College Costs: Students Can’t Afford Not to Know

This paper offers a more useful, individualized, and feasible approach to understanding college affordability. First, it conceptually differentiates affordability from economic value. In so doing, it helps reconcile why Americans, when polled, agree with economists that higher education is worthwhile and has positive economic value, while at the same time fearing that lack of affordability will jeopardize college access and success. Second, it argues that information on average costs and outcomes, such as that available in the Education Department’s College Scorecard, while a step in the right direction, is not sufficient for students to make informed choices. The large variances in costs and outcomes may not be understood by many students, particularly those from families with little college experience, and this may lead them astray. Third, and most important, it advocates a three-pronged strategy for providing students — well before the college application decision occurs — customized information on net costs, debt repayment, and earnings outcomes. This strategy draws upon lessons learned from behavioral economics and recent research and can be implemented (on an interim basis) with existing data. Contact Information: Hershbein is an economist and Hollenbeck is vice president and a senior economist at th