Should Colleges Be Able to Determine Costs of Living?

I was reading through the newest National Center for Education Statistics report with just-released federal data on the cost of college and found some interesting numbers. (The underlying data are available under the “preliminary release” tab of the IPEDS Data Center.) Table 2 of the report shows the change in inflation-adjusted costs for tuition and fees, books and supplies, room and board, and other expenses included in the cost of attendance figure between 2011-12 and 2013-14.

Tuition and fees rose between three and five percent above inflation in public and private nonprofit two-year and four-year colleges between 2011-12 and 2013-14 while slightly dipping at for-profit colleges (perhaps a response to declining enrollment in that sector). Room and board for students living on campus at four-year colleges also went up about three percent faster than inflation, which seems reasonable given the increasing quality of amenities. But the other results struck me as a little odd:

This tweet got picked up by The Chronicle of Higher Education, and led to a nice piece by Jonah Newman talking to me and a financial aid official about what could be explaining these results. In my view, there are three potential reasons why other costs included in the costs of attendance measure could be falling:

(1) Students could be under such financial stress that they’re doing everything possible to cut back on costs at least partially within their control. Given the rising cost of college, this could potentially explain part of the drop.

(2) Colleges could be trying to keep the total cost of attendance—and thus the net price of attendance, which is the cost of attendance less all grant aid received—low for accountability and public shaming purposes. In my work as methodologist for the Washington Monthly college rankings, a college’s net price factors into its score on the social mobility portion of the rankings and its position on our list of America’s Best Bang for the Buck” Colleges. A higher net price could also hurt colleges in the Obama Administration’s proposed college ratings, a draft of which is due to be released later this fall.

(3) Colleges could be trying to keep the cost of attendance low in order to limit student borrowing because students cannot borrow more than the total cost of attendance. Colleges may think that limiting student loan debt will result in lower default rates (a key accountability measure), and there is some evidence that the for-profit sector may be doing this even if it cuts off students’ access to funds needed to pay for living expenses:

Looking at each of the individual components beyond tuition, fees, and room and board, book and supplies costs staying level with inflation or slightly falling in the nonprofit sector could be reasonable. Pushes to make textbook costs more transparent could be having an impact, as could the ability of students to rent books or access online course material at a lower price than conventional material:

While room and board for students living on campus increased 3-4 percentage points faster than inflation over the last two years, the cost of living off campus (not with family) was estimated to stay constant. However, as Ben Miller at the New America Foundation pointed out to me, some colleges cut their off-campus living expenses to implausibly low values:

The “other expenses” category (such as transportation, travel costs, and some entertainment) dropped between one and five percentage points. These drops could be a function of colleges not accurately capturing what it costs to live modestly because surveying students is an expensive and time-consuming proposition for understaffed financial aid offices. But it could also be a result of pressure from administrators or trustees who want to keep the total cost (on paper) lower.

A potential solution would be to take the room and board estimates for off-campus students and the “other expenses” category out of the hands of colleges and instead use a regionally-adjusted measure of living expenses. The Department of Education could survey students at a selected number of representative colleges to get an idea of their expenses and whether they are what students need in order to be successful in college. They could use this survey to develop estimates that apply to all colleges. There is some precedent for doing this, as the cost of attendance estimates for Federal Work-Study and Supplemental Educational Opportunity Grant campus funding add a $9,975 living cost allowance and a $600 books and supplies allowance for all students. This should be adjusted for regional cost of living (and what costs actually are), but it’s something to consider going forward.

Author: Robert

I am an assistant professor of higher education at Seton Hall University. All opinions are my own.

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