Posted by Mike Smith :: February 19, 2009 @ 5:59 amTodayShow.com had a particularly interesting take on The Princeton Review and USA Today’s report, The Best Value Colleges for 2009. More than just an application of the old adage that “you get what you pay for,” many prestigious schools ranked high on value because they significantly offset students’ costs with grants and scholarships.
Value can be hard to quantify, but the cost of education certainly comes into play. What the report seemed to indicate was that many of the top value schools were meeting a significant portion (up to 100% in many cases) of a student’s financial needs through grants and scholarships. Unlike student loans, these types of aid do not need to be paid back. Regardless of the stated cost of a school, if grants and scholarships cover a significant portion of that cost, value will surely increase. Given a choice between a mediocre school with a low cost and a top-notch school whose high cost is offset by grants and scholarships, the top-notch school can often come out ahead.
To help illustrate this idea, the following information was presented: The cost for tuition, room and board for a single year at Harvard is $47,100. Clearly that is a number that few students would be able to afford without taking out student loans. But when you consider that the average grant aid package at Harvard is $35,000, the actual cost is much more reasonable. That’s not to say that Harvard is necessarily the most cost-effective option (someone eligible for a partial scholarship at Harvard may be able to get a full scholarship elsewhere), but it certainly helps you realize that Harvard and other schools with high average financial aid packages are not nearly as expensive as they first appear.
The conclusion I draw from the report and analysis is that students should not dismiss schools solely based on their sticker price. Like so many other types of purchases, it’s not the price they advertise, but the price you actually pay that matters.
Were your (or your children’s) college costs offset by grants and scholarships?
1 Comment
I've got HUGE student debt from 4.5 years of private college. I borrowed too liberally in hind-sight and wasn't offered much financial aide at all, even coming from a low-income, single parent house hold. Sallie Mae jacked my interest rates up to over 14% before I was able to re-finance at 7%, but it's still essentially like having a mortgage on a 120k house, without the benefits of being able to live in it!
If/when I go to grad school, value will on the top of my list when considering where to go. I refuse to take on tons more debt for another degree.
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