A Majority of Students Look at a
College’s Sticker Price Without Taking
Financial Aid into Consideration
Making the Case for Accessibility, Simplicity and Clarity in College Cost Information
Use of Net Price Calculators (NPCs) has increased significantly over the last year, but a majority of students continue to consider college costs based on the total sticker price without taking financial aid into account. The findings reported in this issue of studentPOLL mirror those reported in our 2011 study on college costs, affordability, and financial aid. Among the major findings reported in this issue of studentPOLL:
- More than half of students (54 percent) indicated they looked at college costs based on the total cost of attendance without taking financial aid into account. In fact, only 17 percent reported looking at the net cost after subtracting what they would likely receive in financial aid.
- Behavior regarding Early Decision and Early Action admissions is not contingent on income or race. Across all races, incomes, and academic abilities, a majority or near majority of students intended to apply early.
- Students appear to have a sense of entitlement about receiving merit aid. More than three-quarters of respondents indicated they expect to receive some form of merit aid based on their academic achievements, athletics, or other accomplishments.
- An overwhelming majority of students reported that they will stretch financially for schools that they consider too expensive because these schools offer certain qualities they value. Among these attributes: strong academics in a student’s field of interest; a prestigious academic reputation; an environment where a student can fit in and feel comfortable; and an excellent record of helping graduates get into graduate or professional school or get a good job.
- Student and parent use of Net Price Calculators (NPCs) has grown significantly over the past year. In 2011, for example, about one quarter of students indicated that they had used an “online financial aid or net tuition calculators on the web sites of individual colleges” compared to 44 percent this year. Similarly, in 2011, 12 percent reported using “online financial aid calculators on U.S. government web sites” compared to 26 percent this year.
- Despite modest signs of the nation’s economic recovery, families continue to face a considerable challenge in paying for college. About one-fifth of students surveyed are not sure how their families will afford college, but think they’ll work it out when the time comes and another 16 percent do not think their family can afford college, but say they’ll try.
Other findings in this issue of studentPOLL, thankfully, suggest that more students from lower- and middle-income families — those who most need college cost information — are taking advantage of the many financial aid information resources offered online, in print, and through other avenues to better understand college affordability and how to finance a college education. In particular, a sizable proportion of low-income (less than $60K) and middle-income students ($60K to $100K) indicated that they participated in financial aid workshops at colleges or high school, used online financial aid calculators on US government web sites, and used The College Board site.
The finding about students’ high expectation for merit aid suggests that institutions may want to more closely examine their merit aid strategies over the long term. With almost 40 percent of students reporting that they expect to receive merit aid based on their “other achievements, not academics,” it seems that the expectation of receiving merit aid has become the norm, placing further competitive financial pressures on already-stretched institutional resources.
While these findings on the whole suggest that institutions are making progress in providing better and easier ways for parents and students to access and understand price and aid information and determine how they factor into their own college decisions, there is still room for improvement. Evidence from major tuition pricing studies A&S has conducted for its clients provides further evidence that if students have accurate knowledge of an institution’s price and their likely aid award, conversion rates and yield frequently increase. In short, an institution’s enrollment and financial self-interest is well served by a strategy of accessibility, clarity, and simplicity in communicating cost and aid information.
Study Findings [top]
1. A majority of students applied or planned to apply to college using Early Action or Early Decision across all races, incomes, and academic abilities.
Given the timing of the survey (mid-November to mid-December 2012), it’s not surprising that an overwhelming proportion of respondents had already applied to four-year institutions. Specifically, studentPOLL found that on average students had applied to 4.8 schools with 30 percent of students reporting they had applied to 1 or 2 schools, 30 percent to 3 or 4 schools, 33 percent to 5 to 9 schools, and 8 percent to 10 or more schools.
We then asked students if they had or planned to apply to college through an early decision program. We found that 54 percent of respondents had either applied or planned to apply to a college through an Early Action or Early Decision I or II program (comparable to the 52 percent of respondents in our 2011 survey who applied using an early decision program.)
