How the Government Exaggerates the Cost of College – NYTimes.com.
Good points with a good graph. For why colleges do this, look here.
For how colleges manipulate the “rack rate” to show how much “more” financial aid they give, see this post .
(I just updated this post to add the comment I made. Sorry about the difficult-to-understand writing; I’m on vacation.)
Thinking that they are businesses, colleges use this pricing scheme just like any other business does – to make a profit from customers who won’t pay full price while still getting full price from other customers.
But colleges aren’t supposed to be businesses. Yet, while they think they are, and they think they can fool us into thinking they aren’t. So they call “discounts”, “financial aid”. They imply their school is great because it costs so much. They convince a student and his/her parents that he/she is special because they got a big “scholarship”, though they really just didn’t charge the full “rack rate”.
The worst case of using the “posted rate” to mislead was when one school claimed that they were contributing to President Obama’s desire to see more financial aid for needy students by nearly doubling their average financial aid over 10 years. The misleading part is that, after taking account of the increase in the advertised tuition, the net price for students went UP, not DOWN. Never mind that an average over all students doesn’t say anything about aid for needy students. (This story, with a link to the school’s article, is on my blog inside-higher-ed . Look for “Washington U. in St. Louis Touts Their Reduction in Net Financial Aid”. )
It’s not just the government’s data that mislead
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