Category Archives: rank

OK, But What Does “Afford” Mean?

OK, But What Does “Afford” Mean?

I tend to catch a certain sort of article that comes across my radar with fair regularity, such as : “Four Steps to a Debt Free Degree” by financial blogger Jeanie Ahn, which is a rehash of the included video by Rachel Cruze.

According to Mrs. Cruze, specifically to get through college debt-free a student needs to:

  1. Choose a College You can Afford
  2. Seek out all Opportunities for Financial Aid
  3. Work Your Way Through School
  4. Ask Your Parents for Help

I take no issues with articles like these in that they provide a little bit of food for thought to those who haven’t explored even the most basic options to save and earn money for school. I would highly encourage any student to seek out these opportunities in addition to dozens and dozens more that would shave one’s out-of-pocket costs down to reasonable levels. I’m hoping this upstart blog and upcoming book can shed more specific light on some of these over the next few months.

I also wholeheartedly agree with the article’s #1 being #1. Your first step toward an affordable education should be to stay within your means. That much seems obvious. But it brings up a question: Just what does “can afford” mean?

Continue reading OK, But What Does “Afford” Mean?

The Big Ts and College Outcomes

The Big Ts and College Outcomes

thinking

Why can you fairly consistently put any two people into a given situation and end up with vastly different results? The question has fascinated me for some time, particularly as I am privy to the financials of numerous people through work and ministry. I have met public schoolteachers with money to burn and flat-broke corporate executives. Some folks feel blessed by their wealth and others curse the day they came into it. Some walk through hard times with head held high and others with self contempt. Whatever the events in question I observe outcomes of greed and generosity, fear and excitement, success and failure, personal responsibility and others-blaming. Why the differences?

Over time I have come to find that one’s financial results have not much to do with externally observable factors. Rather, how one fares largely comes about due to one’s philosophical view of money. What is money to you? Once I ferret that out then with fair certainty I can tell you the sorts of results you can expect to show for your financial circumstances, whether it involves earning, saving, spending, or investing.

In a similar fashion when we look at the college scene today – the stats, the stories, the trends – if nothing else we note vastly different outcomes across the population of students.  Some graduate without a hiccup and some drop out; some credit their degree with a higher quality of life while others strive with careers and debt. Why? And what will your results be? Tell me what college is to you and I can probably answer that question. And for the record: my earlier-held views sure account for my struggles and failures as a student/early graduate.

Continue reading The Big Ts and College Outcomes

Chart: The Growing Trend of Tuition Discounts

Chart: The Growing Trend of Tuition Discounts

 

tuition discounting

 

Here we get some insight into a prevalent, confusing, and frustrating, aspect of the college experience: the fact that nobody knows what they will pay for any given school. While schools will publish tuition rates and total costs, if you pull ten random students from any random college (particularly the private ones) to ask what they actually pay you’ll end up with ten different answers.

As an article and accompanying chart by Kellie Woodhouse of Inside Higher Ed show, the average tuition discount now runs a full 48% for incoming freshmen and 41.6% overall. The article also states that a full 77% of current students currently receive a discount. In other words, we’re approaching the point where three-quarters of students pay an average of nearly half of the published tuition at their schools.

Why is this done? Why does the actual price paid differ so widely from the published price? The answer is twofold: 1) the higher published price allows colleges to charge more whenever they can get away with it and 2) discounts act as a discriminatory admissions tool. The college might only “need” to charge $25,000 per student, but if it has a certain number of students able to pay a higher tuition then they feel that to “only” charge that amount leaves money on the table. Also, as a college seeks to round out its student body with students of a certain variety (admissions counselors seek to engineer their demographic diversity along economic, racial, geographic, study area, and other lines) it will offer discounts to entice desired students to join the mix.

The second of these reasons engenders much controversy. After all, if a landlord posted rent at $X but put out the word that he would take half that amount from tenants of a certain “desirable” variety he would soon be sued for discrimination. But in the world of college this practice has become very much the norm. Right or wrong, it is what it is.

That said, this understanding should shift the behavior of those prospective students looking to get a good deal. For one, it literally pays to go where you’re wanted, as we’ve explored previously. For two, I always encourage students to explore schools primarily for other reasons beyond price, given the wide prevalence of discounting. In short, don’t rule out schools that seem out of reach if they’re an otherwise good fit (We’ll discuss this idea further in our next Tip of the Week).