While 63 percent of high-income students (those with family incomes above $100K) planned to apply through an early decision program, 47 percent of lower-income students (family incomes of less than $60K) also reported their intention to do so. It appears that despite the conventional wisdom that lower-income students typically apply through a regular decision program in order to evaluate all financial aid offers, many are opting to apply early.
Another noteworthy subgroup finding by race: 59 percent of Caucasian and 57 percent of Asian students planned to apply to at least one college through Early Action or Early Decision I or II compared to 41 percent of Hispanic students.
2. More than half of students indicated looking at the total cost of attending a school without taking into account their likely financial aid award.
Similar to the findings of our previous studentPOLL study, students were asked a series of questions about college costs and the extent to which they had discussed college affordability with their parents including whether they had ruled out applying to or attending an institution because of the cost.
Among all respondents, 30 percent indicated they and their parents had “ruled out applying to or attending a school because of cost,” another 48 percent indicated their parents “insisted you apply to schools that are more affordable,” and 27 percent indicated that their parents had “insisted you attend a specific school or schools that is/are most affordable.”
We then asked students to select the statement that best described how they looked at the cost of attending a specific college or university. While we found three-quarters of respondents had discussed the cost of colleges and what their family could afford, 54 percent indicated they had considered the total cost of a specific college without taking into consideration the financial aid award they would likely receive from a given college. Only 17 percent reported looking at the cost per year “…after subtracting what you think you might receive in financial aid,” and another 12 percent reported that they “used a net price calculator to estimate net price” as the statement best describing how they looked at the cost of attending a specific college of university.
By SAT subgroup, 26 percent of students with the highest scores (1300+) were more likely to indicate that they looked at a college’s net cost “…subtracting what you think you might receiving in financial aid” as the statement best describing how they considered college costs versus 15 percent of those with mid-range SAT scores (1100 to 1290), and 13 percent of students with the lowest SAT scores (less than 1100).
3. Almost universally students plan to apply for financial aid to help pay for college. In fact, across all income levels and academic qualifications, a high proportion of students think they are likely to receive some form of merit aid.
studentPOLL asked students a series of questions concerning financial aid including whether they planned to apply for aid and what type of financial aid they expect to receive in the form of merit- or need-based aid.
Almost universally (90%) students across all racial, income, and academic subgroups indicated they plan to apply for financial aid — about the same proportion who responded affirmatively in studentPOLL’s 2011 survey. By income subgroups, 97 percent of students respectively in the lowest- and middle-income groups (less than $60K and $60K to $100K) plan to apply for financial aid versus 78 percent of students with the highest incomes (above $100K).
As we found in our previous two cycles of research on college costs and affordability, a high proportion of students across all academic ability levels expect to receive financial aid based on their “academic, athletic or other achievements.”
We asked students whether they thought they would receive financial aid from colleges based on family income or need, academic achievements, athletics, or other achievements (not based on academics) and accepted multiple responses. Nearly three-quarters (72%) thought they would receive financial aid based on their academic achievements. Similarly, 62 percent of students thought they would receive aid based on family income and 11 percent based on their athletic accomplishments. Another 39 percent indicated they thought they would receive financial aid based on “other achievements (not based on academics).” In fact, the proportion of students who thought they would receive a form of merit aid based on “other achievements” was even higher this year, suggesting that students and families continue to have a sense of entitlement when it comes to merit-based financial aid. Moreover, students with the lowest- and middle-range SAT scores (41% and 45% respectively) were more likely to say that they would receive aid for “other achievements (not based on academics)” compared to those with the highest SAT scores (30%).
4. Students are willing to stretch financially for schools they consider too expensive because they offer certain highly valued qualities.
In line with the findings of studentPOLL’s 2010 and 2011 studies, students are willing to stretch financially for schools they would otherwise rule out as too expensive if they strongly value qualities the school offers.
For example, this year 65 percent of respondents indicated that they were considering a school they viewed as too expensive because “…it has an excellent record of helping graduates get into graduate or professional schools or get a good job” compared to 60 percent last year which is a significant difference. In 2011, 74 percent of respondents were willing to consider a school they viewed as too expensive because it “…has really strong academics in your field of interest” compared to 79 percent this year.
