The price of college has continued to climb over the years, prompting policymakers to engage in debates about the return on investment of college. Measuring the value of tertiary education relative to cost is essential because students need to obtain adequate information to make informed decisions regarding whether and where to attend college. College published fees and tuition, which is the sticker price, have recently increased. However, the net cost of attending college, which includes the amount paid by the students after deducting the portion catered for by loans, has increased at a relatively lower rate. Although scholarships and grants make tertiary education more affordable, it can be difficult for students to determine the real cost of college because the sticker price does not include other hidden costs paid by students. This means that the current cost of college can only be afforded by students from families who are financially stable and able to pay tuition and fees without relying on financial aid
The cost of college is unaffordable by many students. Even with the grants and scholarships available to low-income students, the funds do not offset the expenses students will bear (Blagg and Blom 3). Colleges have continued to increase fees and tuition after realizing that students have access to loans and financial assistance. Sticker prices are usually inaccurate, making it difficult for students to plan effectively. Furthermore, the cost of attending college is usually too high for most of the students and families to readily afford regardless of their level of planning. Therefore, the current cost of college only favors students from financially stable families who are insulated from the risks of securing loans to cater to college costs.
The authors argue that:
Even with a financial aid package in hand, students can make errors in estimating costs, financial aid award letters can obscure the amount students will actually have to pay, and the students do not always make fiscally optimal choices when selecting financial aid packages. Students from high-income families are more protected from the potential risks of college costs. These students are often insulated from the need to take on student debt and are more likely to make economically rational decisions when weighing financial aid packages against the resources and opportunities available at a given school (Blagg and Blom 3)
Blagg, Kristin, and Erica Blom. “Evaluating the Return on Investment in Higher Education.” (2018): 1-49