Over the last 20 years, the average published sticker price for tuition and fees, and room and board at private, non-profit colleges like Linfield increased by 59 percent while U.S. per capita personal disposable income grew by 32 percent. Since the tuition sticker price rose by more than income, you might conclude that a private college education has become less affordable.
But that conclusion could be wrong. To gauge affordability, we must think beyond the sticker price by properly measuring the cost students actually pay and compare that to the benefits of a college education. In economic terms, a college education is more affordable the larger are its benefits relative to its cost

Summers, Jeff

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Linfield Magazine Volume 15 Number 1 Fall 2018 Article 6 Fall 2018 Thinking beyond the Sticker Price Jeff Summers Linfield College Follow this and additional works at: https://digitalcommons.linfield.edu/linfield_magazine Recommended Citation Summers, Jeff (2018) "Thinking beyond the Sticker Price," Linfield Magazine: Vol. 15 : No. 1 , Article 6. Available at: https://digitalcommons.linfield.edu/linfield_magazine/vol15/iss1/6 This article is brought to you for free via open access, courtesy of DigitalCommons@Linfield. For more information, please contact digitalcommons@linfield.edu. Maximizing non-loan optionsCollege can be expensive, but schools are ready to work with families. Students who are motivated to look for addition-al non-loan aid sources before and during school may further reduce the amount paid out of pocket. Some reputable options:• Sallie Mae  salliemae.com/college-planning/tools/scholarship-search/• BigFuture bigfuture.collegeboard.org/scholarship-search• Peterson’s petersons.com/college-search/scholarship-search• FinAid finaid.org/scholarships/ Not all aid is federally funded. According to the National Association of Student Financial Aid Administrators, nearly every state education department has at least one grant or scholarship as well as student aid programs. The NASFAA maintains an interactive map at nasfaa.org/State_Finan-cial_Aid_Programs. Some potential funding sources are local – and not all are immediately apparent. Does your teen volunteer for an organiza-tion? Perhaps that group offers scholarships or grants. Maybe a parent belongs to a service club or works at a company that gives out college money. (Fun fact: Tupperware scholarships are available.) According to Ken Redd of NACUBO, roughly $150 billion in financial aid – much of it in grant form – is available. “It pays to ask,” he says, “and it pays to be persistent.”it would have been to remain in that situation. Although her parents encouraged her to get an education, the notion was hazy at best.“You don’t know what that looks like,” Cruz says. “You’ve never been around people who have gone to college. You’re limited (as) to the type of dreams you’re allowed to have.”Education gave her a new understanding of the world. In graduate school, her focus was removing barriers for marginalized students; now she volunteers for efforts such as college readiness programs and scholarship selec-tion committees.“Linfield changed my life. It really lit that fire in me, advocating for social justice,” Cruz says. “What I learned here gave me the foundation for what I do now.” – Donna FreedmanDonna Freedman is a personal finance columnist and writer in Anchorage, Alaska.Fa l l  2018    |    L i n f i e l d  Magaz ine  -  12 Fa l l  2018    |    L i n f i e l d  Magaz ine  -  13Over the last 20 years, the average published sticker price for tuition and fees, and room and board at private, non-profit colleges like Linfield increased by 59 percent while U.S. per capita personal disposable income grew by 32 percent. Since the tuition sticker price rose by more than income, you might conclude that a private college education has become less affordable. But that conclusion could be wrong. To gauge affordability, we must think beyond the sticker price by properly measuring the cost students actually pay and compare that to the benefits of a college education. In economic terms, a college education is more affordable the larger are its benefits relative to its cost.Thanks to financial aid, a majority of students at private colleges pay less than the sticker price. Let’s call the amount they do pay the average attendance cost. It is calculated as the sticker price minus the financial aid grants and tax benefits families receive to help them pay for college. Over the last  two decades, the average attendance cost at private colleges  rose by 29 percent. This increase in average attendance cost  is a bit less than the 32 percent increase in income over that period, suggesting that a private college education may be  more affordable today than it was 20 years ago. Remember though, to reach this conclusion we must compare the average attendance cost to the education’s benefits.  A college education’s benefits can be measured in both fi-nancial and non-financial terms. Financial benefits are usually measured as the difference between incomes earned by college graduates and those who do not have college degrees. Studies  of this difference consistently show that on average college  graduates earn much more over their lifetimes than people without college degrees. This suggests that the financial bene-fits of a college education are quite valuable. Non-financial benefits of a college education accrue as stu-dents develop the critical thinking skills necessary to evaluate complex arguments and defend their thoughts.  