Noteworthy subgroup findings:
- Forty-nine percent of students from high-income families answered “no” in terms of financially stretching for a school that “…has an active, vibrant social life” compared to 34 percent of students from low-income and 35 percent of those from middle-income families.
- Twenty-eight percent of students with the highest SAT scores are more likely to answer “no” in terms of stretching financially for a school that “…is a place where you will fit in and feel comfortable” compared to 17 percent of students with the lowest SAT scores.
- Nearly three-quarters of students with the highest SAT scores are more likely to answer “yes” they are willing to stretch financially for a school that “…has a prestigious academic reputation” compared to sixty-three percent of students with the lowest SAT scores.
5. Student and parent use of Net Tuition Price Calculators (NPCs) has grown significantly compared to last year. Unfortunately, use among low-income students — those who could benefit most from the NPC — is not what it should be.
Since this is the second full admissions season that all colleges and universities that participate in federal student loan programs and enroll first-time, full-time, and degree-seeking students were required to have a net price calculator (NPC) on their web sites, studentPOLL revisited questions related to student and parent use of NPCs and the extent to which they found this tool easy or difficult to use. A net price calculator enables students and families to provide financial and personal information in order to determine what their expected annual net cost or financial aid award is likely to be from any given college.
In this study, we found that 18 percent of parents used a NPC. By income, 25 percent of higher-income students (above $100K) indicated their parents used a NPC compared to 16 percent of students with the lowest family incomes (less than $60K). While there is room for improvement, other findings in this study suggest that there has been an increase in the proportion of lower-income families and students taking advantage of the many financial aid informational resources offered by colleges, the U.S. government, and The College Board, among others to better understand college costs and how to finance a college education.
For example, when we gave students a lengthy list of online, print, and other resources and asked them to indicate which ones they had used to learn more about college costs, the proportion indicating they had used a NPC rose since our last study and the difference was significant. In 2011, for example, about one quarter of students indicated that they had used an “online financial aid or net tuition calculators on the web sites of individual colleges” compared to 44 percent this year. Similarly, in 2011, 12 percent reported using “online financial aid calculators on U.S. government web sites” compared to 26 percent this year.
We also asked students who reported that they or their parents had used a net price calculator (N=440 students) to rate how difficult or easy NPCs were to use on a scale of 1 to 10 with 1 being very difficult and 10 being very easy. Overall, these students found NPCs fairly easy to use (the mean overall rating was 7.0 compared to a 6.7 overall rating last year). Then we asked students who rated the ease of use of NPCs a 5 or below (N=72) to indicate the reasons why they viewed the calculator as relatively difficult to use, accepting multiple responses. The highest proportion of students cited these reasons:
- “Requires information I don’t have” (46 respondents)
- “Requires too much information” (33 respondents)
- “Takes too much time” (29 respondents)
Despite students’ growing use of NPCs and general satisfaction with their ease of use, a segment of students continues to have reservations about the tool’s accuracy in predicting how much they or their family are likely to pay annually for college. For example, of the 432 students who indicated they or their parents had used a NPC, only 4 percent were “very confident,” about its accuracy, 17 percent were “not very confident” and 3 percent were “not at all confident.” But perhaps a more interesting finding that suggests students’ ambivalence about the NPC is the fact almost one-quarter of these students indicated that they “don’t know / don’t want to respond” about how accurate the online calculator is in terms of accurately predicting how much students will pay annually for college. These collective findings suggest the need for colleges to continue to refine their NPC in order to strengthen its predictive capability and ensure that the amount of information families need to provide is not excessive or onerous.
6. Other sources of information about financial aid and financing college are more widely used by students than NPCs.
In light of the plethora of online and print sources of information available to students and their families about financing college, financial aid, and related information, studentPOLL wanted to find out what sources of information were most used by students to obtain this kind of information.
