Most students choose a college based in large part on what it’s going to cost them. So when the federal government started collecting and publishing average net prices by income group at individual institutions, consumer-information advocates cheered. People would be able to see which colleges were most affordable for families like theirs.
But as my colleague Soo Oh and I report here, the numbers don’t actually allow for good comparisons when it comes to wealthy colleges with generous need-based aid.
Those colleges tend to look at income in two ways that can produce very different numbers for the same family. And in reporting net-price data to the government, institutions are not all categorizing students in the same way. Some put them into income groups using the federal measure of income, while others use the institutional figure. So what looks like an apples-to-apples comparison of colleges’ affordability really isn’t. Read more about that here.
Now that the data exist, however, they cry out for such comparisons. One question that has emerged is how low-income students can possibly pay as much as they appear to be at some elite colleges. But the confusion about who goes in which category isn’t the only problem with the government’s net-price-by-income data. The averages by income group are based only on first-time, full-time freshmen who receive federal financial aid—grants, loans, or Work-Study. For public colleges, only in-state students are counted.
At many colleges, all of that provides a good representation of what students actually pay, at least for those who come in as freshmen and enroll full time.
But for elite colleges, the averages are less reliable. Smaller shares of students there receive federal aid, in part because many of them are from wealthy families. But others who might not get a cent of federal aid the colleges still consider needy. Even if those students get big price breaks from their institutions, they won’t show up in the data.
Now the averages should pull in most of the elite colleges’ low-income students, because they would qualify for federal Pell Grants. The data would not, however, include low-income international students who are getting institutional but not federal aid.
At higher income levels, the data are much less comprehensive. The only federal financial aid higher-income students usually get is student loans. Some wealthy colleges include loans in students’ financial-aid packages, but others don’t. Some students borrow; many do not. That means only a fraction of higher-income students are represented in the published net prices, which may or may not match the actual averages.
So what proportion of elite colleges’ student bodies are the government’s average prices based on? In other words, what share of students receive some form of federal financial aid?
The Chronicle calculated the percentage of first-time, full-time freshmen whose net prices count toward the government averages at each institution in the Top 25 Liberal-Arts Colleges and the Top 25 National Universities, as ranked by U.S. News & World Report (minus the military-service academies). Of the group, Grinnell College had the largest share of its freshman class represented: 62 percent. The share was smallest at Princeton University: 16 percent. When we averaged the percentages of all the colleges, it came to about 40 percent.
So even if all elite colleges categorized students into income groups in the same way, the government’s net-price data still wouldn’t give us a very good sense of what most of their students are paying.