount borrowed. (The fifth measure, data on post-college employment, is slated to be added. Arkansas, Tennessee and Virginia already provide employment information for their grads.) A graphics-rich design is a student-friendly improvement over previous text-heavy federal tools. Meters and charts show how each school compares with its peers, and embedded links lead to net-price calculators on each school’s Web site.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
College administrators are also trying to make the cost of attendance more transparent. The University of Dayton, for example, has announced that next year’s incoming freshmen will receive a two-page “prospectus” detailing their billable expenses over four years, plus a pledge that aid will increase in line with tuition. In a pilot program launched this school year, the State University of New York system has adopted the standardized financial aid shopping sheet, developed by the Department of Education and the Consumer Financial Protection Bureau, and beefed up loan-counseling services at six campuses.
Price transparency is an increasingly popular notion in higher-ed circles, but experts say the current suite of tools needs tweaking before students get a truly clear picture. For instance, loan-default rates on the College Scorecard don’t mean much without knowing the percentage of students who borrow. And more schools would have to adopt Dayton’s prospectus model for it to become useful in weighing one offer against another. For now, the financial aid shopping sheet, which has been adopted by more than 600 schools nationwide, will go a long way toward helping students make apples-to-apples comparisons.
Another challenge for guidance counselors and parents is getting students to pay more attention to costs early on. Only 35% of prospective students used an online net-price calculator during their college search, reports a 2012 College Board study.
Kiplinger’s has always focused on value as well as quality when evaluating colleges, using data such as financial aid, graduation rates and average debt upon graduation to determine our college rankings.
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us?A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
New Ways to Use 529 PlansTax-free withdrawals from 529 plans could help you sharpen your job skills.
-
I Want to Help Pay for My Grandkids' College. Should I Make a Lump-Sum 529 Plan Contribution or Spread Funds out Through the Years?We asked a college savings professional and a financial planning expert for their advice.
-
Ask the Editor, September 12: Tax Questions on 529 Plan Rollovers to a Roth IRAAsk the Editor In this week's Ask the Editor Q&A, we answer four questions from readers on transferring 529 plan money to a Roth IRA.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
-
How Intrafamily Loans Can Bridge the Education Funding GapTo avoid triggering federal gift taxes, a family member can lend a student money for education at IRS-set interest rates. Here's what to keep in mind.
-
How an Irrevocable Trust Could Pay for EducationAn education trust can be set up for one person or multiple people, and the trust maker decides how the money should be used and at what age.
-
UTMA: A Flexible Alternative for Education Expenses and MoreThis custodial account can be used to pay for anything once the beneficiary is considered an adult in their state. There are some considerations, though.