While student use of NPCs has steadily increased, students more heavily rely on other sources of information about college costs. The highest proportion of students reported using: information on college websites about financial aid, scholarships, etc. (79%); information in college brochures about financial aid, scholarships, etc. (72%); FAFSA (Free Application for Federal Student Aid) (64%); and the College Board web site (54%).
Among the interesting subgroup findings:
- Low- (48%) and middle-income students (49%) are more likely than high-income students (34%) to report that they participated in “financial aid workshops (at colleges or high school).”
- Low- (30%) and middle-income students (35%) are more likely than high-income students (20%) to report they had used “online financial aid calculators on US government web sites.”
- Low- (60%) and middle-income students (62%) are more likely than high-income students (43%) to report using the The College Board web site.
- By SAT score, students with the highest SAT scores (52%) are more likely to use “online financial aid or net tuition calculators on the web sites of individual colleges” than students with the lowest SAT scores (39%).
These subgroup findings suggest that there has been an increase in the proportion of all students using many of the resources available to them about financial aid and paying for college, particularly lower-income students and families for whom these resources are especially critical.
7. Students not only have high expectations about receiving financial aid, they expect financial aid (excluding loans) to cover half their college costs.
studentPOLL asked students who planned to apply for financial aid (N=951) to estimate what percentage of their total college costs including tuition, fees, and room and board, if applicable, they expect their financial aid award to cover. On average, students expect their financial aid award to cover 51 percent of their college costs with low-income students expecting 67 percent of their college costs to be supported by financial aid.
Interesting subgroup findings:
- High- (19%) and middle-income students (16%) are more likely to report that financial aid will cover “20%-39%” of their total college costs compared to low- income students (8%).
- Low-income students (30%) are more likely to report that financial aid will cover “80%-100%” of their total college costs compared to middle- (12%) and high-income students (5%).
- Caucasians (20%) and Asians (18%) are more likely to indicate that their financial aid award will cover “none to 19%” of their college costs compared to African Americans (6%) and Hispanics (5%).
8. More than three-quarters of students plan to major in a field that will prepare them for a career or graduate school.
We had students read a series of statements and asked them to select the one that best described their thinking about choosing a major. Over three-quarters (79%) indicated that they intend to choose a major that would “prepare them for a career or graduate school” or “give them the skills and experience they need to help them get a good first job.” Only 18 percent of students reported their intention to choose a major “in a field that interests me and I’ll worry about a job when I graduate.”
Interesting subgroup findings by SAT score:
- Fifty-nine percent of both students with low (less than 1100) and middle (1100 to 1290) SAT scores respectively were more likely to indicate “I intend to major in a field that will clearly help prepare me for a career after college or graduate school” compared to 48 percent of students with the highest SAT scores (1300+).
- On the flip side, 29 percent of students with the highest SAT scores (1300+) were more likely to report that “I intend to major in a field that interests me and I’ll worry about a job when I graduate” compared to 18 percent with mid-range SAT scores and 12 percent of students with the lowest SAT scores.
9. A sizable segment of students are “very concerned” about their prospects of getting a job once they graduate from college. Many plan to pursue majors in career-oriented fields.
When studentPOLL asked students how concerned they are about getting a good job when they graduate, 39 percent indicated they were “very concerned” and another 29 and 21 percent respectively indicated they were “somewhat concerned” and “slightly concerned.”
As one might expect, students from lower-income families (47%) are more likely to be “very concerned” about getting a good job after college compared to middle-income (33%) and high-income students (27%).
SAT scores also correlate with concern: 52 percent of students with the lowest SAT scores (less than 1100) were more likely to indicate they are “very concerned” about their job prospects after college compared to 32 percent of students with mid-range SAT scores (1100 to 1290) and 24 percent of students with the highest SAT scores (1300+).
