The Simplest Way to Bring Down the Cost of College | Mark Salisbury | TEDxDavenport

[Music] in the last four decades the cost of college has gone up one thousand three hundred thirty two percent family income not so much three hundred fifty nine percent this is one of the big reasons why student debt last year surpassed 1.5 trillion dollars now the debate over college prices tends to turn into a bit of a food fight on the one side throws it at the greedy colleges and the other side throws it right back at the ignorant politicians but meanwhile as one mom told me recently the worst part about it is that you feel like there's always something you don't know and that you're powerless to do anything about it well in the last couple of years the college admissions landscape has imploded and now there's absolutely something you can do about it something that could actually bring down the cost of college because the problem isn't really about price and the solution it wouldn't cost us a dime so in the 1980s Higher Education stumbled on this old marketing idea called the Shiva Striegel effect yep that's the company that put their whiskey into fancy bottles jacked up the price and watch sales take off turns out then in a marketplace where you can't tell the difference between brands the public will often equate price with quality well as soon as a few colleges tried this and saw applications go through the roof a whole bunch of other colleges said well we're going to do that too and what started out as a couple of schools trying to differentiate themselves with higher prices turned into this nationwide game of keep up with the Joneses now a lot of schools figured out pretty quickly you know what this new appetite for high prices is going to outpace what students can afford but once you start justifying your price as a reflection of quality you can't really say well just kidding so colleges figured out that what we'll have to do is we'll just have to increase the size of the financial aid we give out keep the kids coming in and maintain the illusion that the public will absolutely pay the price that we're charging as a result the sticker price and the actual price grew further and further apart so between 1990 and 2018 sticker prices in today's dollars doubled but the actual prices that students paid didn't jump nearly as much and if you put it in today's dollars at public institutions or private institutions over almost three decades those actual prices went up less than seven thousand dollars that's about two hundred and fifty bucks a year all right so at this point you have every right to be a little confused after all you've read all the headlines about college prices going through the roof and I'm standing here telling you now didn't go up that much all right so journalists public policymakers academics we like to zoom out talk about the big picture or the overall the averages but the 40,000 foot view is a lot different than what's going on on the ground and for individual students it wasn't about the sticker price or the actual price it was the way that both of those prices changed over time that made it so difficult to find a college you knew you could afford so in 1990 at private institutions three out of four prices sat within an eighty five hundred dollar range at public institutions they sat within about a twenty five hundred dollar range and you could tell that a private institution was getting more expensive than a public institution by 2018 not only had those two ranges converged but now that range is a 33 thousand dollars spread and for a lot of students they could find a private institution that was less expensive than a public institution well okay so the good news is if there is any there's some low prices still out there the bad news is you're gonna have to apply to all 4,500 colleges and universities to find them well so the federal government's decided to try to bring some sanity to this mess by requiring every college to have on their website something called a net price calculator the idea was you put in your academic information and your financial need information and that little tool will pop out for you the price that you would be asked to pay at that school if you were accepted well guess what colleges didn't like this idea too much and their implementation efforts showed it they either buried it on the webpage so you couldn't find it or they made it a really complicated convoluted form so people quit halfway through and accuracy well results varied you wouldn't have known that but results varied even if the schools had embraced in that price calculator it wouldn't have solved the core problem okay if you're looking for a college and you can only pay up to a certain price how do you ensure that you only look at schools you can afford well let's walk through how this process works you start with 4,500 colleges and universities that's two-year and four-year schools all over the country and you start to narrow your choices down by whatever two variables you choose if you're like some of the 17 year-olds I know it's about whoo it's got the best food but anyway you narrow your choices down to a small group and that's the group you you apply to right now if you got a lot of money you can apply to a lot of schools because they're usually 50 bucks a pop if you don't you apply to a few and then you wait eventually you find out where you got accepted that's when you find out your actual price a couple of weeks later you're supposed to decide okay so what happens if you can't afford any of the prices you got that's what's happening to many students today it used to be that you didn't really have a choice because there's more students than there were spots in college so you either borrow a bunch and hope for the best or you bail on the whole idea of college but a little things shifted in the last couple years to changes everything in 2010 nationally we graduated 3.5 million high school seniors at the national level that number stays flat for the next decade or so and after a little bump it drops off the table but in the Midwest in the Northeast the two regions of the country with the highest concentration of colleges and universities that number starts to drop in 2011 and by 2030 each year graduating 200,000 fewer high school seniors well the colleges have already started to feel this pinch the National Association of college admissions counselors puts out a list on May 1st of every year of the colleges that they know of that are still looking for students in 2010 210 schools showed our Tim sorry 2013 210 schools showed up on that list by 2018 it was 422 schools and last year a survey of college business offices a national survey found that over half of all colleges and universities never made their enrollment goals well this ought to mean something right this thought I mean that we have some power because if there's more seats in colleges than there are students to fill them we ought to be able to shop around colleges have to wait for us to decide what we need those actual prices guess what they're not hidden in a vault somewhere they're out in the open they're scattered across the millions of award letters that students receive each year you got a couple of prizes you got a couple of price I got a couple prices but right now since I don't know what I don't know I think that the sum total of my choices are sitting there in a couple of envelopes on the kitchen table so how do we fix this if we share the information we already have we pull the curtain back on college pricing all of a sudden you can each find the full range of prices and you can use that information to your advantage so how would this work well you only really need to share three pieces of information first you need to have something that represents academic merit that could be a test score high school GPA you need to have something that represents financial need and that comes from everybody has to fill out this thing called the Free Application for Federal Student Aid called the FAFSA and at the end of that you get what's called the estimated Family Contribution the EFC that's a proxy for need and then you just got to share letters that have the college's price and the college that gave it with that information we could organize all these prices so that you could see all the prices offered by other colleges to students just like you well this tool could do a whole lot of other good because now you don't have to apply to a college without knowing whether you could afford it or not and for low-income students who are already overwhelmed by the notion of applying to college let alone figuring out how to pay for it this suddenly takes all of the uncertainty away and allows them much better chance of going through that process and actually enrolling in college it turns out that there are a lot of good colleges out there that most of us have never heard of and it turns out that those schools also offer pretty good prices well with this resource those schools would gain a lot more attention and maybe they become the exemplars of how a higher education institution should be run and then with all this transparency flying around not too much hold on and then you're going to have a few colleges that say wait a minute if we reduced our price just a little bit we could compete for some more students it's time for us to make college prices transparent higher education is bad at change but they need us to keep the lights on and frankly today we need each other more than ever if there's one thing we know from decades of research on college students it's that what you do in college matters far more than where you go price doesn't equal quality it never did if we can make college prices transparent more students be able to find a college they could afford fewer students end up deep in debt more students know that their school is the right fit and fewer students end up regretting their college choice if we team up we could start to bring down college prices thank you you

Channel: TEDx Talks

Views: 3,665

Rating: 4.7590361 out of 5

Keywords: TEDxTalks, English, Education, Economics, Education reform, Higher education

Id: Be4-8HC4sUM

Length: 12min 15sec (735 seconds)

Published: Wed Apr 10 2019