Planning for College: A Consumer Approach to the Higher Education
Marketplace
The College-Bound Decision Tree: A Consumer Approach
by
C. Anthony Broh
Broh Consulting Services, LLC
Consumer Approach
What is the price?
What is the risk?
How does it compare to others?
Consumer Approach
What is the price?
Published Price
Published Price and Net Price at Public and Private Four-year Institutions
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Con
stan
t (20
08) D
olla
rs
Published Price at Private 4-year Published Price at Public 4-year Net Price at Private 4-year Net Price at Public 4-year
$22,260
$35,640
$17,450
$21,200
Net Price
Published Price and Net Price at Public and Private Four-year Institutions
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Con
stan
t (20
08) D
olla
rs
Published Price at Private 4-year Published Price at Public 4-year Net Price at Private 4-year Net Price at Public 4-year
$8,380$7,120
$9,860
$15,210
Consumer Approach
What is the risk?
Paying for College
Child Parent Other
Past Savings and Assets
Assets, Savings and 529Other Investments Grandparent 529
Present
Summer wages and job earningsFederal Work Study ProgramState Work Study Program
Institutional Work Study ProgramOutside Scholarships
Taxed & Untaxed Parent IncomeEmployer Benefit Program Grandparent 401(k) minimum
distribution
Future
Unsubsidized Stafford LoanState Unsubsidized Loan Program
Institutional Student LoanPrivate Student Loans
Credit Card DebtSubsidized Stafford Loan
Perkins LoanSubsidized State Loan
Institutional Loan Program
PLUS LoanHome Equity Loan
Other Private Loans
Family
Res
ourc
es
The “Price” Includes Interest Payments
Amount of Interest Paid for 15-Year $20,000 Loan withFees and Interest Rates from College Loan Programs
$0 $5 $10 $15 $20 $25 $30 $35 $40
Private, Alternative, or DTC Loan, Private
Private, Alternative, or DTC Loan, Credit Union
Home Equity Line of Credit
Unsecured Private Loan
Home Equity
MEFA, deferred payment
MEFA, immediate payments
PLUS
Unsubsidized Stafford
Subsidized Stafford
College Loan
Perkins
Massachusetts NIL
Thousands of Dollars
After Fed & MA Taxes
Before Fed & MA Taxes
Variable Rate
Fixed RateFor Students from
Low Income Families
Policy Implications
Use “Net Price” as central concept of financial aid.
Describe Parent Loans, Student Loans, and Private Loans together with consumer information: APR, Total Interest, Monthly Payments.
College Financial Aid offices to take pro-active role in family financial planning.
Consumer Approach
How does it Compare to Others?
Mental Calculation
Educational Attribute of Value
Net Price
Selected Quantifiable Attributes
Students with SAT-Reading of 600 or higher Students with SAT-Math of 600 or higher Budgeted dollars on Instruction Probability of Graduating in four years Faculty-student ratio
(Only data from public sources)
SAT-Reading 600+ per Dollar of Net PriceSAT-Verbal above 600 per Dollar of Expected Net Price
Westfield
Fitchburg
Umass Dartmouth
Worcester
Salem
Framingham
Bridgewater
Bentley
Umass Boston
Boston University
Umass Lowell
Clark
Emerson
Boston College
Smith
Tufts
Holy Cross
Brandeis
Wellesley
Umass Amherst
Amherst
Williams
MIT
Harvard
SAT-Quant. 600+ per Dollar of Net Price
SAT-Math above 600 per Dollar of Expected Net Price
Salem
Fitchburg
Westfield
Bridgewater
Framingham
Emerson
Umass Dartmouth
Umass Boston
Worcester
Clark
Umass Lowell
Boston University
Boston College
Bentley
Tufts
Smith
Holy Cross
Brandeis
Wellesley
Williams
Amherst
MIT
Umass Amherst
Harvard
Instructional Expenditures per Dollar of Net Price
Instructional Expenditures per Dollar of Expected Net Price
Emerson
Bentley
Clark
Holy Cross
Framingham
Boston College
Fitchburg
Tufts
Westfield
Bridgewater
Brandeis
Umass Dartmouth
Smith
Salem
Worcester
Boston University
Umass Amherst
Umass Boston
Umass Lowell
Amherst
Wellesley
Williams
Harvard
MIT
Graduation Rate per Dollar of Net Price
Graduation Rate per Dollar of Expected Net Price
Umass Boston
Salem
Worcester
Umass Dartmouth
Boston University
Emerson
Bentley
Bridgewater
Tufts
Boston College
Fitchburg
Framingham
Clark
Smith
Brandeis
Umass Lowell
Holy Cross
Wellesley
MIT
Amherst
Williams
Umass Amherst
Harvard
Westfield
Faculty-student Ratioper Dollar of Net Price
Faculty-Student Ratio per Dollar of Expected Net Price
Boston University
Boston College
Emerson
Bentley
Holy Cross
Smith
Brandeis
Clark
Tufts
Umass Dartmouth
Umass Amherst
Wellesley
Amherst
Umass Boston
Williams
MIT
Westfield
Bridgewater
Fitchburg
Harvard
Framingham
Umass Lowell
Worcester
Salem
Policy Implications
Use “Educational Attribute” as central concept of college choice.
Provide information about educational attributes so families can make mental calculation of institutional strength and weakness.
College Admissions and Financial Aid offices take pro-active role in helping families decide want they want from college.
C. Anthony BrohBroh Consulting Services, LLC
Dana Anselco-author
Planning for College: A Consumer Approach to the Higher Education
Marketplace
Thank You!
C. Anthony BrohBroh Consulting Services, LLC
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