We next asked students to read a series of statements and asked them to indicate the extent to which they agreed or disagreed with each statement. A high proportion of students indicated that they strongly or somewhat agreed with the following statements:
- “Regardless of the overall job market I will have the skills and education to get a good job.” (84%)
- “I am concerned about my ability to pay back student aid loans once I graduate” (68%)
- “A college degree won’t be enough. I’ll have to get a graduate or professional degree to be successful in my chosen career.” (68%)
While students are concerned about the job market, they appear to be optimistic about their ability to get a good job once they graduate. On the flip side, a sizable segment of students reported that they strongly or somewhat disagreed with the following statements:
- “The job market will be much better.” (42%)
- “I doubt the job market will improve.” (41%)
- “I may have to postpone my plans for graduate or professional school for a few years and work to earn money to go back to school.” (47%)
These statements also appear to show that students have a tempered optimism that the job market will eventually improve.
An interesting racial subgroup finding:
- Students of color have a greater level of optimism about the job market. Fifty-two percent of African American and 49 percent of Hispanic students indicated they “strongly or somewhat agree” that “the job market will be much better” after they graduate from college compared to 34 percent of their white counterparts.
Another salient finding further suggests students’ interest in pursuing majors with more defined and intentional career paths. When we asked students to indicate the category or fields that include the major they plan to pursue, a majority indicated they plan to pursue majors in the STEM fields (Science, Technology, Engineering or Math), pre-health studies, and business and economics.
10. Despite signs of a modest economic recovery, the current state of the economy has not improved most families’ financial situation in terms of paying for college.
Over the last several years, studentPOLL has examined the effect the recession and the nation’s slow economic recovery have had on students’ college consideration and choice. In this and previous studies, we asked students to choose one statement from a series of statements that they thought best described their own situation in paying for college.
Twenty-five percent of students in 2012 (compared to 30 percent in 2011) reported their own situation in paying for college as “My family and/or I will have to stretch a lot to afford to send me to college, but I think we’ll make it.”
True to our findings in 2011, a sizable segment of students continue to report a great deal of difficulty regarding their own personal situation in paying for college. This study and the one conducted in 2011 show that 22 percent of students indicated “I’m not sure how my family will afford to send me to college, but I believe we’ll work something out when the time comes” and 16 percent in both studies indicated “I don’t think my family can afford to send me to college, but we’re going to try anyway.” Clearly, families’ challenges in paying for college remain intractable even given modest improvements in the nation’s economic indicators.
Among the statistically significant subgroup findings by income:
- High-income (25%) compared to middle-income (2%) and low-income students (1%) were more likely to report “My family can afford to send me to almost any college.”
- Low- (33%) are more likely than middle-income (20%) and low- and middle-income are more likely than high-income students (9%) to report “I’m not sure how my family will afford to send me to college, but I believe we’ll work something out when the time comes.”
Other findings also suggest that students’ financial situations regarding paying for college have not changed dramatically. This year we asked students if their family’s financial situation made a list of statements about various college choices true for their family. A majority of students indicated “yes” that the following statements were true for their family:
- “I will probably attend a public college or university in my home state.” (51%)
- “I will probably work part-time or more while attending school next year.” (63%)
Some 29 percent of students responded “don’t know / don’t want to respond” for the statement “I will probably attend an institution with a reputation for generous financial aid.”
11. A majority of students plan to work part-time or more while in college and expect to pay for some of their college education.
The financial burden many students bring to college is reflected in several findings in this study. When asked if they plan to work while attending college next fall, 54 percent indicated they plan to do so while 19 percent answered “no.” Another 27 percent answered “don’t know / don’t want to respond.”
By income, 57 percent of students from lower-income families (less than $60K) and 64 percent of students from middle-income families ($60K to $100K) expect to work while attending school compared to 42 percent of students from high-income families (above $100K). Despite these meaningful differences, across all income and academic levels, a high proportion of students expect to work during college.
We also asked students whether their parents expected them to “pay for some of your education” or “pay for most or all of your education.” Some 57 percent of students indicated that their parents expect them to “pay for some of their education” while 25 percent reported they would need to “pay for most or all of their education.”
By SAT score, 69 percent of students with the highest SAT scores (1300 and above) are more likely to say “no” compared to 56 percent of students with the lowest SAT scores (lower than 1100) that their parents do not expect them to “pay for most or all of your education.”