In the meantime, be discouraged enough by tuition increases to take action to alleviate the pain, but encouraged that not all is at it seems on that front.

 

Resident, Non-Resident, and In-Between

Resident, Non-Resident, and In-Between

In this article I explain how students attending out-of-state public schools needn’t pay the full nonresident tuition price that may otherwise keep them in-state, and how attending another state’s school(s) may actually save a student money over attending their own in-state college(s).

Quite often in college selection, students can feel somewhat forced into a state school for pricing reasons. After all, the average sticker tuition cost of a public institution is about 3.6 times less than a private institution, and that difference matters over the course of four years, with the total cost of tuition averaging just over $34,000 at a public school or $123,000 at a private school, notwithstanding discounts and scholarships and the like.

But to be more specific yet, students can feel somewhat forced into a particular set of state schools … those on their home turf. After all, the difference between in-state public school tuition and out-of-state public school tuition looms almost as large as those between public and private, with costs usually running around 3x or more for kids attending state schools outside of their resident borders. So while Washington State might be more attractive on a Rank basis to an Arizona resident than the three state schools of prominence here, when looking at the sticker prices involved it might appear an unjustified extra expense all the same.

For example, the three state schools of Arizona have sticker resident tuitions of $9,684 (ASU), $9,746 (NAU), and $10,752 (UofA), and these are substantially cheaper than the sticker non-resident cost of $23,956 at Washington State. Certainly, any way you cut it a $40,000 4-year college education is quite a bit cheaper, and therefore likely more affordable all things considered, than a nearly $100,000 one.

I know this really bummed me out when I graduated high school – one of my key Rank objectives was to get a fresh start far, far away from my hometown and to see a little bit more of the country than I’d already known. Another was to attend a smaller school than what my state could offer. Though cheaper than my other known options, my in-state schools were both too near and too populous for my liking.

However, one needn’t despair altogether if the in-state school option seems affordable on the Resource and Return level but seem unpalatable otherwise. Further, one needn’t despair if one’s state schools don’t even pass muster financially.

Thanks to regional Student Exchange Programs, schools in the same geographical region often form consortiums, and agree to offer either in-state or capped rates to students from other participating state schools. For instance, the west has one such program, the Western Undergraduate Exchange (WUE), and similar programs exist for schools in other regions. While particular schools may have more individualized agreements with even better terms, WUE partnership schools have all agreed to charge in-region students a maximum 150% of their in-state tuition.

This means several things for the student. For one, they may find that an out-of-state school of a particular stripe elsewhere offers the sorts of experience and amenities they otherwise had looked only to private schools to provide. For two, one can expand one’s scope of affordable schools considerably. For three, the student may actually attend an out-of-state school for less money than they would have spent in-state.

This last fact is particularly striking as I work primarily with residents of Arizona. Here we only have three in-state public four-year institutions. As already noted, they all cost just shy of $10,000 in tuition alone. But if a person were willing, or wanting, to travel to another WUE-associated school, he or she could actually save money by doing so. The pricing details can be found here (WUE Tuition Savings Chart). When scanning for alternative four-year colleges that would be cheaper to attend than my in-state options 3  in Alaska, 14 in California, 1 in Hawaii, 4 in Idaho, 6 in Montana, 3 in Nevada, 7 in New Mexico, 6 in North Dakota, 5 in Utah, 3 in Washington, and 1 in Wyoming would fit the bill.

Thus, I would encourage students to largely ignore the posted resident and nonresident tuition numbers of schools int their proximity as they seek to identify affordable schools. Quite likely, schools within an entire region may be cheaper than previously thought, possibly even cheaper than what one can find in-state.

 

Family Help: Intro

Family Help: Intro

family

The Temptation & The Fall

Perhaps no single set of financial issues vexes parents of teens more those regarding the funding of college. Decisions to help someone in big ways never come easy, and in this arena parents face immense pressures, internal and external, in addition to their innate desires to get their newly adult kids to a good place.

