Money Matters

“Educators praise President Obama’s call for free tuition in community colleges, repeated during the State of the Union speech last week, but that focus on cost distracts from more serious problems.”

I read statements like these in the media all the time. They trouble me because they give readers the sense that the price of higher education is not an extremely serious problem.

Furthermore, they suggest that making college tuition-free will not go a long way towards helping students. While clearly factors other than price matter, and free college won’t solve every problem (to my knowledge, no one has ever suggested that it would), I believe it’s important to avoid downplaying the effects of price.

Researchers have studied the impacts of price on students for more than 40 years, and generally the results find that it matters. Even so, as I discuss in my forthcoming book, the way that they’ve studied the issue under-estimates just how much price matters. Here’s a brief explanation why:

To estimate the impact of price, you have to measure it accurately. Whether it’s the net price (cost of attendance minus grant aid) or the Expected Family Contribution, it’s usually mismeasured. Research I’ve conducted with the Wisconsin HOPE Lab finds that many colleges and universities list a price that is substantially lower than the actual price of attending college. I have a new paper that is coming out from the Century Foundation in three weeks called “The Real Price of College” that explains this in great detail. Also, even though many low-income students receive a “negative EFC” after completing the FAFSA, that negative number is truncated to zero. Both forms of mismeasurement can lead to under-estimates of the impact of price on educational decisions.

In addition, both of these official numbers — cost of attendance and EFC — aren’t good measures of how money affects college choices. Money has both monetary and non-monetary effects. Consider that the effects of being hungry and homeless in college are both about money and about stress and health. A lack of money means a student doesn’t have books, means that they work too much, and means that they are more likely to sleep through class — this makes them more likely to get poor grades, and have difficulty navigating the college and asking for help.

We know this more generally: scarcity affects decision-making. If students had more money, would they be better equipped to navigate other academic or social challenges? I’d say, probably so.

President Obama’s America’s College Promise — and even better, Senator Sander’s plan (or mine) — isn’t merely about tuition. By removing tuition as a cost, it allows students to apply their financial aid to address living costs. Moreover, it does away with many of the official pricing statistics that mislead us. I believe it takes price very seriously. But it also takes seriously the need to get community colleges the resources they need to help students succeed — it does this via direct funding to the colleges and accountability. It addresses the main reason community colleges are struggling today — state under-investment. These are issues that have been central to the Obama Administration for years, dating back to the American Graduation Initiative of 2009.

I understand that sentences like those at the start of this comment may feel minor when you read them, but I believe they contribute to a broader national media (and political) trend of downplaying the role that financial barriers play in college attainment. These are huge (yuuuge) issues, and those of us who study students and colleges up close know it.

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