Study Methodology [top]
The findings of this issue of studentPOLL were based on a random national sample of SAT test takers. More than 39,000 students were sent an email inviting them to participate in the survey. Fielding of the survey took place from November 14 to December 10, 2012 with 1,237 respondents beginning the survey and 1,138 students meeting the requirements to participate in the survey. All respondents are four-year, college-bound students. Responses are weighted by gender, region, and race data provided by the College Board with the exception of responses from the Southwest which were weighted solely on region due to small numbers in the sample. The margin of sampling error for this population of students is plus or minus 2.79 percent.
Specific demographic information about these respondents is provided in the table below:
|SAT Score Distribution (Mean 1170)||Annual Family Income (Mean $84,700)||Ethnicity|
|Low (< 1100): 46%
Mid (1110 - 1290): 30%
High (1300+): 25%
|< $60K: 47%
$60K - $100K: 25%
> $100K: 28%
African American: 20%
Latino / Hispanic: 18%
- Continue to encourage the use of your online net price calculator and other information tools that give students an accurate estimate of their annual net cost once financial aid is taken into consideration. Given the sizable segment of students using a variety of information sources to learn more about college costs and paying for college, continue to invest resources in workshops, brochures, and other materials that help prospective students and families better understand their likely cost of attendance, the financial aid programs and policies of your institution, and the extent to which they realistically can afford to attend your institution.
- Make sure that information about your institution’s cost of attendance and financial aid resources is easily found on your web site and that the information provided is concise and simple. On the web page where you have college cost information encourage students and families to access your NPC to determine what the actual annual cost of the college would be for their family. In the end, making this information as transparent as possible will likely improve your application and enrollment results.
- The findings of studentPOLL reflect general trends across the broad college-going population in the U.S., and should not be interpreted as representative of the behavior of any one institution’s prospect pool. Each institution is unique, and only a careful examination of its own prospect pool can reveal how an institution can best maximize its net tuition revenue given its value proposition, its market position, the demographic makeup of its prospect pool, and many other factors.
About studentPoll [top]
A collaboration between the College Board and Art & Science Group LLC, studentPOLL presents the results from a series of national surveys that measure the opinions, perceptions, and behavior of college-bound high school students and their parents. Published for the benefit of college and university senior leaders and enrollment officers as well as secondary school college counselors, studentPOLL seeks to provide insights and understanding that will result in better communication and service to college-bound students across the nation.
First published in 1995 by Art & Science Group, a leading national source of market intelligence for higher education, studentPOLL has become a trusted and widely-cited source of reliable data and insights on many critical questions concerning college choice. The College Board and Art & Science Group have now joined forces to expand the depth and range of the issues that will be explored in studentPOLL.
About the College Board and Art & Science Group [top]
The College Board is a mission-driven not-for-profit organization that connects students to college success and opportunity. Founded in 1900, the College Board was created to expand access to higher education. Today, the membership association is made up of over 6,000 of the world’s leading educational institutions and is dedicated to promoting excellence and equity in education. Each year, the College Board helps more than seven million students prepare for a successful transition to college through programs and services in college readiness and college success — including the SATÂ® and the Advanced Placement ProgramÂ®. The organization also serves the education community through research and advocacy on behalf of students, educators and schools. For further information, visit www.collegeboard.org.
Art & Science Group (http://www.artsci.com/) is one of the nation’s most influential consulting firms specializing in market-related issues facing higher education and the nonprofit sector. The firm’s work synthesizes imagination and empirical rigor — art and science. Its research is considered the most rigorous and innovative in higher education today. The firm assists clients in every major arena of marketing and communications: market-informed strategic planning; enrollment management and student recruitment; development and alumni relations; tuition pricing and financial aid. The firm has extensive experience working with a large variety of public and private institutions of higher learning, ranging from comprehensive private and public research universities to small liberal arts colleges and professional and graduate schools. The firm also increasingly provides its consulting services to independent schools and non-profit organizations nationwide.