As a result too many parents fuel their kids’ college careers without much regard to their own needs. In doing so they often ensure their kids don’t have to move back in with them later only to find that later they have to move in with their kids. When parents want to help, how do we know how much is too much? Continue reading Family Help: Intro

Getting Stuck: Of SUVs and Bills

Getting Stuck: Of SUVs and Unpaid Bills

death by gps joint (2)

Recently my family embarked to my cousin’s house a couple hours away. Getting there via paved roads means driving east into the town beyond them, fighting through downtown traffic, and then circling back west to their place at the edge of the woods. It annoys us to no end to take such a circuitous route when the miles driven exceed by a fair amount the miles a crow would fly to get there. So when my cousin discovered a more direct dirt road route two or three highway exits earlier we were excited to try it. He gave us the directions, which I ignored in the moment. No need to pull over to the shoulder and write it all down, after all. When I hit the appropriate exit I fired up the ol’ GPS which definitely seemed to have a good tack on which forest roads to take.

We then continued to simply follow the turn by turn instructions and shortly thereafter found ourselves in quite the jam. Our last turn off of the mountain required every ounce of our SUV’s capacity as we slowly picked and slid our way down a rocky, washed out hillside until we could go no further. Backing up merely meant spinning out and to go forward would slam us in a rut so deep and jutted I feared debilitating personal and vehicular damages. Night enveloped us, the kids panicked, and my wife had had enough. We gathered our luggage, walked the rest of the way down the rocky crags to dirt road intersection by flashlight, and called in a ride. After having read about the proverbial “death by GPS” I became its latest victim.

Eventually I got the rig back to town in one piece but not until after a lot of time spent clearing the way with hand tools, damage to my undercarriage, and several harrowing moments at the wheel careening around between rocks and hard places.

What does this have to do with college affordability? Plenty.
Continue reading Getting Stuck: Of SUVs and Bills

Let the Filtration Begin

Let the Filtration Begin

Conversion funnel

What We Now Know and What We Soon Will 

Thanks to the exercises in the previous chapters , you now know three very important things (things most college students have no clue of):

1. The specific experience and environment you want college to provide you…the Rank filter,

2. How much you can pay before you run out of money…the Resource filter and

3. The maximum you should pay in total for the experience to prove financially worthwhile…the Return filter.

Now you can begin the process of searching for colleges or programs that will satisfy all your criteria. Fortunately for us in the internet age students armed with foundational objectives can now turn to a number of free websites to begin the otherwise daunting process of filtering through all their college options. Continue reading Let the Filtration Begin

A Prioritized Pursuit

A Prioritized Pursuit

Pinnwand

Rank: Priority of Priorities 

In another posting related to a Chart, I encouraged you to look into colleges with monetary costs as a secondary consideration. That might sound funny coming from a blog dealing with keeping college affordable.

But remember, while you can get anything in life you want, you can’t have it all. Prioritization must be your first priority. Before we get into the actual dollar cost aspects of affordology, let’s firstly address the opportunity cost considerations. Even a cheap experience (money-wise) at the wrong place may prove unaffordable (opportunity-wise). Besides, as we’ve noted, costs are highly negotiable while the other aspects of an experience at a particular college are relatively fixed.

Continue reading A Prioritized Pursuit

Let’s Not Assume

Let’s Not Assume

One’s an incident, two’s a coincidence, three’s a theme. And do I ever smell a theme. Just last week as I combed through my Google Alerts newsfeeds I read:

“A college degree is the gateway to success in today’s economy.” (source)

“A college degree is the only sure path to middle-class security…” (source)

“The biggest absurdity is that a four-year college degree has become the only gateway into the American middle class.” (source)

“… higher education is, more than ever, the surest ticket to the middle class.” (source)

If any of the above holds true, then it only makes sense that tuition soars and we, as individuals and as a body politic, promote a college-or-bust mentality. But keep in mind that any time we assume, in the immortal words of Felix Unger, we risk making “an ass out of u and me.”


Continue reading Let’s Not Assume

When Purchases (Including Educations) Flunk You

 When Purchases (Including Educations) Flunk You

brain with arms and legs run away with money

Easy Enough

So far I probably haven’t revealed to you anything earth shattering. For most, affordology seems simple enough in theory and the filters make sense. In some ways I’ve merely systematized thought processes we all instinctively and subconsciously complete on our own. However, you should be aware that at least three mistakes in thinking will trip you up (with fair regularity) if we don’t address them. Let’s explore these before we move on into the planning phase. Continue reading When Purchases (Including Educations) Flunk You