These benefits are hard to measure. But there are distinc-tive, and noticeably expensive, characteristics of private colleges that help to produce them. They can include a residential com-munity that fosters peer learning, productive student-faculty interaction, a curriculum centered on the liberal arts that offers a selection of majors focused on pre-professional preparation, and an active co-curricular environment that includes things like service learning activities, clubs and athletics.Are private colleges affordable? Based on a comparison of the average attendance cost and the financial benefits, the answer to that question is likely to be yes. This conclusion is strengthened if students and parents also value a private edu-cation’s non-financial benefits. There are, however, at least two reasons to be concerned about private colleges’ affordability. First, even though increas-es in the average attendance cost did not outpace the growth of income over the last two decades, the realized income gains have been unequally distributed. Some households have seen income rise faster than the average, but many have seen it rise by much less. This means that for an increasing number of households, a private college education has probably become less affordable. Combine this with decreases in the number of high school graduates and government policies that often discriminate against private higher education, and the result is that many private colleges are under great pressure to reduce their average attendance cost.A second reason for concern about affordability is that purchasing a college education is increasingly viewed in vocational terms as a market transaction necessary only for gainful employment. As a result, the distinctive characteristics of private colleges that are so necessary to generate many of its non-financial benefits are often seen as frills. This view can make a private college education seem less affordable even at a lower average attendance cost.The challenge for most private colleges, including Linfield, is to remain affordable by controlling the average attendance cost and finding innovative ways to provide financial and non-financial benefits that students value.– Jeff SummersJeff Summers is a professor of economics and chair of the Department of Economics at Linfield College. His research focuses on the economics of higher education.FACULTY ESSAYThinking beyond the sticker priceNotes on the data: Data for the sticker price and the average attendance cost referenced in this article are measured in constant dollars and drawn from The College Board, Trend in College Prices: 2017. Data for U.S. per capita income is also measured in constant dollars and drawn from Federal Reserve Economic Data (FRED) at fred.stlouisfed.org.Jeff SummersIn an interview on the “Power of Liberal Arts” YouTube channel, Jeffery Boyd of Priceline says his liberal arts background was a big part of his success: “(You) havea broad understanding not just of how businesses workbut how people work.”In addition, as technology changes the face of work,training for a clearly defined occupation isn’t always a sure thing. According to the U.S. Bureau of Labor Statistics, the average worker will hold at least 11 jobs during their career.“If you get very specific education for a job, what are you going to do if that job doesn’t exist anymore?” says Baum. “Having an education that allows you to learn successfully and independently over your lifetime, and that allows you to be flexible, to solve problems – that’s going to allow you to get good jobs along the way, as opposed to having very narrow training for one occupation.”Gerritz co-founded a construction company nine years after graduating; today it’s a multi-million-dollar business. A big part of his success was Linfield’s emphasis on critical thinking and community participation. “You (felt) like you had a living impact on the com-munity,” says Gerritz. In his case that meant Greek life, the college baseball team and student government (he was student body president).That’s why he counsels young people about the value of a wide-ranging education: “It is the most important investment you’re ever going to make.”More than a vocationNot that it’s only about money. Gerritz suggests that high school seniors ask themselves, “Where am I going to have the very best opportunities to apply myself, explore the world and have that love of learning?”Personal growth and community involvement are a big part of liberal arts programs. An ongoing project from NACUBO called “The Value of Higher Education” showsthat people with degrees are healthier overall and have longer lifespans. They’re more likely to vote, to volunteer and to donate to charity. “There are lots of these other public benefits to col-lege, beyond just people getting higher degrees,” says Redd.Before college, Cruz had never seen a Latina in a professional occupation. Throughout high school she worked retail and fast food jobs, helping support the family when one parent was laid off. Now she realizes how easy 

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