Category Archives: filtration

Chart: Social Mobility

Chart: Social Mobility

Upward mobility top and bottom 10

This week’s chart comes from rankings compiled by the Social Mobility Index (SMI) and put into this handy format by Rick Newman in an article for Yahoo Finance.

I appreciate what SMI has done here. I’ve seen tons of rankings put out by the various sources of colleges on all sorts of merits, including all around best colleges, top party schools and stone cold sober schools, best colleges for nature lovers, etc, etc. We must typically take these with a grain of salt because “best” is a subjective credential and the criterion can be misleading for students of other opinions. They also tend to not place all that much emphasis on the sorts of practical financial consequences their students must face once in the workaday world.

However, this ranking system, which incorporates metrics of former students’ financial health, is geared to “highlight the schools that do the best job of helping disadvantaged students graduate with the ability to start a career free of crushing levels of debt.” We’re getting warmer…

Continue reading Chart: Social Mobility

Chart: Low Income + Expensive Stated Tuition ≠ Unaffordable Education

Chart: Low Income + Expensive Stated Tuition ≠ Unaffordable Education

Actual Cost Cropped Pic

  (Chart above has been cropped for space reasons. Click on it for the full version)

 

This chart comes to us courtesy of Jeff Guo of the Washington Post, who included it in his short article about how poorer students get caught in the trap of not applying for good, cheap schools because they seem expensive on the surface. Indeed, the gap between actual post-aid tuition costs and sticker price can be significant, particularly at private schools whose endowments provide flexibility to tier their prices and/or negotiate individually. As Mr. Guo points out, the tuition for poorer household students borders on zero at many schools notorious for exclusivity and expense. College finance experts have written on this time and time again but this week’s chart provides an excellent visual prompt to not accept a stated tuition at face value.

The upshot: in your quest to identify schools that fit your needs and your pocketbook, don’t out of hand overlook those schools which seem expensive but might offer good financial aid packages. As you filter schools for affordability be sure not to rely solely on sticker prices. Instead determine what your costs at an institution will look like, whether through aid-adjusted aggregate data or more personalized calculators.

 

Chart: The Disappearing Male

disappearing male

 

Chart: The Disappearing Male

This selection comes to us from a Forbes article by the venerable Richard Vedder titled “The Disappearing Male on College Campuses.” Today’s chart shows that there has been a consistent, downward trend of male participation in college for several decades now. As professor Vedder points out, this is both a function of declining male enrollments on the front end and a lopsided tendency to drop out early on the back end.

While the policy wonks and sociologists worry about the causes (though I certainly have my own theories), affordologists must contend with the effects. Today let’s not get caught up in the big picture of “why is this happening?” or “what should we do about this?” (political) but “why should I care?” and “what should I do about this?” (practical).


Continue reading Chart: The Disappearing Male

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

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

Projecting Payoffs

Projecting Payoffs

The words Pain and Gain on a matrix of choices showing how to minimize pain or sacrifice in order to maximize returns and results

The Last “R”

So far we’ve explored ensuring affordability by running two sets of necessary filters: how to narrow down your college choices by priority so as to not run afoul of opportunity costs (Rank), and how to know how much college you can your income and assets will allow you (Resources). Now we’ll explore a critical third component to affordability/affordology: that of Return. 

This exercise will help you make two critical financial determinations:

For one, you’ll note in the previous discussions we didn’t address a major funding component of college in this day and age: the loan. Before counting loans as a resource, we must know whether that loan will count as “good debt” or “bad debt.”

For two, even if a student has plenty of available cash resources and thus doesn’t need loans, it still helps considerably when choosing colleges to understand the tipping point at which the cost of a college is worth it or not. Continue reading Projecting Payoffs

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

The Three Rs of Affordology

The Three Rs of Affordology

Mustang

Filtration

We can operate a machine without filters in place only for so long before the engine gets so jammed with junk that it quits working altogether. In the same way, a person who indiscriminately spends without filtration will suffer a breakdown. Affordology allows us to take what we know about good and bad purchases and filter all our options through what I call the “Three Rs”: Rank, Resources and Return. If any item fails any of these filters, we shouldn’t allow it to impact our wallet.

Think about any major purchase and the thought processes that must go into it for it to be a successful one. Let’s take an automobile for example. When buying a car, we (mostly subconsciously) consider the following factors: Continue reading The Three Rs of Affordology