Here is a personal finance pop quiz with an extremely high pass rate.
In which industry do so many customers only know the price after they have applied for the purchase privilege?
The answer, of course, is higher education. This business of selling and buying undergraduate education is a tricky business, and college buyers are increasingly looking for more price predictability and granular data to evaluate the deals students are receiving.
If they cannot find satisfactory decision-making aids, parents create their own solutions. They draw from data in shaky government databases and obscure, jargon-laden school disclosures, and organize the information into spreadsheets or tools they make available online.
Data may not predict the exact price of attending a particular college, and a single number isn’t usually going to make that big of a decision. But it can encourage a recalibration of the buying process and a fair amount of skepticism.
“Ideally, data prompts people to ask the right questions,” said Leigh Moore, a former dentist and math teacher, mother of three, and founder of Moore College Data.
Here are four resources worth checking out if you’re yet to make a decision — or prepare to do so in the years to come.
PRICE: $50 to $125.
PAIN POINT: Any list of colleges someone applies to is, in part, the answer to two questions: Can I get in and can I afford it?
When George Fan, a tech industry veteran, and his family first approached the process, they knew what they didn’t know. And his data-driven brain couldn’t resist creating spreadsheets to keep track of the knowledge he’d accumulated.
The eventual result was College Kickstart, now a small business that Mr. Fan describes as a passion project run amok.
Perhaps the cleverest feature is the letter grade it assigns to the list of schools you’re considering. Using data on recent admissions and your own grades and test scores, it gently assigns labels like “reach” or “probable” to schools. Most students — and parents who had an easier time going back to college when it was less competitive — overestimate their chances. College Kickstart encourages them to adjust their mix if there are too many long-shot colleges on the original list.
Then, Mr. Fan serves data and comments on both need-based assistance and so-called benefit assistance, which is a discount off list price that even the wealthy can get. This discourages parents from delving into the topic to pull data from many websites.
“Half the battle is just trying to figure out what data is useful, rather than feeling like you have to dig through everything,” he said. “And that’s why you see a cottage industry of frustrated parents who feel pain when they take action.”
THERE SHOULD BE A LAW: Most data collectors have a wish list of things that colleges would need to disclose if they were in charge. Mr. Fan wants all colleges to publish their latest so-called Common Data Set – a rich collection of information on prices and other things – every December.
“I know they will never share the acceptance rate for an Asian male in California applying for STEM,” he said. “But all families are just looking for some transparency in the process. “Am I competitive? Can I afford it?’ It would be a real help.”
PAIN POINT: Ms. Vallab’s household income is high enough that her children would not be entitled to need-based assistance. But the revenue is also not high enough to comfortably pay full price for everyone, especially at private colleges.
“Colleges tell you, ‘Don’t worry, most people don’t pay the sticker price,'” she said. “But nobody tells you what price they actually pay.”
All universities are obliged to offer so-called net price calculators on their websites. If they are accurate—sometimes they aren’t when colleges don’t use good ones or don’t maintain them well—they can give families a rough idea of how much needs-based help they could get. However, schools don’t have to estimate how much earnings support you could get.
So Ms. Vallab developed a tool for that. It starts with various averages that colleges post on a little-known government website, and then uses an algorithm to evaluate a list of potential schools — and suggest others that may offer more discounts.
THERE SHOULD BE A LAW: One problem with net price calculators is that you have to fill them out individually, often with the same data. Ms Vallab believes there should be a single universal one that spits out estimates for every school.
Moore College Data prepared by Leigh N. Moore, mother of three in Prospect, Ky.
PAIN POINT: Ms. Moore has worked as a dentist and math teacher and has done some college counseling over the years. However, families’ need for the right dates at the right time became apparent when one of their children was at their elementary school orientation before classes began.
Ms. Moore was aware of a number that showed a low four-year male graduation rate at his college. A fifth year would mean mountains of debt. So he went to the registry office and looked for an ironclad plan to graduate on time.
“He came out white as a ghost,” Ms. Moore said. “They told him they didn’t think he was going to come out in four years.”
The couple eventually pulled the plug, with another school still willing to offer him the same discount he had declined a few months earlier. Thus was born a company that tried to pull together things as disparate as graduation rates and campus crime statistics — and pass them along to families.
“Good data should lead to good conversations,” she said.
THERE SHOULD BE A LAW: Ms. Moore wants the so-called grant letters, which purport to explain an accepted student’s financial aid package, to include a net price, or the bottom line, that families are responsible for after deducting grants from the list price but before deciding to go for it no loans out. Believe it or not, many colleges don’t clearly present this number—or not at all.
PAIN POINT: “People have different approaches to dealing with anxiety,” Dr. O’Meara via email. “Mine is to collect lots and lots of data.”
As a professor in the Department of Ecology and Evolutionary Biology at the University of Tennessee, he’s used to making sense of mountains of data, and the numbers he’s collected about the college are extensive, including lots of data on prices and grants.
They are also a window to the needs of his own family. His kids are more interested in whether they live in a desert or a forest than whether sports teams are good, so he adds information about the weather and biome. His daughter likes to see mountains around her, so he wonders how mountains might show up in data he adds to his collection in the future.
Health and social issues are also on his agenda, such as the availability of abortion and the risk of anti-transgender legislation.
THERE SHOULD BE A LAW: dr O’Meara would like more information about misconduct of all kinds in schools.
He also wishes for a better understanding of student and alumni satisfaction. Average debts and salaries are not enough for him.
“Someone could live a joyful, fulfilling life and make a difference as a social worker or an artist if they are paid decently, even if they still make far less money than an investment banker,” he said. “If all goes well, college should lead someone into the life they want.”