The high price of college is the subject of media headlines, policy debates, and dinner table conversations because of its implications for educational opportunities, student and family pocketbooks, and the economy. Some people caution against giving too much weight to the advertised price of a college education, pointing out that the availability of financial aid means that college is not as expensive as people think it is. But they overlook a substantial problem: for many students, the real price of college is much higher than what recruitment literature, conventional wisdom, and even official statistics convey. Our research indicates that the current approach to higher education financing too often leaves low-income students facing unexpected, and sometimes untenable, expenses.
Financial challenges are a consistent predictor of non-completion in higher education, and they are becoming more severe over time. Unexpected costs, even those that might appear modest in size, can derail students from families lacking financial cushions, and even those with greater family resources. Improving college completion rates requires both lowering the real price of attending college -- the student's remaining total costs, including tuition, books, and living expenses, after financial aid -- to better align with students' and families' ability to pay, and providing accurate information to help them plan to cover the real price of college.
Many policymakers argue that bringing the personal and public benefits of higher education to an expanded population of Americans is important for the economy and to address inequality. Financial aid policies, they assume, help those with scarce resources to earn their degrees. But these policies often fall short, and when students have difficulty paying for college, they are more likely to focus their energies on working and raising funds rather than studying and attending classes, and are less likely to complete their degrees.