Affluent families, who can afford to send their children anywhere to college, are becoming more discriminating. Some are questioning whether a private college that costs $50,000 or more is really worth the price.
That’s one of the take-home messages of a podcast that I listened to recently on The Chronicle of Higher Education’s website. The newspaper interviewed John T. Lawlor, who is the founder of The Lawlor Group in Minneapolis, a higher-ed consulting firm, which keeps abreast of higher-ed trends.
You can find the podcast and article here:
Some well-off parents are deciding that prestige isn’t worth the high price, Lawlor observed. Instead of paying $50,000+ for the most highly ranked schools, families are “buying down.” That is, they are choosing schools that will give their teenagers discounts. I think that these schools, which are lower down on the academic food chain, will often provide an equal or better education than the biggest name institutions.
“What people are doing is comparing the net cost and saying, ‘I think this might be a less prestigious school – might be just as good at education – but it’s $10,000 less,” Lawlor observed.
Nearly all private colleges and universities give discounts to affluent students, but the Ivy League schools don’t. Neither do the schools with the highest US News college rankings. If you draw a line at roughly that first 15 schools on US News‘ list of the top national universities, you’ll find the universities that don’t provide merit aid to affluent students.
It’s my opinion that the reason why these institutions, along with a few elite liberal arts colleges, don’t give merit aid is because they don’t have to — enough wealthy parents are willing to write checks totaling more than $250,000 without hyperventilating.
Becoming Discriminating Shoppers
In this market, families aren’t just scrutinizing price, Lawlor says. They are also more likely to ask about four-year grad rates, as well as what kind of prospects for jobs and grad schools a college provides its graduates.
Regardless of your economic status, Lawlor noted that it’s a good sign that families are becoming more discriminating. He believes that it’s forcing schools to be more accountable. And that will be good for everybody.